Bank of China has unveiled details of its damaging Guangdong loan scandal and affirmed its determination to float its Hong Kong unit globally. President Liu Mingkang said yesterday five officials of the bank's sub-branch in Kaiping, Guangdong, stole at least US$483 million between 1993 and 2000 and had fled. Mr Liu gave the bank's first account of the scandal, first reported in a weekly newspaper at the end of January. The report said the bank officers had stolen more than six billion yuan (about HK$5.66 billion) over 10 years and that three had escaped to Canada, where they were being investigated by local authorities. Mr Liu said the bank discovered the scandal last year when it was consolidating its information-technology centres from 1,040 to 33 worldwide, including putting all Guangdong operations into a single centre at Guangzhou. 'We found a huge gap between the data and the accounting books,' he said. 'We kept digging and narrowed the source to Kaiping. We sent a team there to investigate. The five people involved, led by Xu Chaofan, had dozens of passports and ran away. They are still at large.' Mr Liu said some of the missing money had been lent to factories and much of it had been sent via Hong Kong, Macau, Las Vegas and other places. 'The investigation is still going on. The final loss could be higher,' he said. International co-operation in the investigation had been very good, he said, due in part to the September 11 terrorist attack on the World Trade Centre in New York. The affair came to light on October 12 last year, giving it the name of the '10/12 case'. In January, a report by the Auditor General said that it had found 22 other cases of fraud and malpractice at the bank involving 2.7 billion yuan and 35 officers, and that the cases had been turned over to prosecutors. Mr Liu singled out the bank's Chongqing branch as another with serious problems, but not embezzlement. 'The rate of non-performing loans was very high, resulting in huge losses,' he said. 'One deputy manager hanged himself, another manager was fired and a third was sent to jail. There was no due diligence.' Despite its problems, Mr Liu said the bank had not ruled out the United States for a listing of its Hong Kong operations. He said the bank had received approval to list Bank of China (Hong Kong) and was determined to do so, but for legal reasons he could not talk about the time, place or size. Premier Zhu Rongji, speaking to the media yesterday at the end of the annual two-week session of the National People's Congress, said the Bank of China's woes would not affect listing plans. 'I believe problems happen in some individual bank branches and they will not affect the goal of domestic and overseas listings by Chinese banks,' Mr Zhu said. An 18-month investigation by the US Office of the Comptroller of the Currency found the Bank of China guilty of misconduct at its New York branch. The bank was fined US$20 million in January. Asked to comment on newspaper reports that the bank had abandoned a possible listing in the US because of the fine, Mr Liu said it was incorrect to say it had forgotten the US market. In Beijing, foreign bankers said the bank had faced a barrage of questions from the US Securities and Exchange Commission over the practices at its US operations and had answered them. They said the bank was still aiming for a dual listing in Hong Kong and New York, probably for less than its original target of US$4 billion to US$5 billion. Mr Liu offered reporters a briefing similar to that he and his senior managers were giving to analysts, investors and underwriters. He said his arrival as president in February 2000 marked a clean break with the regime of former president Wang Xuebing, who is under investigation for malpractices, including those at the New York branch.