China's Supreme Court has ordered the Bank of China (BOC) to pay Northeast Expressway Co. 293 million yuan (US$42 million) plus interest, to compensate for money that disappeared from the company's BOC account in 2005, the Beijing News reported Tuesday.

BOC contested lower court judgment

On January 4, 2005, Northeast Expressway, a domestic freeway construction company, discovered that its accounts at the Bank of China's Hesongjie branch in Jilin Province were empty. The company had had a total of 293 million yuan in its accounts.

Around the same time, Gao Shan, then head of the Hesongjie BOC branch fled to Canada and a few days later, Northeast Expressway board chairman Zhang Xiaoguang was arrested.

According to police investigation, Gao, Zhang and Li Dongzhe, the boss of Beijing Shiji Luzhou Investment Company, were good friends. Li bribed Zhang to deposit Northeast Express' money at Hesongjie BOC branch. Then Gao transferred the bulk of the company's funds to Gao and Li's personal accounts. Gao and Li fled to Canada separately in December 2004.

In January 2005, a lawsuit was filed by Northeast Express in the Jilin Supreme People's Court and later transferred to the Supreme People's Court. On March 17, 2008, the court ruled that in view of the bank's lack of surveillance over accounts, the Hesongjie branch should return Northeast Express its deposits plus interest. The bank appealed the ruling.

BOC considers a further appeal

Although the loss of the money was not the fault of the bank branch as an institution, but by its former head Gao Shan, Northeast Express deposited its money with the bank not as an individual, therefore the branch should take responsibility for the loss, said Wang Zhe, a lawyer with the Beijing Genesis Law Firm.

As to Northeast Express' former board chief Zhang Xiaoguang, the Supreme Court said there was no evidence showing that Zhang had conspired with Gao and Li to steal the money.

A lawyer for BOC said that the bank suspected that Zhang was involved in the case and will wait until after Gao and Li's extradition to gather more evidence for a further appeal.

(China.org.cn by Yan Pei, December 31, 2008)