Junior staff ‘stole nearly $600m from major Chinese bank’

Beijing, January 25

Two junior employees of one of China’s biggest banks stole financial instruments worth 3.9 billion yuan ($593 million) in a failed attempt to make a fortune on the stock market, the bank admitted.

The two staffer, 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, respected business magazine Caixin today cited an insider as saying.

The pair, described as young and relatively new, invested the proceeds in China’s then-booming stock market in hopes of making an enormous profit and replacing the missing funds before the theft was noticed, Caixin said.

But the scheme went awry when China’s bourses imploded in mid-2015.

The potential losses could be as high as 3.9 billion yuan, Agricultural Bank of China, country’s third-biggest lender, said late Friday in a statement to the Hong Kong stock exchange where it is listed.

Police were investigating and the bank was co-operating, 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 the State Council, China’s cabinet, the Caixin report said.

No information was given on the timing of the theft or how it was discovered.

Several bank departments could deal with bills of exchange, a staffer told Caixin, so that the case ‘obviously involves more than two people’.

In December 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-fuelled stock market bubble — encouraged by authorities — burst in the summer in a rout that wiped out trillions of dollars of market capitalisations.

The Agricultural Bank of China already held the record for suffering 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.