A 3.5 billion yuan loan fraud case, triggered by a "fake company seal," has embroiled two of China's financial giants, China Everbright Bank and China Merchants Bank, in a decade-long legal tug-of-war with no final resolution yet in sight.
On January 21, 2026, a public announcement from the listed company Jinlong Co., Ltd. brought the dispute between these two behemoths into the public eye. China Everbright Bank's Changchun Branch, acting as the plaintiff, has sued five defendants, including China Merchants Bank's Wuxi Branch, seeking compensation totaling 489 million yuan.
This case originates from a "fake seal" loan fraud that occurred ten years ago. Everbright Bank initially won the first trial, but CM BANK prevailed in the second trial. Now, Everbright Bank has once again filed a lawsuit, altering the cause of action.
Transitioning from a concluded criminal fraud case to a recurring civil dispute, this decade-spanning financial conflict not only exposes risk control vulnerabilities in banks' interbank business but also highlights the hidden risks of risk transmission through interconnected transactions among financial institutions.
The 3.5 Billion Yuan Fraud Puzzle It has been noted that neither China Everbright Bank nor China Merchants Bank disclosed this case, as it did not meet the reporting threshold. The reason listed company Jinlong Co., Ltd. disclosed it was because its subsidiary, Zhongshan Securities, was named as one of the defendants by Everbright Bank.
Rewinding to 2013, media reports indicate that Liu Xiaoyi, a businessman from Tonghua, Jilin, burdened by high-interest debt and losses from futures speculation, urgently needed substantial funds. Through an introduction, he met Zhang Lei from China Everbright Bank's Changchun Branch in an attempt to secure a 350 million yuan loan, but the application was rejected by Everbright's risk control department due to qualification issues. Undeterred, Liu Xiaoyi, through an intermediary in 2014, contacted an employee surnamed Hou from CM BANK's Wuxi Branch, devising a scheme involving "entrusted directional investment" to obtain the loan.
The core of this scheme was a forged "Entrusted Directional Investment Agreement." Zhang Lei affixed a self-forged Everbright Bank "fake seal." Relying on this counterfeit agreement, Everbright's Changchun Branch deposited 350 million yuan with CM BANK's Wuxi Branch under the guise of an "interbank deposit." CM BANK then channeled the funds through intermediaries like Zhongshan Securities, ultimately disbursing them as an entrusted loan to a rice company controlled by Liu Xiaoyi.
In August 2014, after discovering the abnormal fund flow, CM BANK's Wuxi Branch reported the case to the authorities. Liu Xiaoyi and Zhang Lei were subsequently apprehended. In 2016, the Wuxi Intermediate Court sentenced Liu Xiaoyi to life imprisonment and Zhang Lei to six years in prison for fraud, while also ordering the recovery of all illegal gains.
However, the effective criminal judgment merely marked the beginning of this financial dispute. Everbright and CM BANK then embarked on protracted civil litigation over the responsibility for the 350 million yuan principal and accrued interest.
In 2015, Everbright's Changchun Branch took the lead by suing CM BANK's Wuxi Branch, primarily seeking confirmation of the validity of the "Interbank Deposit Agreement" and demanding the return of the 350 million yuan principal along with corresponding interest and penalties. The core dispute centered on the nature of the funds: if classified as an "interbank deposit," CM BANK would be obligated to repay the principal and interest as agreed; if deemed an "entrusted directional investment," the risk would fall on Everbright itself.
The court of first instance supported Everbright's claims, ruling the "Entrusted Directional Investment Agreement" invalid due to the forged seal, while affirming the "Interbank Deposit Agreement" as legally valid. It ordered CM BANK to pay Everbright the full principal and interest. The first-instance court's logic was that CM BANK, as the recipient of the funds, failed in its duty to verify the authenticity of the seal and should therefore bear responsibility for the loss.
However, a reversal occurred in the second instance two years later. The Supreme People's Court overturned the first-instance judgment, declaring both agreements invalid and dismissing all of Everbright's claims. The Supreme Court pointed out that the fund flow in question was not a legitimate interbank transaction but part of the criminal chain of fraud orchestrated by Zhang Lei and Liu Xiaoyi, constituting "using a legal form to conceal an illegal purpose." Even without subjective collusion between the two banks, they objectively became channels for transferring illicit funds; thus, Everbright could not claim fund restitution based on invalid agreements.
Not accepting the second-instance judgment, Everbright Bank pressed on. In January 2026, Everbright's Changchun Branch filed a new lawsuit in the Changchun Intermediate People's Court in Jilin Province. This time, the list of defendants expanded beyond CM BANK's Wuxi Branch to include institutions like Zhongshan Securities, with the total claim amount increased to 489 million yuan. This includes the 350 million yuan principal and 139 million yuan in fund occupation fees (after deducting 24.8494 million yuan in recovered illicit funds).
It is noteworthy that this 3.5 billion yuan fraud dispute is not the first confrontation between Everbright-affiliated financial institutions and CM BANK. Previously, China Everbright Securities, a core member of the Everbright Group, became entangled in a massive debt dispute with a subsidiary of CM BANK related to an overseas acquisition, involving funds as high as 3.116 billion yuan plus related interest and fees.
Frequent Interbank Disputes The decade-long legal battle between Everbright and CM BANK is not an isolated case. In recent years, the number of disputes between banks concerning interbank business has been rising consistently, reflecting the risk transmission problems inherent in the tight interconnectedness of bank interbank activities.
A dispute between China Minsheng Bank and Bank of Zhongyuan is quite representative. In this case, Bank of Zhongyuan, as the holder of a bill, exercised its right of re-recourse against its prior endorser, Minsheng Bank's Zhengzhou Branch, after the bill was dishonored at maturity. It sued for payment of approximately 90 million yuan in bill amounts and related fees. The core dispute revolved around whether the bill liability had been legally discharged. In 2024, the Zhengzhou Intermediate Court issued a first-instance judgment, ruling that Minsheng Bank's Zhengzhou Branch had legally discharged its bill liability and did not meet the legal conditions for re-recourse, thus dismissing all of Bank of Zhongyuan's claims. Bank of Zhongyuan appealed the first-instance result, but the final outcome has not been publicly disclosed.
As a typical case of a bill dispute between two listed banks, its adjudication process holds reference significance for the recognition of financial institutions' bill rights and the division of liability.
Behind the frequent occurrence of interbank disputes lies the rapid expansion of interbank business and the increasing complexity of关联 networks. Domestic banks are intricately linked through various operations such as wealth management, bill transactions, interbank lending, and entrusted investments. While this interconnectedness enhances capital utilization efficiency, it also creates a scenario where risks are shared, leading to a situation of collective prosperity or collective loss.
In response to the increasingly prominent risks in interbank activities, regulatory authorities have gradually tightened controls. The revised "Commercial Bank Interbank Business Management Measures" in 2023 stipulate that the proportion of interbank funding for a single institution must not exceed 30% of its total liabilities. It also mandates穿透式审核 (look-through examination) for interbank business and strengthens the management of counterparty credit ratings. For banks, it is even more crucial to build a comprehensive internal risk control system from within.
The decade-long dispute between Everbright and CM BANK serves as a mirror reflecting the interbank risks within the banking industry. Against a backdrop of increasingly stringent financial regulation and a complex, volatile market environment, only by fortifying risk control defenses can banks achieve stable development within the interconnected financial ecosystem.
Regardless of the final outcome, this decade-spanning legal contest will leave profound lessons for the compliant operation of the banking industry.
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