BEIJING - The Bank of China, China's third largest lender, announced Tuesday that several employees of one of the bank's branches in northeast China's Liaoning province are being investigated by police over the alleged embezzlement of 10 million yuan ($1.58 million) in client deposits.

The bank said Li Jun, chief of a bank branch in the city of Panjin, is suspected of participating in fraud and is being investigated by police.

The bank said it has sent working teams to investigate the matter. Local authorities are also conducting further probes.

The response by the BOC comes after recent media reports stating that Li had used his power to embezzle deposits.

The bank said it will severely punish any employees who engage in illegal activity.