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| Researchers Play down 2004 Fraud at ABC |
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A number of finance research fellows said on Tuesday they believe the Agricultural Bank of China (ABC), at which auditors have found fraud cases totaling 8.7 billion yuan, will see improved business after its reform process is completed. "The report will not affect the Agricultural Bank's reform process," Professor Guo Tianyong with The Central University of Finance and Economics told Xinhua, referring to the result of an annual report released on Monday by the National Audit Office (NAO). He said the NAO audits financial institutions every year, and "this time it is targeting the Agricultural Bank. The report only reflects the situation in 2004, and will not have any influence on the current reforms." Zhu Yan, a banking analyst with Guoxin Securities, echoed his remarks. Citing an ABC business report released in May, Zhu said, "As a matter of fact, the current scenario is already better." The ABC has reported its non-performing loan ratio has decreased by 0.56 percent from last year by the end of 2005, and that its operation profits were 10.5 billion yuan more than 2004. Yi Xianrong, a well-known finance expert with the Chinese Academy of Social Sciences, a socio-economic think tank, said the ABC would "definitely improve" when its shareholding reforms are completed. Like other big state banks, the Agricultural Bank is also planning to transform itself into joint-stock companies and seeking market listings to help streamline operations. Under a WTO commitment, On Monday, the National Audit Office said at the Agricultural Bank, auditors found 51 cases of criminal wrongdoing involving 157 people during an investigation of the bank's financial statements The majority of fraudulent loans were for auto and real estate financing, the report said. It said some employees colluded with outsiders to defraud the bank. Guo said it is difficult for the wholly state-owned ABC, relying on the existing management skills, to rein in and remove all its non-performing loans, making its shareholding reforms essential. (Xinhua News Agency June 28, 2006)
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