A total of 13 staff were found to have sold the products.

China’s Minsheng Bank has been fined RMB27.5 million ($4.2 million) over fake wealth management products that exposed lax internal control and risk management at the lender.

A total of 13 employees were fined for selling wealth management products to some 150 affluent retail investors that did not actually exist, the China Banking Regulatory Commission said. 

Zhang Ying, the former head of the bank’s Hangtianqiao branch in Beijing, was slapped with a lifetime ban from the banking sector. 

The regulator has ordered the bank to rectify its wrongdoings, but did not specify how investors would be compensated. 

The crooked employees had sold the products as an exclusive offering for longstanding private banking clients who had at least 10 million yuan in assets at Minsheng. 

The investors bought the so-called “innovative” transferred wealth management products from the original investors, according to investment contracts reportedly seen earlier by the South China Morning Post.

Staff told the buyers that the original investors urgently needed cash and were willing to cash out of the products which were not yet ready to reap the supposed yields. As a result, the products, which guaranteed at least 4.2 per cent annual returns, were converted into a product with more than 8 per cent annual returns.