Chinese authorities have uncovered an “underground bank”
which illegally transferred money overseas in a case valued at $64
billion (RM275.2 billion), said to be the country’s largest ever,
according to a police statement.
Chinese police have discovered an underground bank used in siphoning and transacting illegal and laundered money.
Police in the eastern city of Jinhua found that the chief suspect,
whose surname was given as Zhao, set up shell companies in Hong Kong and
then made transfers from the mainland through a network of more than
800 bank accounts, said a Jinhua police statement posted on Friday.
China keeps a tight grip on outflows of funds due to worries
capital flight could disrupt the economy. Individual Chinese citizens
are only allowed to convert the equivalent of $50,000 (RM 215,000) from
the domestic yuan currency under an annual quota.
A year-long investigation found more than 300 people were involved
in the underground bank, of which around 100 faced criminal punishment,
the police statement said.
Zhao used fake corporate accounts in Hong Kong to receive yuan,
converted the funds into foreign exchange through banks and transferred
it to his clients, it said.
China is moving gradually to make its currency fully convertible,
as part of economic reforms befitting its status as the world’s second
largest economy. Beijing also hopes to become one of the International
Monetary Fund’s reserve currencies as a constituent of its Special
Drawing Rights (SDR) basket.
IMF experts recommended earlier this month that China join the
exclusive club. IMF chief, Christine Lagarde said that staff experts, in
their report to the IMF board, ruled the yuan now “meets the requirements to be a‘freely usable’ currency”, according to a statement.
Source: AFP
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