Top Chinese Banks, Executives Under Investigation For ‘Huge International Scandal’

Posted by ETFalpha ⋅ November 21, 2014 ⋅ Leave a comment

Filed Under $FXI, $GXC, Banks, China, Financials, NVC Lighting, Scandal, Wu Changjiang

Wu Changjiang China Banks Wu Changjiang, the former CEO of NVC Lighting, and employees of four major Chinese banks are being investigated by police for their alleged involvement in a $100 million fraud. NVC Lighting, China’s biggest lighting company, said that Wu and the bankers are suspected of helping to illegally divert company funds.

According to NVC, Wu likely obtained false loan guarantees worth 623 million yuan ($101.71 million) without the knowledge of the company’s current board, and the transactions were likely arranged by employees at four leading Chinese banks, including the Bank of China, China Minsheng Banking, China Construction Bank and Industrial and Commercial Bank of China, Reuters reported, citing NVC executives. Trading in the company’s stock in Hong Kong has been suspended since Aug. 11, according to Reuters.

“This is a huge international scandal,” Wang Donglei, the current CEO of NVC, who took charge of the company after Wu’s departure in August, was quoted by Reuters as saying. “These banks misled the company and investors with false information.”