Bank of China (BoC) is not the biggest of that country's Big Four banks -- the institutions groomed by Beijing as the global representatives of the new Chinese financial system -- but it can claim to be the most prestigious.
It bears the country's name, it's the main sponsor of the 2008 Beijing Olympics, and is being prepared for a multibillion-dollar flotation on international capital markets this year. It also has a set of blue-chip international investors, including the Royal Bank of Scotland.
But BoC appears to be at least as vulnerable to fraud as any of the other three, and has caught the headlines -- for all the wrong reasons -- in China and abroad with worrying regularity over recent years, even before the stunning allegations emerging from Las Vegas.
Earlier this month Caijing, the Beijing-published magazine regarded as China's version of The Economist for its impartiality and exposes of financial crime, reported a "new scandal" at the bank.
Several managers of a local sub-branch in the northeastern town of Shuangyashan colluded with a local businessman to defraud the bank of US$54 million in acceptance notes.
The case once again exposed the bank's vulnerability to insider crime, despite attempts to reform and tighten regulation in the wake of a series of similar cases across the country." It is unbelievable that such a small sub-branch can have issued so many bankers' acceptance bills without arousing attention from higher banking authorities," Caijing reported.
Last year, former BoC vice chairman Liu Jinbao (劉金寶) was sentenced to death (later commuted) after stealing US$3 million from one of its Hong Kong branches, and before that former vice president Zhao Ange (趙安歌) got life imprisonment for accepting multimillion-dollar bribes.
Another local manager, Gao Shan (
Beijing's Banking Regulatory Commission ordered BoC to improve its internal risk controls to deal with fraud. The authorities argue that the cases coming before the courts in the US and China show that they are coming to grips with the problem.
Royal Bank of Scotland -- whose chief executive Sir Fred Goodwin sits on BoC's board -- took a 5 percent stake in the bank last year for around ?900 million (US$1.6 billion), and speaks for another 5 percent as part of a consortium of Western investors including US investment bank Merrill Lynch.
A spokesman said: "We are well aware of the press reports regarding the fraud case at the bank and the forthcoming trial in Las Vegas. Clearly it is a matter for BoC. It is well worth remembering that BoC has total assets of US$560 billion."
When Royal Bank negotiated its holding, it insisted on warranties and assurances from the Chinese about any unforeseen financial liabilities. BoC hoped to float on the Hong Kong bourse and possibly a non-Chinese exchange in the first half of this year, but this may be delayed until the fall, banking sources said.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
As Maldivian President Mohamed Muizzu’s party won by a landslide in Sunday’s parliamentary election, it is a good time to take another look at recent developments in the Maldivian foreign policy. While Muizzu has been promoting his “Maldives First” policy, the agenda seems to have lost sight of a number of factors. Contemporary Maldivian policy serves as a stark illustration of how a blend of missteps in public posturing, populist agendas and inattentive leadership can lead to diplomatic setbacks and damage a country’s long-term foreign policy priorities. Over the past few months, Maldivian foreign policy has entangled itself in playing
A group of Chinese Nationalist Party (KMT) lawmakers led by the party’s legislative caucus whip Fu Kun-chi (?) are to visit Beijing for four days this week, but some have questioned the timing and purpose of the visit, which demonstrates the KMT caucus’ increasing arrogance. Fu on Wednesday last week confirmed that following an invitation by Beijing, he would lead a group of lawmakers to China from Thursday to Sunday to discuss tourism and agricultural exports, but he refused to say whether they would meet with Chinese officials. That the visit is taking place during the legislative session and in the aftermath