Jun 04, 2012 04:05 PM

ABC Executive Is Target of Three Inquiries

(Beijing) – Yang Kun, a vice president at Agricultural Bank of China, has been detained by the party's disciplinary department for investigation in three separate cases, Caixin learned from multiple sources.

One of the cases involves loan agreements ABC signed with a property developer, whose effective owner, Wang Yaohui, allegedly used bank loans to repay gambling debts worth several billions of yuan.

The other two cases are connected with probes into Dalian Shide Group and a sacked former deputy minister of the People's Liberation Army's logistics department, sources said.

Yang is the highest-ranking bank executive to be investigated since 2006, after China Construction Bank's former president, Zhang Enzhao, was sentenced to 15 years in jail for corruption.

Yang has been in the custody of the Communist Party's corruption watchdog, the Central Commission for Discipline Inspection, since late May, a source close to the situation said.

One member of ABC's board of directors said there was no evidence yet that the bank itself had done anything wrong.

ABC lent roughly 3 billion yuan to Beijing-based property firm Blue Harbor Properties Co. Ltd. while Yang was vice president. The money was used to develop Solana, a shopping center in a large park near Beijing's central business district.

But doubts over the whereabouts of the money were raised in April. Some ABC executives reportedly wanted to call in the loan but Yang would not let them. The bank neither confirmed nor denied the report.

A source close to the property developer said Solana had lost money since opening in 2008. Some joint-stock commercial banks that were involved in the project's early development phases refused to renew their loan agreements with the firm over concerns the money would not be used as intended, the source said.

Several sources in Macao's financial sector said the ABC loan might have been misused. They said Wang owes Macao's casinos 3 billion yuan due to gambling debts. The firm has yet to respond to Caixin's inquiry over whether he had used the money to repay gambling debts.

Yang is close to former PLA lieutenant general Gu Junshan, sources close to Yang said. Gu was removed from his post this year, but the Ministry of National Defense did not explain why.

A source familiar with the situation said the army's logistics department controlled large financial resources and was always targeted by banks seeking deposits.

One person close to Yang said the central government's investigators have found that he had "an enormous amount of assets" that cannot be accounted for by his salary. Authorities have not confirmed this.

ABC's annual report showed that Yang received less than 1 million yuan last year, compensation that was normal for a senior executive at a major state-owned bank.

Separate sources said Yang was involved in Xu Ming's case. The central government is investigating the self-made billionaire in Dalian over briberies to senior officials, among other allegations.

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