CCB Employee Denies Improper Sales of Wealth Management Product12-27 17:56 Caijing
An employee at China Construction Bank's branch denied accusations of misleading investors into buying a wealth management product that underperformed, AAStocks.com Limited reported, after seven investors reportedly complained to regulators after suffering losses.
The savers, from Baicheng city in northern Jilin Province, filed a complaint with the China Banking Regulatory Commission and the China Securities Commission, accusing the country's second-biggest lender of illegally selling wealth management products, the Guangzhou Daily said on Wednesday.
The clerk said since three years ago, the bank has committed to "full disclosure" of risks when selling wealth management products to investors and that this time was not an exception.
One of the investors, who intended to save up money at the bank branch, reportedly lost 300,000 yuan, or 37.5 percent of total investment in a year after she was enticed to buy a wealth management product. According to the report, the investor was told by a bank clerk that the product was "risk free" with guaranteed returns.
The report also cited her lawyer Mr. Zhang as saying that another CCB branch in Tianjin was also suspected of engaging in improper wealth management sales.
CCB said it is investigating the allegations and the result will be released, in a brief statement to media queries on Thursday.
The dispute is the latest evidence that China's murk wealth management products are looming large, posing risks to the country's banking industry. Chinese media outlets have been heavily covering similar stories earlier this month since a product sold to retail investors at a branch of Huaxia Bank in Shanghai failed to pay out.
Last week, a former employee of China CITIC Bank was reportedly fired and being investigated by police, after the person was accused of selling a wealth management product, which proved to be bogus.
Chinese regulators have already been alerted, Caijing learned. In a document issued in mid-December, the China Banking Regulatory Commission ordered Chinese lenders to "screen out sources of risks" in their distribution of third-party products, according to the Southern Metropolis Daily.
Yet none of the recent disclosures came from banks' "internal checks", and without investors' complaint and media exposure, risks in the area may remain under the carpet. Banks are required to submit results of their "internal checks" to regulators on January 7.
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