Bank of China Chief Xiao Gang in Shanghai announced July 2 that Zhou Lu, general manager of the Bank of China (BOC) Shanghai branch, was replaced by Huang Zhiwei. The bank's Deputy-Chief Wang Zheng was also relieved from his duties.

The Bank of China, the country's second-biggest lender, made the decision after an audit review revealed Zhou was involved in issuing irregular loans to Wan Tai, a local property firm.

Wan Tai, the Shanghai-based real-estate developer currently under investigation, doubled its assets between 1995 and 2001 by borrowing money and setting up affiliates in trading, metals, advertising and education, and reporting no income for six consecutive years, the China Securities Journal reported earlier. Qian Yongwei, the owner of Wan Tai, is being questioned about the more than 1.3 billion yuan (US$157 million) in loans the company withdrew from the BOC's Shanghai branch.

"During an audit review of the Shanghai branch, the head office discovered that certain credit extensions made to the Wan Tai Group, granted during Zhou's tenure, involved irregularities, and Zhou should be held directly responsible," said a BOC statement July 2.

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