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December 12, 2017

Chinese banking regulator fines Guangfa Bank $109m for fraud

The China Banking Regulatory Commission (CBRC) has fined Guangfa Bank RMB722m ($109m) for issuing forged guarantee, concealing bad assets and operating with lax internal controls.

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Besides imposing the monetary penalty, the Chinese financial watchdog has seized illegal income stashed by the Chinese lender.

During its probe, the CBRC found that Guangfa Bank fabricated guarantee documents on RMB1bn ($151.1m) worth of bonds that went into default.

The bonds were issued by two units of the phone manufacturer Cosun Group, and sold on Ant Financial’s online wealth management platform, which is affiliated with e-commerce giant Alibaba Group.

When the bond defaulted in December 2016, Ant Financial and 10 other banks demanded compensation for investors from Zheshang Property and Casualty Insurance, which had provided insurance coverage on the debt.

They then discovered that the insurer had been issued fabricated letters of guarantee by employees at Guangfa Bank’s branch in Huizhou.

Free Report
img

Prepare for changes in the Payments market

 The Payments market has seen drastic changes in the past few years, with this only expected to continue. What does your company need to do to prepare for what’s to come? GlobalData’s Payment Trends for 2022 report explores the key trends in technology, consumer habits, and regulations shaping the market. We also identify the leading companies in this changing market, giving you a competitive market outlook. This report covers the impact of:
  • ESG
  • E-commerce
  • Mobile payments
  • Alternative payment rails (Real-Time Payments, Blockchain, BNPL)
  • Fraud & Cybersecurity
  • Regulations
Download the report now to learn essential strategies to maximize your growth in the face of rapid change.
by GlobalData
Enter your details here to receive your free Report.

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