Guangzhou Rural Lender Scraps Listing Plan After Corruption Probes
What’s new: Guangzhou Rural Commercial Bank, a scandal-plagued mid-sized lender, withdrew its listing application for the Shenzhen stock market one day before a scheduled regulatory review, the bank said Tuesday.
The bank shelved the listing plan due to strategic adjustment and based on prudent studies, it said. The Guangzhou lender announced the plan in March to sell 1.6 billion shares, or 14% of its equity, to supplement core capital.
Guangzhou Rural Commercial Bank, which listed in 2017 in Hong Kong, said its business has remained sound and the suspension would not affect its operations. The bank said it would re-launch the share sale at proper time.
What’s the context: Guangzhou Rural Commercial Bank has been rattled by a series of graft probes of the senior management team, following a corruption investigation of its former Chairman and President Wang Jikang.
Wang, who initiated the Shenzhen listing plan, was placed under corruption probe in August 2019, one month after he resigned from the bank. Wang was indicted in March this year on bribery charges along with three other senior bank executives.
In October, Li Fangjin, a former nonexecutive director of the bank, was also investigated.
Guangzhou Rural Commercial Bank recorded a loan impairment loss of 5 billion yuan ($765 million) in the first half this year, up 40% from a year ago, according to its financial report. The bank had 10.1 billion yuan of nonperforming loans as of the end of June, 62% more than the same time last year.
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