Bank of East Asia facing questions over its anti-money laundering controls after 70 million yuan in transfers

The Bank of East Asia is facing questions over the robustness of its anti-money laundering procedures in mainland China following bank transactions leaked by the media on the weekend that purport to show the Hong Kong-based lender may have been used as a conduit to disburse large sums of money to senior executives at Shandong-based Evergrowing Bank.

Sources with knowledge of the case have confirmed that it has come to the attention of regulators and is currently under investigation by the China Anti-Money Laundering Monitoring & Analysis Centre, an agency under the People’s Bank of China.

“We are aware that this client has accounts with us and we have thoroughly followed the ‘Know-Your-Customer’ (KYC) procedures,” said Mimi Kam, a BEA spokeswoman in Hong Kong. “BEA employs top notch technology and systems for flagging potentially suspicious transactions.”

Kam said the bank has been aware of the case and has been “looking into it for a while”.

“We are following all due processes laid out under Chinese regulatory guidelines on anti-money laundering. But we are not familiar with the internal issues at Evergrowing Bank and will notbe in a position to comment further,” she said.

At the centre of the allegations reported in mainland media is a group of senior executives at the Yantai city government-controlled Evergrowing Bank who may have obtained some 70 million yuan (HK$81 million) worth of funds through BEA corporate creditcards.