Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : True face of China -- A Modern Kaleidoscope -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (611)	11/15/2006 11:42:31 PM
From: RealMuLan	Read Replies (1) \| Respond to of 12464

CCB denies it hid bad loans Zhang Fengming 2006-11-16 shanghaidaily.com CHINA Construction Bank implied yesterday it is considering legal action against a New York Times report that it may have covered up US$3 billion in bad loans in advance of a stock market listing. Yesterday's Times' report, headlined "Rare Look at China's Burdened Banks," was "groundless," the Beijing-based bank said in a statement on its Website. "The bank reserves the right to take legal action against any action that harms the bank's reputation and hurts shareholder interests," the lender said. No timetable for a decision on a possible lawsuit has been developed, said CCB spokesman Hu Changmiao. The newspaper story reported that an unnamed former senior risk adviser was fired by CCB after he repeatedly told top executives that up to US$3 billion in bad loans might have been intentionally hidden from outside auditors just months before the bank's first initial public offering. CCB has strict standards for classifying loans, and KPMG issued an audit report supporting the bank's accounts in its IPO prospectus, the bank said in response to the Times' article. CCB raised US$9.2 billion in Hong Kong in October when it became the first of the big state banks to gain a listing. CCB shares closed at HK$4.13 (53 US cents) yesterday, up 6.44 percent, and have gained 70 percent since the IPO. Bad loans have been a sensitive issue in China's banking sector, especially as the world's fastest growing major economy is working to restructure its lenders and encourage them to be ready to compete with overseas rivals when China completely opens its financial industry to foreign firms by the end of December. Ernst & Young, one of the world's big-four accounting firms, had to withdraw a report claiming China suffered from US$911 billion in bad loans and admit the statement was erroneous after complaints from the People's Bank of China. Bad loans among the country's four big banks - the Bank of China, Industrial and Commercial Bank of China, CCB and Agricultural Bank of China - dropped to 1.1 trillion yuan at the end of September, down 16.4 billion yuan in the first nine months, according to official sources.