In another case highlighted by the People’s Daily on Friday, an investigation of an underground bank in Fujian this year uncovered a network spanning Hong Kong, Taiwan, Australia and Saudi Arabia – and a senior executive at a state-owned enterprise who allegedly tried to move 18 million yuan overseas, the newspaper said.
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According to Bloomberg, a man named Zhao Mouyi transferred billions of yuan through bank accounts meant for global companies, which are not usually available to Chinese citizens.
The probe began in September last year and the police took nearly a year to sort through more than 1.3 million suspicious transactions, the state-run Xinhua News Agency reported separately. Since then they have revealed over 170 cases of money laundering and illegal fund transfers totaling more than 800 billion yuan ($125.34 billion).
Although the crackdown, launched jointly by China’s police, foreign exchange regulator and the People’s Bank of China, has made a few progress, illegal activities of China’s underground banks are spreading and the situation is still grave, the article said.
One gang boss, Yang, told Xinhua that many customers wanted to avoid China’s strict supervision on foreign exchange trade.
Capital outflow accelerated in China this year. Chinese nationals have been moving their money offshore over fears of a weakening economy and with confidence that investments were safer outside the country.
The Ministry of Public Security said China has faced an “increasingly arduous and complicated” problem with unapproved financial institutions often used for laundering money obtained from corruption, online gambling and fraud.
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Chinese authorities started raiding underground banks in April.
