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BEIJING - Chinese authorities have broken up an underground bank that did business in every one of the country's provinces, providing illegal funding for everything from stock market investments to property.
Beijing has been stepping up its efforts to crack down on illicit lending and to prevent speculative foreign capital from pumping up the country's share and real estate prices.
The State Administration of Foreign Exchange (SAFE) said that it and local police in the southern boomtown of Shenzhen had caught the head of the bank and five other suspects in a recent sting operation.
The bank, which had been in business for 7-8 years, was most active in Shenzhen and neighbouring Guangdong province, as well as the coastal manufacturing centres of Jiangsu and Zhejiang, the currency regulator said on its website on Monday.
In Shenzhen alone, the bank logged 4.3 billion yuan ($759.6 million) in transactions from the beginning of 2006 to May of this year, it said.
The bank's clients included well-known state-owned firms, SAFE said. They used the funds to pay for fuel, cover deposits for land-use fees, invest in shares and pay export-related fees, SAFE said.
- REUTERS
