Markets, page 17
Translated by Liu Peng
Original article: [Chinese]

The Shenzhen branch of China's Industrial Bank was being boycotted by a batch of local state-owned firms in retaliation for a lawsuit won by the bank against one of their own.

The boycott ocurred after the bank's Guangzhou branch won a lawsuit against the Shenzhen Airport, a state-owned firm supervised by the State-owned Assets Supervision and Administration Commission of Shenzhen. Sources said this arm of the commission was the force behind the boycott.

The lawsuit stemmed from a 225 million yuan loan taken out by the airport's general manager, Cui Shaoxian, in 2003. Instead of putting the funds toward airport construction as stipulated in the loan contract, Cui handed them over to a business contact, Zhang Yuming, who then lost much of it in the stock market.

In mid-2004, with the loan still unpaid, Shenzhen Airport under the management of Cui signed a second agreement with the Guangdong bank, saying that it would repay the loan in installments.

But repayment were not forthcoming, and in 2005 the bank brought the case to the Guangdong High Court, which ruled that the Shenzhen Airport must repay over 192 million yuan in loans and corresponding interest.

Throughout, the Shenzhen Airport claimed that since the loans never made it into its bank account, it was not responsible for repaying them.

A source from one state-owend Shenzhen firm told the EO, "The Shenzhen state assets commission has demanded us to completely cease cooperation with the Shenzhen branch of the Industrial Bank and withdraw all deposits there,” which he interpreted as an effort to make an example out of the bank.

The EO tried to confirm the matter with the commission, but had not received a response as of press time.

Already, some firms had withdrawn their deposits from the branch.

“This is absolutely unreasonable! The lawsuit should be solved by law," a manager at the Industrial Bank's Shenzhen branch told the EO, "We have reported the matter to our headquarters and are consulting with the Shenzhen state-owned assets commission, though we won’t escalate things and report it to the banking regulatory agency."

“The Shenzhen state-assets commission just wants to put some pressure on the Industrial Bank in order to recoup losses for Shenzhen Airport during the repayment,” said one source from a Shenzhen state-owned firm.

There are some 20 such state firms under the jurisdiction of Shenzhen's state-owned assets commission, according to data posted on its website.