China is in the grip of a major financial scandal, with confirmation that one of the country's most senior bankers is under investigation for loan cases he oversaw while he was president of the Bank of China. Mr Wang Xuebing has been fired from his position as head of the China Construction Bank as investigations get under way in China and the US into improprieties at the giant state-owned Bank of China.

China's Central Bank Governor, Mr Dai Xianglong, confirmed yesterday that Mr Wang had been sacked from his job as President of the China Construction Bank and was under investigation.

Mr Wang was president of the Bank of China, the country's largest foreign exchange bank, for nearly seven years before taking up his position at the China Construction Bank in February 2000.

Mr Dai said yesterday the Communist Party Central Committee and State Council, or cabinet, had made the decision to sack Mr Wang, one of the most prominent faces of corporate China.

Mr Wang, a suave, English-speaking financier, was also dismissed from his post as chairman of China Investment Capital Corporation, an investment-banking joint venture, in which China Construction Bank and Morgan Stanley are the largest shareholders.

China's Central Bank governor said Mr Wang was under investigation for loans by some Bank of China branches.