SHANGHAI - Bank of China has been ensnared in another corruption scandal with a Chinese businessman arrested for embezzling 146 million yuan (US$ 18 million) from a local branch, state media reported.

Wu Guofang, general manager of Zhoukou Wanyuan Beer company in central Henan province, embezzled the money from the Shenqiu branch in 2004 and 2005 with the help of bank employees, the official China News Service said at the weekend.

Wu apparently used false credit guarantees and collateral to win bigger bank loans than he was authorized to, the report said, without giving any details on the employees who allegedly helped him.

The Bank of China said late Monday the fraud "would not seriously affect the operation and fiscal situation" of the bank.

The bank had taken precautions against asset loss, bank spokesman Wang Zhaowen told Xinhua news agency.

Wu's alleged crimes are only small-scale compared with other corruption scandals to have hit Beijing-based Bank of China, the nation's second biggest commercial lender, in recent years.

The Bank of China reported in April it had fired or dismissed 75 bank officials for corrupt practices, while there have been a string of high-profile individual cases reported in recent years.

Among them was the former head of the Bank of China's Hong Kong branch, Liu Jinbao, who was given a suspended death sentence in August last year for embezzlement and bribery.

The corruption issue failed to dampen investor enthusiasm for Bank of China, which listed on the Hong Kong stock exchange last week in the world's largest initial public offering in six years.

Bank of China's float raised 9.7 billion dollars, with shares then soaring 15 percent on their debut.