China’s largest suspected bank fraud is being revealed after the former chairman of an AIM-listed company appeared in a Chinese court last week.
Prosecutors in Guangzhou allege that Wang Sheng, former chairman of Canton Properties, a prominent developer in southern China, obtained about Rmb4.8bn (£413m) of illegal loans from Bank of Communications, a state-controlled lender 18.6%-owned by HSBC, the bank.
Wang, also known as Keng Wong, was the main recipient of the illegal loans, which were arranged with the help of a senior BoComm executive and never made available to the company, prosecutors allege.
Liu Changming, the former president of BoComm’s Guangzhou headquarters, fled the country soon after authorities launched an investigation in late 2007, according to state officials and people familiar with the case.
He is still on the run in spite of a global alert issued through Interpol to apprehend him.