Bank of China Staff Stealing US$500 Million, and Fleeing: Report

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Last updated at: (Beijing Time) Saturday, March 16, 2002

Bank of China Staff Stealing US$500 Million, and Fleeing: Report

The Bank of China, the country's largest foreign exchange lender, has confirmed five of its employees stole nearly US$500 million before fleeing abroad.

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The Bank of China, the country's largest foreign exchange lender, has confirmed five of its employees stole nearly US$500 million before fleeing abroad.

The theft took place at a branch in the southern city of Kaiping over a period of seven years and some of the money was later laundered in Macao and Las Vegas, bank president Liu Mingkang told reporters, according to Saturday's Financial Times newspaper.

The five employees had fake passports at their disposal and fled overseas as the fraud was about to be uncovered, Liu said. Some of the stolen money was laundered in the gambling centres of Macao and Las Vegas.

Chinese media had previously reported that an even larger amount of cash had gone missing. A southern Chinese weekly, the 21st Century Business Herald, in January quoted state auditors as saying officials from two branches in southern Guangdong province transferred US$700 million into overseas accounts over a 10-year period.

Former Bank of China president Wang Xuebing was dismissed as head of the Construction Bank of China in January and is under investigation. The bank's New York has been found with fraud. The US Treasury Department and China's central bank announced earlier this year a joint 20 million dollar fine for malpractices at the bank's New York branch during the past decade.

Liu also revealed that he had ordered audits of Bank of China operations in the southern boom town of Shenzhen and the western city of Chongqing. After the audit in Chongqing, one deputy manager committed suicide, another official was sacked and a third sent to prison.

Chinese Premier Zhu Rongji said Friday the recent financial scandals at the Bank of China would not affect plans to list Chinese banks abroad.

"Problems that have occurred in some individual branches won't affect the reputation of China's banking sector or the objective of listing banking institutions at home and abroad," he told reporters.

Zhu said that given the large size of Bank of China and the country's three other main state-owned commercial banks, it was not surprising that some individual branches had suffered "irregularities".

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