A Chinese court has jailed the former president of a soon-to-list bank for seven years for taking bribes, state media said over the weekend, the latest financial official to fall in a crackdown on corruption.
The Beijing court found Duan Xiaoxing, former head of state-run Huaxia Bank, had taken bribes worth $9,000 in return for illegally approving loans of 150 million yuan ($18 million), said the latest edition of Caijing Magazine.
Bank officials and underwriters played down any impact from the case on Huaxia's plan for an initial pubic offering (IPO) of around $600 million in new shares and a share market listing.
"Everything has been going smoothly," said an official with China Southern Securities, the bank's sole underwriter for the planned listing on the Chinese stock market.
A number of Chinese banks are planning IPOs, hoping to raise money to balance a mountain of bad assets resulting from years of lending to ailing state-owned enterprises.
Beijing-based Huaxia is much smaller than China's state banking giants and ranks seventh of 10 shareholding banks by assets. It made a profit of 705 million yuan in the first half of this year and had assets of 158.62 billion yuan ($19.2 billion).
Authorities also confiscated personal assests worth 80,000 yuan from Duan, said the magazine, which often reports on financial misdeeds by companies and officials. Officials confirmed there had been a verdict but declined to give details.
The verdict was handed down in May, but Duan, 62, had appealed and it was unclear if the case would be reopened, the magazine said. Duan was bank president from 1998 to 2001.
News of Duan's sentence comes as the same Beijing court deliberated on the case of Zhu Xiaohua, the former chairman of Everbright, China's sixth-largest commercial bank, on charges of taking bribes.
Another banker, Wang Xuebing, was sacked in January from his job as chief of the China Construction Bank over problem loans during his tenure as president of the Bank of China years earlier.
Bank officials said the case had not affected operations. "The case had no impact on our business," one official told Reuters. "Duan was arrested after he stepped down from the position of president."
Huaxia Bank has applied for regulatory permission to list stock on China's A share market, which is off-limits to foreign investors. It is expected to offer one billion shares at four to five yuan each, raising up to five billion yuan ($604 million), say officials familiar with the plans.
Huaxia Bank's main shareholders are three state-owned companies: steel firm Shougang Group with 20 per cent, Shandong Power Group Co with 16 per cent and tobacco firm Yunnan Hongta Group Co with 14 per cent.