Ju­nior staff ‘stole nearly $600m from ma­jor Chi­nese bank’

The Pak Banker - - COMPANIES/BOSS -

BEI­JING: Two ju­nior em­ploy­ees of one of China's big­gest banks stole fi­nan­cial in­stru­ments worth 3.9 bil­lion yuan ($593 mil­lion) in a failed at­tempt to make a for­tune on the stock mar­ket, the bank ad­mit­ted. The two staffer, who worked in a Bei­jing branch of the Agri­cul­tural Bank of China, re­placed bills of ex­change -- prom­is­sory notes is­sued as part of nor­mal busi­ness -- which were stored in a safe with news­pa­pers, and sold the pur­loined items, re­spected busi­ness mag­a­zine Caixin on Mon­day cited an in­sider as say­ing. The pair, de­scribed as young and rel­a­tively new, in­vested the pro­ceeds in China's then-boom­ing stock mar­ket in hopes of mak­ing an enor­mous profit and re­plac­ing the miss­ing funds be­fore the theft was no­ticed, Caixin said.

But the scheme went awry when China's bourses im­ploded in mid-2015. The po­ten­tial losses could be as high as 3.9 bil­lion yuan, the Agri­cul­tural Bank of China, the coun­try's third-big­gest len­der, said late Fri­day in a state­ment to the Hong Kong stock ex­change where it is listed. Po­lice were in­ves­ti­gat­ing and the bank was co-op­er­at­ing, it added, in an ef­fort to "safe­guard the se­cu­rity of funds to the great­est ex­tent".

The huge size of the losses prompted the case to be re­ported to the State Coun­cil, China's cab­i­net, the Caixin re­port said. No in­for­ma­tion was given on the tim­ing of the theft or how it was dis­cov­ered. Sev­eral bank de­part­ments could deal with bills of ex­change, a staffer told Caixin, so that the case "ob­vi­ously in­volves more than two peo­ple". In De­cem­ber the bank's pres­i­dent re­signed for "per­sonal rea­sons" amid re­ports that he had been ques­tioned in con­nec­tion with a cor­rup­tion in­ves­ti­ga­tion. Au­thor­i­ties have launched a se­ries of in­ves­ti­ga­tions into the fi­nan­cial sec­tor af­ter a debt-fu­elled stock mar­ket bub­ble -- en­cour­aged by au­thor­i­ties -- burst in the sum­mer in a rout that wiped out tril­lions of dol­lars of mar­ket cap­i­tal­i­sa­tions.

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