Shanghai Bank Employee Found Guilty of Corruption and Illegal Loan Issuance
A customer manager at a bank in Shanghai was found to have accepted bribes and unlawfully issued loans totaling one hundred million yuan (RMB). Subsequently, several of these loans defaulted, resulting in significant bad debt.
According to a report by The Paper news outlet on October 9th, the Baoshan District Prosecutor’s Office in Shanghai dealt with a case involving illegal loan issuance and bribery of non-state employees. Ultimately, individuals involved, such as Li and Zhang, were sentenced for their actions.
Zhang, a university graduate, had joined a bank after graduation and had been working as a corporate customer manager since 2015. His responsibilities included handling loan services for clients in need, such as mortgage loans, secured loans, and loans for small and micro-enterprises.
In July 2019, Zhang met with loan intermediary Li and clients introduced by Li. Li proposed that he could bring clients in need of secured loans for small and micro-enterprises to Zhang. He suggested that Zhang relax the scrutiny of application materials in exchange for a kickback of 1% of each approved loan. Zhang agreed to the arrangement and began collaborating with Li.
Normally, after receiving loan application documents, Zhang would need to verify clients’ situations by visiting them in person and taking photos at their operating locations. However, Li would provide photos of clients at their workplaces along with the documents, indicating that Zhang recognized these clients as Li’s referrals without further verification.
Most of the clients introduced by Li were small and micro-enterprises with poor qualifications, small-scale production, making it difficult for them to obtain loans through proper channels at the bank. To facilitate loan approval, Li falsified balance sheets and fabricated purchase and sales contracts for these enterprises. Zhang would review and ensure the completeness of the application materials, guaranteeing they met the approval standards. With Zhang’s assistance, clients recommended by Li successfully received loans from the bank.
Statistics revealed that Zhang helped Li secure loans for 23 small and micro-enterprises, totaling one hundred million yuan. Zhang received kickbacks exceeding 300,000 RMB.
In January 2023, several of these loans totaling 21 million yuan defaulted, alerting Zhang, who then resigned. The bank promptly discovered Zhang’s misconduct of accepting kickbacks for illegal loan issuance and reported the case.
Both Zhang and Li were prosecuted.
Zhang was sentenced to five and a half years in prison for illegal loan issuance and accepting bribes as a non-state employee, while Li received a four-year sentence for loan fraud and bribing non-state employees.
The bank’s failure to detect Zhang’s wrongdoing in a timely manner reflects operational and managerial weaknesses, gaps in risk prevention, and inadequate monitoring of loan fund usage.