Illegal Money Transfer: China busts biggest ‘underground bank’
China keeps a tight grip on outflows of funds due to worries capital flight could disrupt the economy
SHANGHAI:
Chinese authorities have uncovered an ‘underground bank’ which illegally transferred money overseas in a case valued at $64 billion, said to be the country’s largest ever, according to a police statement. Police in the eastern city of Jinhua found that the chief suspect surnamed Zhao set up shell companies in Hong Kong and then made transfers from the mainland through a network of more than 800 bank accounts. 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 from the domestic Yuan currency under an annual quota. A year-long investigation found that more than 300 people were involved in the underground bank, of which around 100 faced criminal punishment.
Published in The Express Tribune, November 22nd, 2015.
Chinese authorities have uncovered an ‘underground bank’ which illegally transferred money overseas in a case valued at $64 billion, said to be the country’s largest ever, according to a police statement. Police in the eastern city of Jinhua found that the chief suspect surnamed Zhao set up shell companies in Hong Kong and then made transfers from the mainland through a network of more than 800 bank accounts. 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 from the domestic Yuan currency under an annual quota. A year-long investigation found that more than 300 people were involved in the underground bank, of which around 100 faced criminal punishment.
Published in The Express Tribune, November 22nd, 2015.