Shanghai Pudong Development Bank’s Chengdu branch has been given a 462 million yuan (US$72 million) penalty by the state banking regulator, following revelations of a large-scale shell company fraud, the SCMP reports.
The branch had previously claimed to hold “zero” non-performing loans, but was found to have falsified loan applications and granted other unapproved funds to hide its poor credit situation, according to the China Banking Regulatory Commission. It was discovered that 77.5 billion yuan had been lent to almost 1,500 “empty shell” companies, which may lead to up to 10 billion yuan in losses (Caixin).
The CBRC said in a press statement on Friday that the branch’s former president and two vice-presidents received a life ban from the banking sector, with an additional 195 staff members reprimanded for the fraudulent activity.
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