ABC warns it may lose $593m after notes resale incident in Beijing

Source:Reuters Published: 2016-1-24 19:48:29

Agricultural Bank of China (ABC) has discovered that 3.9 billion yuan ($592.87 million) is exposed to risk after an incident in the notes resale business, it said on Friday.

ABC, China's third-largest lender, is working with authorities to investigate the incident, which took place in Beijing, it said in a brief statement to the Hong Kong stock exchange. It did not provide further details.

On Friday, Chinese financial publication Caixin reported that ABC may lose 3.9 billion yuan from a bills of exchange scam allegedly carried out by two employees.

The report, quoting unidentified sources, said the employees had illegally sold the bills of exchange to an unidentified third party and used the proceeds to invest in the stock market, which has slumped since the middle of 2015.

The report said the employees, who worked at a Beijing branch, are under investigation, but it did not specify by whom. It said the Ministry of Public Security and the China Banking Regulatory Commission had also reported the case to the State Council, the country's cabinet.

China's banks have been dogged by accusations of corruption, with a recent crackdown on the financial industry netting senior executives for bribery, including the former vice president of ABC Yang Kun, who was sentenced to life imprisonment last year.

Reuters

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