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China's biggest bank misaccounts for billions
The Epoch Times
China’s National Audit Office reports that the Industrial and Commercial Bank of China, one of the "big four" state-owned banks in China, has serious accounting errors at all of its 21 branches. In a reports published on its website, the Audit Office noted that 35 billion yuan ($4.2 billion US) not accounted for. The Audit Office reccommends legal action for 58 separate cases of mismanagement of funds.
The bank’s problems mainly fell into four categories.
The Audit Office did not disclose detailed information about the 35 billion yuan unaccounted for.
Recently the Audit Office reported that audits of 36,000 government officers who had financial problems turned up $67.1 billion yuan in misallocated funds. 317 of these officials were disciplined internally, 749 people were referred to the legal department for further investigation, with 267 of the 749 getting demoted or dismissed.
According to a China Business Post report, the Industrial and Commercial Bank of China (ICBC), will be the next bank to get a capital injection from China's foreign reserves. The Bank of China (BOC) and China Construction Bank (CCB) received $22.5 billion US each at the end of December. The Postreports the ICBC will receive $40 billion US.
The ICBC is carrying more bad debt than the other two banks.
According to the Hong Kong-based Mingpao newspaper, the ICBC has the largest capital among the four state-owned banks in China. ICBC is currently under joint-stock reform, and is expected to finish its reforms by 2005, to be ready to go onto the stock market in 2006.
It's got a long way to go. According to data released by China Banking Regulatory Commission, the bad debt rate for Commercial Bank of China is 22 percent. Independent economists peg bad debt closer to 50 percent of assets.
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