Chinese Police Uncover $30 Billion in Illegal Banking Activity


Chinese Police Uncover $30 Billion in Illegal Banking Activity

By Kenya Confidential Financial Correspondent – Nairobi, August 21, 2016

Kenyans suspected to be involved in money laundering proceeds from mega Chinese projects

Chinese police have this year uncovered $30 billion worth of illegal banking activity, involving 158 cases of underground banks and money laundering, the Ministry of Public Security (MPS) has revealed.

According to the official Xinhua news agency, a special task force, jointly launched by the MPS, Central Bank, and Foreign Exchange Regulator, uncovered illegal banking services in 192 locations.

Beijing started a crackdown on underground banks in April last year and uncovered over 170 cases of money laundering and illegal fund transfers involving more than 800 billion yuan as of last November.

See also: China Says Foreign Investors’ Concern Over Its Cybersecurity Bill Is ‘Unnecessary’

China has been dogged by reports of rogue managers of P2P – shadow banking platforms – and has been criticized by local and overseas investors for being soft on money laundering, prompting authorities to take action.

The crackdown included the investigation on the country’s biggest underground banking case that handled $64 billion worth of illegal transactions.

Corruption damage 4

Although the crackdown has curbed underground banking to some extent, illegal activities using those “grey capital” networks are still spreading and becoming more elusive. Underground banks are channels for transferring money obtained through illegal activity, including public funds embezzled by corrupt officials.

See also: Can Bitfinex Really Impose a $72 Million Theft on Its Customers?

“Criminal activities by underground banks are still rampant. There is increasing collusion among underground banks in different regions,” Xinhua reported.

Informed sources say several foreign countries nationals are involved in the underground banking to evade official scrutiny by their governments. It is highly likely that corrupt Kenyans are part of the illicit financial transfers and money laundering with funds accruing from convolution involving billions worth of Chinese projects in Kenya.