SHANGHAI Dec 5 The husband of the employee
sacked by China's Hua Xia Bank Ltd for allegedly
selling wealth management products without authorisation said
his wife had been made a scapegoat to deflect the bank's
responsibility for the failed products, local media reported on
Hua Xia Bank said on Monday that an employee at the bank's
Jiading branch in a Shanghai suburb sold products issued by the
Zhongding Wealth Investment Center without permission, and a
police investigation was under way.
Hua Xia's statement followed media reports that the products
had stopped making payments to investors upon maturity.
In the last few years, sales of so-called wealth management
products have soared in China, as banks compete for deposits in
higher interest rate products than those offered on savings
Sales of the products grew to 12.14 trillion yuan ($1.95
trillion) in the first half of 2012, according to a July report
by consultancy CN Benefit. Hua Xia Bank was one of the five most
active issuers cited in the report.
On Wednesday, the news portal of Chinese firm Netease Inc
quoted the employee's husband as saying the bank should
bear responsibility. The man, identified only by his surname Xu,
has hired lawyers to defend his wife, who has been arrested and
is in police custody, the news portal reported.
"As a customer manager, Tingting (his wife) had no authority
to transfer money over the counter or examine product risks,"
the husband told Netease.
"The products had been on sale for half a year, and now the
bank is pushing the responsibility on her. Why is the bank
sacking her now, when the products failed, rather than six
Attempts to reach Xu were unsuccessful, and Hua Xia
officials declined to comment.
It was not clear how many of the wealth management products
had been sold by the bank, but a spokesman for Hua Xia's
Shanghai operations said on Tuesday the bank may face some
liability over the issue, without elaborating.
Hua Xia has said it was "aware" of reports that the
investments could not be repaid when the product matured, but it
has not confirmed the media reports.
So far, there has not been a high-profile case of default by
a Chinese wealth management product, many of which are marketed
by banks and highly sought by retail depositors attracted by
their higher interest rates. Banks' liability for the
performance of third-party instruments is untested.
Many of the products essentially channel money to the
so-called shadow banking system, where they help fund real
estate and other projects at very high interest rates.
(Reporting by Samuel Shen and Kazunori Takada; Editing by Ken