China's Industrial Bank cooperates with authorities on probe into illegal fund-raising

[SHANGHAI] China's Industrial Bank Co Ltd is cooperating with authorities on a probe into speculation that a former bank employee absconded with 3 billion yuan (S$654 million) illegally raised from bank clients, the official Xinhua news agency said.

Su Yu, a former corporate finance account manager at a branch in Beihai in southwest China, is under investigation for illegally raising funds from bank customers, Industrial Bank said in a statement posted on the Shanghai Stock Exchange on Tuesday.

Su deceived more than 2,000 of the bank's customers into thinking that their money would generate high interest rate returns from a lending scheme, according to Xinhua. "Although no lending contracts were signed between Mr. Su and customers who he raised funds from... We deeply sympathise with the victims," said a spokesperson from the bank, according to Xinhua.

Industrial Bank's capital is not affected, the bank said in its statement.

Su Yu joined the bank in July 2010 and voluntarily resigned on March 27 this year, according to the bank's statement.

REUTERS