China's annual audit finds 15 billion yuan misused by banks

Three major Chinese commercial banks were targeted by China's National Audit Office on Wednesday for irregular or illegal transactions, which involved 15.56 billion yuan (2.05 billion U.S. dollars).

The misused money was uncovered during audits of the 2005 profit and loss accounts of the Bank of China, the Bank of Communications and the China Merchants Bank, Li Jinhua, head of the National Audit Office, said in a report to the national legislature.

"The audit has led to the discovery of 37 economic crime cases, with 55 bank staff caught in illicit operations involving 10.249 billion yuan," Li said in his report to the Standing Committee of the National People's Congress.

A third of the misused money, 5.1 billion yuan, had been misused in real estate transactions. Many bank branches had lent to unqualified real estate developers or home buyers at unauthorized "favorable" interests rates to attract more clients.

Bank branches were also found to have broken rules in account management, assets validation and money transfer, with sums totaling 2.15 billion yuan, just to lure more clients in daily operations.

Source: Xinhua