In Depth: Bank of China Executive Probed in Expanding Zhejiang Banking Crackdown

Cheng Jun, the head of the Zhejiang provincial branch of Bank of China Ltd., is under investigation, signifying another chapter in China's ongoing anti-corruption campaign targeting senior executives in major state-owned banks in Zhejiang province. Cheng, who previously led the bank’s operations in Singapore and South Africa, was both the Communist Party chief and president of the branch. He is the fifth current or former head of a major state bank in Zhejiang to face scrutiny in the past 18 months. His last public appearance was on December 23, after which he became unreachable, according to sources familiar with the matter. Shortly after, Bank of China replaced him with Wang Hanbing, general manager of its internal control and compliance department. Cheng has not responded to media inquiries as of the report’s publication.[para. 1][para. 2][para. 3][para. 4][para. 7][para. 8]

The investigation into Cheng began roughly a year after his return to China from a seven-year overseas assignment. Sources suggest the probe may be related to problematic legacy loans linked to Goldin Properties Holdings Ltd., a financially troubled conglomerate founded by Hong Kong businessman Pan Sutong. Goldin, formerly known as Matsunichi Communication Holdings, has been a focal point in several ongoing banking probes, highlighting deep-rooted systemic issues.[para. 5][para. 6][para. 10]

Cheng Jun had built a promising career at Bank of China, holding a master’s degree in finance from the University of Manchester and initially working in international settlements and trade finance. Recognition of his talent and professionalism led to his appointment as general manager of the bank's trade finance department at headquarters. However, industry sources say his career trajectory changed after he became embroiled in a non-performing loan case tied to Matsunichi. This lead to his overseas postings, first to head the Johannesburg branch in 2017 and later the Singapore branch in 2019. Described by colleagues as humble and competent, Cheng's career setbacks were notable, despite a seemingly strong endorsement when he was assigned to Zhejiang in July 2024. It is also noted that his relocation back to China aligned with new restrictions introduced that year, limiting overseas postings for Chinese bank executives to six years.[para. 9][para. 11][para. 12][para. 13][para. 14]

Systemic anti-corruption scrutiny in Zhejiang’s banking sector has become increasingly evident. Cheng is the fifth top executive at one of China’s “Big Four” state-owned banks in Zhejiang to be investigated since mid-2022. His predecessor, Guo Xingang, was investigated in April for misdeeds ranging from unauthorized equity holdings to manipulating procurement processes for personal gain, resulting in expulsion from the Communist Party. Other recent investigations in Zhejiang include Gao Qiang of China Construction Bank, Feng Jianlong of Agricultural Bank of China, and Shen Rongqin of Industrial and Commercial Bank of China, all occurring between April and May 2024.[para. 15][para. 16][para. 17]

The possible link behind these investigations, including Cheng’s, is believed to be the spectacular collapse of Pan Sutong’s Goldin Properties. Goldin, which had transitioned from consumer electronics to real estate, was heavily dependent on financing from Bank of China. Its flagship New Tianjin Goldin Metropolitan project, costing $10 billion and featuring the Goldin Finance 117 skyscraper, was abandoned midway in 2015, with multiple bailout attempts failing. By 2020, Pan’s conglomerate faced insurmountable debt, and Pan himself seemingly fled abroad. Goldin’s stock was suspended in April 2022, its value reduced to less than 1% of its peak. The financial collapse has implicated not only Cheng but also other top banking officials, including a former Bank of China vice president and a former chairman of ICBC (Macao).[para. 18][para. 19][para. 20][para. 21][para. 22][para. 23]