The Board of Directors of the Bank of China Hong Kong (BOCHK) announced Tuesday that it had suspended two deputy chief executives from duty with immediate effect and put them under investigation.

In a press release, BOCHK said the company was informed by the Bank of China that judicial authorities of the Chinese mainland are investigating Zhu Chi and Ding Yansheng in connection with alleged unauthorized distribution for personal purposes of certain funds belonging to the controlling shareholder of former constituent banks.

The directors were further informed that these funds do not form part of the assets of BOCHK, its subsidiaries or any of their respective customers and were distributed prior to the date of the initial public offering (IPO) of the company, the press release said.

BOCHK's Audit Committee of the Board and the Independent Non-Executive Directors decided to immediately investigate these 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 that the operations of the company and its subsidiaries will not be disrupted. The company will, in accordance with law, cooperate fully with the relevant authorities in their investigation, said the press release.

It added that relevant regulatory authorities have been informed. Further announcements will be made to keep the shareholders and the public informed of developments in the matter. Meanwhile, investors and shareholders are advised to exercise caution when trading in shares of the company.

The Hong Kong Monetary Authority (HKMA) announced Tuesday morning that the HKMA has launched an investigation into the matter.

(Xinhua News Agency August 3, 2004)