The bank said it received the confirmation from its Beijing-based parent yesterday.

The investigation of Liu started after his transfer back to Beijing and is looking at loans made through BOC's Shanghai Branch, the statement said.

BOCHK said the bank is not under investigation, but will co-operate with Hong Kong authorities in the probe of Shanghai Land tycoon Chau Ching-ngai and his affiliate companies.

BOC said last Friday that its Hong Kong-listed arm had made a bridging loan of HK$1.77 billion (US$227 million) to New Nongkai last year, the balance of the principle of the loans remaining at HK$741 million (US$95 million).

But the loan was processed and approved in the normal manner, BOCHK reiterated.

The bank also said it had decided to set up a special committee to review its credit approval process and risk management and internal control mechanism.

Also yesterday, responding to the investigation on Chau and Liu, Kong Quan, spokesman of the Foreign Ministry, said the mainland authorities would conduct the probe in strict accordance with the law.

It is unnecessary for the international community to raise doubts on China's banking system because of individual cases, he said.

China Daily news

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