Industrial and Commercial Bank of China distanced itself from the Shanghai Social Security Fund scandal late Tuesday, saying it had no links to loans given to Fuxi Investment, which is alleged to have received several billion yuan in loans from the fund, sources close to the lender said.
The lender, which begins bookbuilding in the mainland today, offered an updated version of listing information but gave no further details about the loan in question on the Web sites of the Hong Kong Stock Exchange and Shanghai Stock Exchange.
It obtained approval in principle Tuesday for its A-share listing.
Sources close to the bank clarified that the loan in question was for two toll-road projects that were later acquired by Shanghai Fuxi Investment.
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Fuxi chairman Zhang Rongkun was detained in mid-July. He allegedly received more than 3 billion yuan (HK$2.95 billion) loan from the fund in 2002.
He was also executive director of Shanghai Electric (2727).
"It was a loan to the state-owned enterprise that originally held the two toll roads Fuxi acquired [using illegal funds] later. It [the loan] is not related to Fuxi or the fund [scandal] directly. The loans are clean and not even classified as special-mention loans. We don't think it will hurt the lender financially or its IPO sentiment," the source said, referring to loans that require special attention but are not bad debts.
Mainland newspaper reports said ICBC is believed to have lent 65.1 billion yuan to Fuxi as of June.
According to the preliminary information posted September 22 on Web sites of regulators in Hong Kong and the mainland, ICBC has a total of 4.46 trillion yuan in outstanding loans, of which 2.4 trillion, or 69.4 percent, are corporate loans. There is no indication of loans related to the fund.
ICBC began pre-marketing Monday in Hong Kong, while activities in the mainland kick off today for its dual listing. A mainland broker said it had set an indicative price range of between 2.2 times and 2.4 times price to 2006 forecast book value.
The bank aims to raise about US$21 billion (HK$163.8 billion) offering 35.4 billion H shares in Hong Kong. This represents about three-quarters of the total new shares issued. It will offer 13 billion A shares in Shanghai, or about a quarter of total new shares issued.
Pre-marketing activities wind up in both markets next week and the IPO roadshow starts October 9.
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