China’s bill financing flaws exposed

摘要

CHINA Citic Bank Corp recentlyrnreported it uncovered a fraud atrnits bill-financing business involvingrnabout 1 billion yuan ($152 million)rnlate last year. The reports saidrnan employee at the Beijing-basedrnbank’s branch in Lanzhou cityrnhad allegedly conspired with otherrnpeople between May and July tornfake documents that were usedrnas collateral to obtain a bankers’rnacceptance. The acceptancernwas later sold on several times atrndiscounted prices, bringing totalrnexposure to 900 million yuan torn1 billion yuan. Its proceeds werernthen invested in stocks, and thernfraud was uncovered afterrnChinese equities slumped.