Posted on 3/12/2005, 9:01:18 AM by Righty_McRight
BEIJING (AFP) - China's banking system is not only awash with debt but loopholes in its supervisory system have allowed 4,000 officials to flee with 50 billion dollars in cash.
"The current loopholes in China's system of financial supervision is the main reason for the success of corrupt officials in taking a large amount of funds overseas," Zhang Xiao, former head of the Industrial and Commercial Bank of China, said at the ongoing meeting of the National People's Congress or parliament on Friday.
Under existing banking rules, companies can open up numerous accounts in many different banks, making it easy for corrupt officials to launder money and send capital overseas, Zhang was quoted by the Beijing Morning Post as saying.
"At present, the way that enterprises wantonly open up accounts is still very serious, many enterprises have several accounts in many banks; this makes it difficult for financial supervision organs to grasp the situation of capital flight in a timely manner," Zhang said.
"Many corrupt officials and other criminals use company accounts to hide transfers and illegal income."
According to a report by Ministry of Commerce, some 4,000 officials have successfully fled with 50 billion dollars in illicit cash as of early 2005, the newspaper said.
The most recent case concerned Gao Shan, an official at the Hesong branch of the Bank of China in northeastern Heilongjiang province, who fled overseas after secretly transferring out of the country 120 million dollars this year, the newspaper recalled.
"The Heilongjiang case is a good example of how they used many differnt banks to transfer funds which weren't discovered in a timely fashion," Zhang said.
"If this had happened within the Bank of China system itself, the illegal transfer of large sums of money probably would have been discovered."
The bank supervisory system also does not allow for timely sharing of information between different banks, Zhang said.
"This situation has provided for 'moles' within the banking system to actively seek out corrupt officials and provide them with convenient methods for criminal activities using the state banking system to funnel large sums of illegal funds outside the country."
The Chinese banking system also suffers from huge non-performing loans, including 1.4 trillion yuan (170 billion dollars) shifted to four asset management companies created six years ago.
Bringing down this mountain of bad debt has become an urgent task for China as it seeks to prepare its largest banks for overseas share sales, making them as attractive as possible to potential foreign investors.
In late 2003, China injected a total of 45 billion dollars into two of its four largest state-owned commercial banks, Bank of China and China Construction Bank, as part of the lenders' restructuring programmes.
China is better equipped than ever for this kind of financial first aid with foreign exchange reserves in 2004 soaring to a record 609.9 billion dollars from 403.3 billion dollars in 2003.
Oopps!
Sulplise sulplise ...
I guess some people picked a bad time to stop sniffing glue and invest with stock in Chinese markets.
It is nice to know that our principle creditor and supplier of all things is in such good shape.
In Canada we have a name for these people, 'Asian Entrepreneurs.'
TIME TO BLING IN ZE GROBAL CLOSSING BLOOKKEEPER?
Ping!
I bet this is just the tip of the iceberg
"Principle creditor?"
Uhh, where are you getting your "facts?"
You mean like here? lol
But I thought commies were all for one, and one for all...I guess they got the all for one part right!
Can you say new BOXER rebellion?
You go there boys.
"Many corrupt officials and other criminals use company accounts to hide transfers and illegal income."
I don't think that money laundering is in the Little Red Book or Das Kapital.
I am sure these Chinese Bankers can have fulfilling careers at J.P. Morgan Chase, or Citibank.
Ok Where's my money? Certainly not in china, i don't buy much "Made in Cheapa" stuff.
I bet BJClinton got some of that looty booty!
The French have a phrase coined long ago which describes this type of behavior; "Chinoiserie".
Regards,
Jimmy Valentine wrote:
It has gone to earth in some very Chinese-type of hiding place.
--> Is it buried with the KhimChee? I don't know how to spell it. I wonder if those that took the $$ are going to have a nice mass, Mass Burial that is.
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