BANK of Jinzhou Co. said its auditors resigned, sending some of its debt securities plunging. Ernst & Young Hua Ming LLP and Ernst & Young said in a resignation letter to the bank that there are indications that some loans to institutional customers weren’t used in ways consistent with the purposes stated in documents, Bank of Jinzhou said in a statement late Friday. The lender’s shares are suspended from trading in Hong Kong. China’s small and mid-sized lenders have been under increasing scrutiny after regulators last month seized control of Baoshang Bank Co., citing serious credit risks. The central bank said Sunday that the move was an isolated case triggered by misappropriation of funds by Baoshang’s largest shareholder. Bank of Jinzhou’s loss-absorbing debt instruments, known as AT1 bonds, fell to a record low yesterday morning. Trading in its Hong Kong shares has been suspended since April 1 after publication of the financial results was delayed. Ernst & Young, hired in May 2018 to review Bank of Jinzhou’s accounts for the latest financial year, had asked for additional documents to demonstrate the clients’ ability to service the loans. While it had been working with Ernst & Young to provide the information, the two sides had been unable to reach a consensus on how to resolve the concerns or confirm a timetable for publishing the delayed 2018 results, the bank said. Apart from what is already disclosed, Ernst & Young’s resignation letter said there’s nothing else the firm considers should be flagged to shareholders or creditors, Bank of Jinzhou said in its statement. (SD-Agencies) |