Bank duo’s theft scheme fails when stock markets crash
Print Edition
TWO junior employees of one of China’s biggest banks stole financial instruments worth 3.9 billion yuan (US$593 million) in a failed attempt to make a fortune on the stock market, the bank has admitted.
The two staff members, 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, business magazine Caixin yesterday cited an insider as saying.
The pair, described as young and relatively new, invested the proceeds in China’s then-booming stock market in the hope of making an enormous profit and replacing the missing funds before the theft was noticed, Caixin said.
But the scheme went awry when the stock markets imploded in the middle of last year.
The potential losses could be as high as 3.9 billion yuan, the Agricultural Bank of China, the country’s third-biggest lender, said in a statement to the Hong Kong stock exchange where it is listed.
Police are investigating and the bank is cooperating, 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 China’s State Council, the Caixin report said.
No information was given on the timing of the theft or how it was discovered.
Several departments deal with bills of exchange, a staff member told Caixin, so 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-fueled stock market bubble burst in the summer in a rout that wiped out trillions of dollars of market capitalizations.
The Agricultural Bank of China already held the record for the largest bank robbery in Chinese history, when two vault managers stole 51 million yuan in 2007 and spent most of it on lottery tickets and gambling.
The perpetrators were executed.
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