The Hong Kong-listed unit of the state-run Bank of China has suspended two senior executives for alleged unauthorised use of funds for personal use.

　　It is the second scandal to hit the unit in just over a year.

　　Bank of China Hong Kong (Holdings) Ltd, whose shares fell yesterday, said it was cooperating with an investigation launched on Monday by the Hong Kong Monetary Authority.

　　In a press release, the company said the Bank of China had told it mainland judicial authorities were investigating Zhu Chi and Ding Yansheng in connection with alleged unauthorized distribution for personal purposes of funds belonging to the controlling shareholder of former constituent banks.

　　The directors were told these funds do not form part of the assets of BOC Hong Kong, its subsidiaries or any of their respective customers and were distributed before the initial public offering of the company, the press release said.

　　The audit committee of the board and the independent non-executive directors decided to immediately investigate the allegations in order to confirm that they are unconnected with and do not affect the assets, liabilities and operating results of the company and will report the outcome to the board at the earliest possible date.

　　Acting appointments are being made to ensure the operations of the company and its subsidiaries will not be disrupted.

　　The press release said relevant regulatory authorities have been informed.

　　Investors and shareholders are advised to exercise caution when trading in its shares.

　　The new scandal follows the arrest in February of former Chief Executive Liu Jinbao after a probe into loans made while he ran the parent's Shanghai branch.

　　Liu was arrested and sacked as vice chairman of the Bank of China, about nine months after he was suddenly replaced at BOC Hong Kong.

　　BOC Hong Kong's lending practices were called into question after it lent money to fund a tycoon's purchase of a company that became Shanghai Land Holdings, which was eventually placed into receivership.

　　BOC Hong Kong was listed in July 2002 and is the third-largest bank in Hong Kong.

　　Analysts played down the importance of the latest allegations.

　　"I think this is a negative, but my gut feeling is this is part of the ongoing transformation of the company," said Dominic Chan, an analyst at CLSA.

　　"The probability of seeing these types of incidents going forward will be minimal," he said.

　　BOC Hong Kong was formed through the merger of 10 Bank of China units in 2001.

　　(Reuters/Xinhua)