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| Lui Jinbao: sudden recall |
Suspicions that another Chinese banking scandal was about to break first emerged on May 29 when Liu Jinbao, head of the Bank of China (Hong Kong), was suddenly recalled to Beijing by his bosses. The Bank of China at first insisted that it was just a routine relocation.
But it couldn't deny that the timing was bizarre. Liu was asked to leave his office one day before the bank's first annual shareholder meeting since being listed last July. It wasn't until two weeks later, on June 11, that it was officially announced that Liu had been arrested and was under investigation for illegal loans to a Shanghai real-estate tycoon made during Liu's time in charge of the area during the 1990s. The money, it is believed, was used to speculate on the Chinese stock market.
In response to the newly discovered problems, the Hong Kong Monetary Authority is believed to be interested in taking a closer look inside the Hong Kong arm of the bank.
Corrupt banks Just after this announcement, as politicians, bureaucrats and analysts regained their composure, Li Jinhua, head of China's national audit office, appeared before the standing committee of the National People's Congress in the last week of June and declared that another two banks were guilty of illegal behaviour.