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Last Updated: Wednesday, 16 March, 2005, 09:09 GMT
China bank boss in surprise exit
Chinese bank note
Chinese banks are trying to clean up their image
The head of one of China's largest banks has quit unexpectedly.

China Construction Bank, the country's top housing lender, said chairman Zhang Enzhao had resigned for "personal reasons" but did not elaborate.

The bank is expecting to list its shares in Hong Kong later this year, in a flotation which could raise up to US$10bn (5.2bn).

It did not give reasons for Zhang's exit, but Hong Kong media said a probe had begun into corruption allegations.

Improving image

The South China Morning Post newspaper reported on Wednesday that the bank was investigating the disappearance of money from a branch in the northeastern Jilin province.

Separately, Reuters quoted sources close to the situation as saying that Zhang had resigned following allegations of kickbacks relating to the procurement of computer equipment.

Chinese banks are seeking to clean up their image as they try to raise capital by listing their shares overseas.

In a statement, China Construction Bank said that it would "move forward with improvement of its governing structure and accelerate reform of its management mechanisms".

Chinese banks have been dogged by persistent corruption scandals in recent years, leading the Chinese government to identify banking reform as a key priority.

Wang Xuebing, former president of China Construction Bank, was jailed for 12 years for corruption in 2003 for offences committed while he ran the Bank of China.

In January, a branch manager at China Construction Bank was jailed for life for embezzling 111m yuan ($13.4m; 7m).

Listing plan

Zhang's exit comes at a difficult time for the company, with its Hong Kong listing due later this year.

China Construction Bank and Bank of China - also looking to list overseas - shared a $45bn state bailout in 2003 to improve their balance sheets ahead of a potential stock market flotation.

Chinese regulators called for all big loans to be scrutinised last year to reduce irresponsible lending which has seen banks' bad debts swell to at least $190bn.

However, efforts to bolster internal controls revealed a series of scandals involving embezzlement and loans-for-favours.

China Construction Bank was incorporated in 1954 and has more than 25,000 branches in mainland China.

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