A former president of state-owned Bank of China’s Hong Kong branch received a suspended death sentence Friday for embezzlement in an apparent effort by Beijing to help restore faith in its scandal-plagued banks as they prepare to sell shares abroad.
Liu Jinbao was fired in May 2003 in a scandal that jolted efforts by Chinese leaders to present their banking industry to foreign investors as modern and well-regulated.
Despite a series of such scandals, China’s state banks are pressing ahead with plans for initial public offerings, and a Bank of China vice president said Friday that its IPO could come this year.
Liu was sentenced to death by a court in the northeastern city of Changchun but given a two-year reprieve, the official Xinhua News Agency reported. Such suspended death sentences usually are commuted to life in prison if the convict is deemed to have reformed.
Liu also was a deputy chairman of Beijing-based Bank of China, one of China’s four main state-owned commercial banks.
He was convicted of embezzling 14.3 million yuan ($1.8 million) with others, plus another 7.5 million yuan ($930,000) for himself, Xinhua said. It said Liu also was convicted of taking 1.4 million yuan ($170,000) in bribes.
The case was a warning about the need for “efficient supervision over high level executives in financial institutions,” said Bank of China spokesman Wang Zhaowen, quoted by Xinhua.
Communist leaders have punished thousands of officials and managers of state companies for graft in recent years in an effort to soothe public anger at widespread official abuses.
The government has uncovered a series of cases of fraud, embezzlement and other wrongdoing at state banks as they undergo audits in preparation for stock market listings.
On Friday, Bank of China’s executive vice president said its long-anticipated offering could take place as early as this year.
“Maybe at the end of this year or early next year. We haven’t decided yet. It depends on the market,” Zhang Yanling told reporters at a business conference in Kuala Lumpur, Malaysia.
A major Chinese financial magazine reported earlier that the bank was considering selling one quarter of its equity for some $6 billion to a group of foreign institutions.
Liu was dismissed after approving a loan to a prominent Shanghai property developer, Zhou Zhengyi, who has since been jailed for fraud and stock manipulation.
Three other executives of Bank of China’s Hong Kong branch were convicted with Liu, Xinhua said.
Vice presidents Zhu Chi and Ding Yansheng were sentenced to 13 years and fined 2 million yuan ($246,000), it said. The former general manager of Liu’s office, Zhang Debao, was sentenced to eight years and fined 1.5 million yuan ($185,000).