China Citic Bank Corp. revealed late Thursday that it had uncovered a “risk incident” concerning RMB969 million (US$147 million), and that police had opened a probe and frozen related assets and funds, Bloomberg reported, citing stock exchange and emailed statements. Sources familiar with the matter said that an employee at the bank’s Lanzhou branch allegedly conspired with other people from May to July to fake documents then used as collateral to obtain a bankers’ acceptance which was later sold several times at discounted prices. The proceeds were invested in stocks, and the fraud was only uncovered after Chinese equities slumped, according to one of the sources.
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