Disgraced president quizzed in biggest financial scandal since 1949

Mainland investigators have uncovered China's biggest financial scandal since 1949, involving the disappearance of six billion yuan (HK$5.66 billion) from the Bank of China.

They also say they have found a Hong Kong smuggling racket apparently organised by alleged crime kingpin Lai Changxing.

The Bank of China's disgraced former president, Wang Xuebing - now under investigation in Beijing - is at the centre of the allegations in the financial scandal as the inquiries, involving the bank's head office and local and overseas branches, cover the period he was at the helm.

The authoritative 21st Century Business Herald published a front-page report yesterday on the scandal that also included details of malpractices that led US and Chinese regulators to fine the bank's New York branch US$20 million (HK$156 million) this month.

Quoting an unnamed official from the National Audit Bureau, the newspaper said officials from two branches of the bank in Guangdong transferred the six billion yuan into overseas accounts over 10 years. The fraud was discovered in October.

The official said it was the biggest theft of money from a state bank since 1949. Dozens of senior bank officials are under investigation, among them senior executives from the two branches, in Kaiping and Jiangmen.