Li Guobao, the current chairman and CEO of Bank of East Asia (00023.HK), a veteran local bank in Hong Kong, has recently been involved in a Spanish banking criminal investigation.The case involved the 2015 acquisition of Banco BPI, a large listed Portuguese bank, by CaixaBank, Spain's third largest bank.On October 22, a group of listed companies in Hong Kong issued announcements to disown their relationship with Li Guobao.
Bank of East Asia announced on the Hong Kong Stock Exchange on October 16 that the National Court of Madrid launched a criminal investigation on October 3 this year, involving several equity transactions in the Spanish banking industry.The investigation stems from allegations made by two CaixaBank shareholders that the above-mentioned series of transactions involved market abuse, insider trading, misrepresentation of financial statements, mismanagement of the company, and unfair treatment of shareholders.
The East Asia announcement said that the targets of the investigation included CaixaBank and its parent company Criteria, both of which are controlled by the Barcelona Savings and Pension Fund Financial Foundation (le Caixa).Li Guobao, Fan Lixian (Isidro Faineacute; Casas) and five other CaixaBank executives or directors are also under investigation.Fan Lixian is a non-executive director and chairman of Criteria of the Bank of East Asia.
Li Guobao and Fan Lixian both served as directors of CaixaBank, and they resigned on October 23, 2014 and June 30, 2016 respectively.
After the incident, many listed companies where Li Guobao worked issued announcements to clarify the relationship.Hong Kong Shanghai Hotel Co., Ltd. (00045.HK) and Vitasoy International (00345.HK), the parent companies of The Peninsula Hotel, announced on October 22 that Li Guobao was an independent non-executive director and did not participate in the daily business of the company.There is also no other information about the above-mentioned investigation, and the investigation has nothing to do with the company's business.
The BEA announcement said the bank was informed of the investigation through media reports.Li Guobao and Fan Lixian have notified the Bank of East Asia that they believe that the allegations are baseless and unfounded.On October 23, a spokesman for the Bank of East Asia said in response to inquiries from Caixin reporters that it would not comment further on the case except for the content of the announcement.
CaixaBank was once the largest shareholder of BEA.Bank of East Asia has a close relationship with CaixaBank and Le Caixa, the ultimate holding parent company of Criteria. The two parties have signed an investment agreement. Criteria once said that it will hold Bank of Asia as a long-term shareholder.On December 3, 2015, CaixaBank announced that it would transfer its 17.24% shares in East Asia and 9.01% of Grupo Financiero Inbursa shares to Criteria (hereinafter referred to as the transfer transaction), exchanging 9.9% of CaixaBank shares held by the other party, and 642 million euroscash payment.At present, the transfer transaction is included in the criminal investigation.
According to the East Asia announcement, the investigation also involves CaixaBank’s acquisition of Banco BPI, when CaixaBank wanted to increase its stake in Banco BPI from 39.04% to 84.5%, as well as two other bank equity transactions and credit arrangements.
Established in 1918, the Bank of East Asia is an established local bank in Hong Kong and the largest independent Chinese bank.As of 2017, Bank of East Asia's income from continuing operations reached HK$15.953 billion (approximately RMB 14.1 billion), net profit attributable to shareholders from continuing operations was HK$6.298 billion, total assets amounted to HK$808.942 billion, and total deposits reached HK$608.150 billion (approximately RMB 14.1 billion).total RMB 538.5 billion).
Li Guobao is the fourth generation descendant of the Li Peicai family.The Li Peicai family is a well-known banking family in Hong Kong and a distinguished family in the colonial period of Hong Kong. The Li Peicai family has held important positions in Hong Kong for generations. In addition to the banking industry, members of the Li Peicai family have also served as judges of the Hong Kong Court of Final Appeal, members of the Executive Council, Legislative Council, and government departmentsSecretary, University President and other positions.
CaixaBank is a large financial service institution in Spain, and the company is listed in Spain.On April 19, 2018, the Spanish High Court announced that it would formally investigate CaixaBank because it was suspected of participating in a money laundering activity involving Chinese suspects, involving nearly 100 million euros (about 796 million yuan).Industrial and Commercial Bank of China (601398.SH, 01398.HK) is involved in money laundering for Chinese organized crime groups through its Madrid branch in Spain, and the money laundering case of ICBC Madrid branch is also under investigation.
The share price of Bank of East Asia closed down 3.05% today, at HK$25.45 per share.Hong Kong's Hang Seng Index fell 3.08 percent to 25,346.55 points.■
