BEIJING- China's banking watchdog has penalized 49 staff members of 11
banking institutions who were responsible for funding an unauthorized power
plant that has been criticized by the central government.
Nine banks and
two financing firms for power companies were responsible for slack examination
procedures before approving the credit and for poor management of the loans to
the north China-based Inner Mongolia Power Group Co., Ltd., which constructed
the plant and other six illegal power projects, said the China Banking
Regulatory Commission.
The disgraced
institutions include the country's "big four" state-owned lenders -- the China
Construction Bank, the Bank of China, the Agricultural Bank of China and the
Industrial and Commercial Bank of China.The commission did not reveal the
specific penalties.
The project, the Xinfeng thermal power plant, came under fire in August last
year, when it was openly criticized by the State Council, China's cabinet.
Six people died and eight were injured in the construction of plant, and the
power company had failed to follow standard procedures in project approval, land
acquisition and tendering, said the State Council.
Regional authorities
received disciplinary and judicial penalties for failing to stop the project and
enforce the central government's macro-control policies aimed at curbing
investment to prevent the economy from overheating. The commission, together
with the National Development and Reform Commission and the National Audit
Office, reinvestigated the legitimacy and management of all bank loans to the
power company from September 18 to 27.
The country's banking institutions must learn from the case and resolutely
implement central macro-control policies, said the commission. It urged all
financial institutions to strengthen risk management of large corporate
customers and strictly examine the legitimacy of their credit.