Minsheng Bank hit by $436mn WMP fraud

Wealthy individuals who invested their savings with China Minsheng Bank have found themselves embroiled in an alleged 3 billion yuan ($436 million) fraud. Minsheng Bank confirmed in a stock-exchange filing on Wednesday that the head of its Hangtianqiao sub-branch in Beijing, Zhang Ying, has been placed under investigation by police for suspected violation of the law. It did not specify the allegations against Zhang. Sources close to the bank and the investigators told Caixin that Zhang was their main person of interest in the sale of a wealth management product to high-net-worth customers that raised about 3 billion yuan. The money was used by the bank to cover up a fraud involving bills of exchange, which are financial instruments similar to checks and promissory notes. The scandal is the latest involving high-yielding wealth management products, and underscores the government’s push for regulation.