Bank of East Asia downplays boss’ arrest

The reported incarceration of one of its executives on Chinese territory due to bribery charges has received little attention from Bank of East Asia, a Hong Kong-based lender already dealing with a spike in impairment losses related to the deteriorating real estate market.

According to a storey published on Tuesday by the financial news website Cailianshe, Beijing police detained Chen Zhiren, executive vice president and director of BEA China’s northern region, in July over bribery charges.

Chen is believed to have broken credit regulations and given loans in return for kickbacks. The report, which relied on unnamed sources, suggested that the inquiry might be expanded to include another branch of the bank, East Asia Qianhai Securities.

The alleged arrest occurs as Beijing ramps up its anti-corruption drive against banks and other financial institutions in an effort to stop graft associated with high-risk loans.

“According to the information available to the bank, this matter pertains solely to the personal actions of an individual employee,” BEA said in a statement to the Financial Times.

“BEA has stringent internal control mechanisms and protocols in place. This matter has no impact on BEA China’s lending business and does not involve East Asia Qianhai Securities.”

Along with HSBC and Standard Chartered, BEA, which has a significant presence in Hong Kong, was one of the first foreign lenders to establish a bank in China in 2007 when the country opened up its banking sector.