China Minsheng branch chief detained over $240 mln in missing funds

HONG KONG, April 28 (Reuters) - China Minsheng Banking Corp

said on Friday the head of one of its branches and

some staff have been detained and are being investigated in

connection with missing funds worth 1.65 billion yuan ($240

million) involving more than 150 customers.

Last week, the Chinese bank said it had notified

police that the head of one of its branches was suspected of

illegal conduct after media reports of missing money from wealth

management products. It said it had set up a working group to

assist police.

In a statement to the Hong Kong stock exchange on Friday,

China Minsheng said it would adopt "feasible ways" to resolve

the issue. It did not elaborate.

It said Zhang Ying, the president of its Hangtianqiao

sub-branch, had defrauded customers by using forged wealth

management contracts and bank seals. The funds raised did not

enter the bank's accounting system, it added.

"This operational risk incident was triggered by one

individual's moral hazard, and is suspected of being illegal

conduct," China Minsheng Chairman Hong Qi said in the filing.

The bank said it was collaborating with police and cash,

property and goods belonging to the suspects had been seized.

($1 = 6.8958 Chinese yuan renminbi)

(Reporting by Donny Kwok; Editing by Stephen Coates)