CHINA¡¯S banking watchdog has ordered the Bank of China (BOC) to step up its risk control and thoroughly investigate a fraud case, which the bank admitted involves funds worth hundreds of millions of yuan (tens of millions of US dollars).

The Chinese Banking Regulatory Commission (CBRC) said on its website that it was working in co-operation with police to probe the suspected embezzlement at the bank¡¯s Hesongjie sub-branch in Harbin, capital of Northeast China¡¯s Heilongjiang Province.

The director and other staff of the bank division reportedly have disappeared. According to reports in certain media, the sums involved might amount to as much as a billion yuan (US$120 million).

The CBRC said the case had resulted in grave losses and affected a couple of companies, including a local highway company, Northeast Expressway Co.

¡°The BOC must look into the incident thoroughly and as soon as possible and severely penalize those caught violating laws and regulations, without any mercy,?the CBRC said.

The banking watchdog ordered the BOC to review its entire operations so as to prevent similar problems arising.

BOC Spokesman Wang Zhaowen said the bank would release relevant information in a timely manner.

The BOC is one of China¡¯s Big Four State-owned commercial banks. Wang acknowledged that the Hesongjie sub-branch case was a ¡°local?one ?not involving the operation of other BOC divisions.

The case was revealed just after two other large banking scandles rocked China recently. Zhang Senmiao, the head of a sub-branch of the Construction Bank of China in South China¡¯s Guangdong Province, was sentenced on January 31 to six years imprisonment and fined 50,000 yuan (US$6,000) for making illegal loans which resulted in losses of over 17 million yuan (US$2 million) to the country.

In another case, Lin Junjiang, the former head of a Guangdong branch of the Industrial and Commercial Bank of China (ICBC), faced a fraud trial on charges of taking bribes worth 8 million yuan (US$963,000) from a businessman. Another 29 government and bank officials involved in the loan scandal were removed from their posts and will also face criminal charges. (Star-Xinhua)