ICBC says online glitch inflated gold quotes
Industrial and Commercial Bank of China said a technical glitch had hit its trading system for gold. The bank sought to cancel all related transactions, which reportedly would have cost it at least 10 million yuan (HK$11.3 million).
In a statement on its website, ICBC said there was a temporary price-quote abnormality in the gold trading system and the price 'seriously diverged' from market prices, without giving details.
'According to laws and gold trading agreements signed by our clients and the bank, the abnormal trades must be cancelled,' the bank said.
ICBC quoted 848 yuan per gram of gold on its online trading system on Friday, about 4.5 times the 190 yuan per gram price it offered in previous days, the Beijing Times reported. The newspaper estimated that the bank might lose more than 10 million yuan as a result.
'It was like a gift from Santa,' a seller was quoted by the paper as saying. The inflated price lasted for more than 20 minutes, he added.
ICBC said the trading system had resumed operation and that the bank was communicating with its clients. It was the second reported online gold-trading incident in less than three years at ICBC.
In May 2006, investors Fan Wenda and Song Ronggui bought bullion online at prices far below those in the market and gained more than 21 million yuan. However, ICBC forfeited their profit, claiming that the deals were illegal. A court ruling is still pending.
At the end of last month, the bank had 55.46 million individual clients and 1.43 million corporate clients for its online banking business. A total of 129 trillion yuan of transactions have been conducted through the system this year, the highest among mainland banks, according to ICBC.
Serious coin
Gold transactions carried out during the system malfunction could have cost ICBC at least, in yuan: yuan 10m
