US$35.8 billion of funds abused this year
By Liu Weiling (China Daily)
Updated: 2005-12-27 06:08
In the first 11 months of this year, Chinese auditors have discovered illegal
abuse of 290 billion yuan (US$35.8 billion) of government funds.
A conference of the National Audit Office (NAO), which monitors the use of
government money including State-owned enterprises also heard that 22,000
officials had been audited up to November.
Of them, 196 officials were found to have been in violation of laws and
regulations, and were dealt with by supervisory or judiciary organs, officials
said on Monday.
The frequent occurrence of irregularities in branch offices of domestic banks
have aroused concerns among auditors, who promised to tighten scrutiny next
Li Jinhua, auditor-in-chief of NAO, said the books of some branches and
sub-branches of Bank of China (BOC), Bank of Communications and China Merchants
Bank will be checked in 2006.
A string of major fraud cases were found this year in sub-branches of banks,
triggering widespread worries about China's financial risks.
In a typical case, the head of one of Bank of China's Harbin sub-branches
embezzled 290 million yuan (US$35.8 million) and vanished at the beginning of
The China Banking Regulatory Commission said yesterday it had punished 799
staff members of the country's Big Four State banks after finding they were
involved in illegal or unauthorized loans totalling 588.5 billion yuan (US73
The banking watchdog said in a report the wrongdoers were working in 103
institutions of the Big Four, including the Industrial and Commercial Bank of
China, Agricultural Bank of China, China Construction Bank and Bank of China.
This year, NAO audited the headquarters and 21 branches of the Agricultural
Bank of China.
Auditors also checked 22 county-level sub-branches of the bank.
The inspection found 51 suspected irregularity cases involving 8 billion yuan
(US$987 million). Almost all the cases happened in the sub-branches.
Li told the conference that in these sub-branches, irregularities were common
when granting individual consumption loans, real estate development loans and
land reserve loans.
Some branches were also found to embezzle deposits or illegally attract
deposits with interest rates higher than those set by the central bank.
Li attributed the problems to imperfect internal control systems and poor
internal management, bad supervision and restraint systems and insufficient
management from higher-level branches or headquarters.