Massive corruption in China banks, 50 bln dlrs missing
Yahoo!News/Business-AFP
Fri Mar 11, 8:16 AM ET Business - AFP[Excerpt]
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.