The former head of China's third-biggest bank, Construction Bank, was jailed for 15 years yesterday after he pleaded guilty to taking bribes to arrange loans, the latest in a series of high-profile corruption cases that are trying to unpick the cosy network that links bankers, businessmen and government officials.
Beijing No 1 Intermediate Court found Zhang Enzhao guilty of accepting 4.15 million yuan (€415,000) in bribes in the form of cash, property and valuables to help people get loans from his bank, according to his lawyer, Gao Zicheng.
The news 16 months ago that Mr Zhang was going to resign as chairman of Construction Bank, ostensibly for personal reasons, caused a huge commotion in the Chinese banking sector.
In 2003, another former Construction Bank president, Wang Xuebing, was jailed for 12 years for taking bribes while working as the New York City branch manager of another major Chinese bank, Bank of China.
Construction Bank was one of the rising stars of the banking sector, the first of China's big four banks to go public. It raised €7.2 billion when it listed in Hong Kong in October last year.
Mr Zhang had pleaded guilty, but insisted he had accepted only €150,000 in bribes. His lawyer is considering whether or not to appeal.
"The court believed that the attitude of his confessing was good, so he was leniently punished. I believe the punishment is heavier than it should be," said his lawyer.
However, the state news agency Xinhua said the court considered the sentence "lenient" and said Mr Zhang's full confession and the fact that he handed over the bribe money to the state had spared him an even tougher sentence.
Mr Zhang is also accused in a separate case in California of taking a $1 million (€790,000) bribe in exchange for arranging for a US-based company to obtain contracts from his bank.
China has pledged to reform its banking system and the last few years have seen dramatic changes in the way things are done, but bad loans and poor management remain major problems.
In October, China's top banking regulator said the financial sector had been hit by 724 cases of bank fraud in the first nine months of the year, of which 194 involved at least €100,000.
These cases usually involve managers accused of embezzlement or arranging fraudulent loans, but the scandals come at a sensitive time when Chinese banks are trying to raise money from foreign investors to modernise operations, as Beijing prepares to meet a December deadline to open their market to foreign rivals under World Trade Organisation rules.
Many of the fraud and embezzlement cases have come to light because the banks must have comprehensive audits before they can list on Hong Kong's stock exchange or other markets.
Mr Zhang will serve time at Qincheng prison, which is best known as a jail for political prisoners - it is the prison where the "Gang of Four", led by Mao Zedong's wife, Jiang Qing, were held after they were convicted for their roles in the Cultural Revolution.
Two credit officers from a branch of Construction Bank on the southern island of Hainan were also sentenced to one year's imprisonment for dereliction of duty, Xinhua reported.
As well as Construction Bank, the Industrial and Commercial Bank of China and the Bank of China have already listed on domestic or overseas bourses, while the Agricultural Bank of China, the last of the "big four" banks still to list on the stock market, is next up.
