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Zhou Lu, general manager of Bank of China's Shanghai Branch, was dismissed from his position last week due to "huge amount of troublesome loans'' to a local real estate business, bank sources revealed Wednesday.

Zhang Tao, a senior branch publicity officer, told China Daily Wednesday that, according to an internal bank announcement made on July 2 by the bank's head office in Beijing, Zhou is "not fit to work as the general manager any longer due to "troublesome'' loans to Wantai Group during his term.''

"Zhou is partly responsible for those loans,'' Zhang said, quoting the statement by the bank's top leadership.

Shanghai-based real estate developer Wantai Group, together with Nongkai Development (Group) which is headed by scandal-tainted real estate tycoon Zhou Zhengyi, is now under investigation over possible loan frauds, although no results of this have yet been revealed.

The bank's publicity officer denied local media reports that the dismissal of the branch chief had any connection with the Zhou Zhengyi scandal.

Wantai Chairman Qian Yongwei has been reportedly detained over almost 1.3 billion yuan (US$150 million) of fraudulent loans from the Bank of China's Shanghai branch.

The spokesman admitted that Wantai's loan frauds start in the 1990s, even before Zhou Lu took up his position as general manager of the branch.

But the former general manager will be held mainly responsible for nearly half of those questionable loans, he said.

Currently, the Bank of China's Shanghai branch has the highest non-performing loan rate among commercial banks in Shanghai, Zhang said.

But the Shanghai branch's rate remains below the bank's national level, he said.

Although Zhou Lu currently has no position at the branch, he still goes to work every day, according to the spokesman.

Huang Zhiwei, general manager of the bank's Jiangsu Province branch, has been appointed by the bank's head office to replace Zhou, he said.

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