China
police cracks $4.5 billion underground bank: Xinhua
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[November 25, 2015]
BEIJING (Reuters) - Chinese police
have busted an underground banking network that handled $4.5 billion
worth of illegal transactions at Agricultural Bank of China Ltd (AgBank)
alone, the official Xinhua News Agency reported on Wednesday.
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Fourteen suspects in four gangs were arrested by police in the
northeastern city of Dalian in Liaoning province, Xinhua said, the
latest crackdown in the country's fight against outflows of "gray
capital".
Each gang's daily illegal transactions exceeded $100,000.
The police found illegal transactions amounting to 28.8 billion yuan
($4.51 billion) from 1.4 million foreign exchange trading records,
after investigating more than 2,000 accounts at AgBank, China's
third-biggest lender by assets, the state agency said.
China's economic slowdown and market volatility have sparked a wave
of capital outflows running into hundreds of billions this year,
triggering alarms for China's foreign exchange management system.
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Beijing started cracking down on underground banks in April and has
so far uncovered more than 170 cases of money laundering and illegal
fund transfers, involving more than 800 billion yuan and arresting
more than 400 suspects.
Earlier this year, Chinese police, the central bank and the foreign
exchange regulator busted the country's biggest-ever underground
banking case involving transactions totaling $64 billion.
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In the Dalian case, suspects worked with criminal groups spread in
Beijing, Shandong province and Jilin province to conduct illegal
foreign exchange trading across China and offered gambling services
in Macau and South Korea to obtain illegal gains, Xinhua reported.
($1 = 6.3877 Chinese yuan renminbi)
(Reporting By Shu Zhang and Matthew Miller; Editing by Sanjeev
Miglani)
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