State TV accuses bank of money laundering

CCTV ran a show accusing Bank of China of offering money laundering service to wealthy clients

A labourer works beside a logo of Bank of China: report has prompted speculation that the government is getting ready for a new campaign to tighten up capital outflow controls. Photograph: Reuters

A labourer works beside a logo of Bank of China: report has prompted speculation that the government is getting ready for a new campaign to tighten up capital outflow controls. Photograph: Reuters

 

It’s not common for the state-owned Chinese Central TV (CCTV) to blow the whistle on an equally powerful government-owned monolith, especially when that institution is Bank of China, the fourth-largest of the state-owned commercial banks.

But that’s what happened last week when CCTV ran a show accusing Bank of China of offering money laundering service to wealthy clients trying to get out of the country.

The report has prompted speculation that the government is getting ready for a new campaign to tighten up capital outflow controls, and a broader shake-up of the financial and banking sectors.

The report showed an undercover reporter being briefed by a Bank of China employee in the southern province of Guangdong on how to channel large sums of money overseas.

Bank of China linked to immigration agencies to hide the origin of clients’ money and helped them send funds overseas for investment immigration.

However, banking sources insist the practice is not illegal and is carried out by other major banks. The South China Morning Post reported that Citic Bank was also involved in similar transactions.

Strict controls

Using the bank’s “Youhuitong” system, customers who want to migrate to North America, Australia and parts of Europe can shift the currency, which is often more than the $50,000 (€36,600) Chinese citizens are allowed to take out of the country each year.

‘Critical reports’

The report said Bank of China was “blatantly offering money laundering services” and said a single branch in Guangdong had channelled six billion yuan (€710 million) out of the country this year.

In a statement, the bank denied it had broken foreign-exchange rules or provided money laundering services, but said the CCTV report contained “discrepancies and misunderstandings of the facts”.

“Bank of China introduced a cross-border yuan transfer service in 2011 that only allows money to be moved for immigration and overseas property investment purposes,” the lender said. The company has strict and robust operational procedures for its cross-border yuan transfer business, it said.

Both Bank of China and CCTV are “central enterprises” which come under the remit of China’s cabinet, the State Council. China is tightening up financial regulations, and is currently staging a nationwide crackdown on insider trading in the mutual fund industry.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.