Five ICBC bank directors arrested in Madrid

MADRID • Spanish police have arrested five directors of Industrial and Commercial Bank of China (ICBC) after they raided the lender's Madrid offices as part of an investigation into alleged money laundering.

China's large state-owned lenders have been dogged by allegations of improper conduct as they expand abroad. Meanwhile, the probe into ICBC by the police, the Spanish tax agency and Europol involves funds handled by a criminal group which the Interior Ministry said passed through the bank and were transferred to China.

Over 100 police officers were involved in the operation, which saw the arrest of the five directors, Europol said on Wednesday.

A Beijing-based spokesman for ICBC, China's largest bank in terms of assets, said its Madrid branch was cooperating with the investigation. "Strictly implementing anti-money laundering regulations, and strictly operating within the law and regulations have always been our fundamental operation and management principles," the spokesman added.

The Chinese embassy in Spain said it currently has no reason to believe ICBC had been breaking the law, adding that it has not received official notification about the case from the Spanish authorities.

At a briefing, Chinese Foreign Ministry spokesman Hong Lei said the government hoped Spain handled the situation "justly and according to the law, effectively guaranteeing the legal rights and interests of Chinese organisations and personnel".

The probe into ICBC follows a slew of allegations of money laundering levied against other Chinese banks. Last June, prosecutors in Italy asked Bank of China's Milan branch to be tried for smuggling, among other alleged crimes, and a month later, the US Federal Reserve told China Construction Bank to address deficiencies in its money laundering compliance.

Such probes could mar the reputations of these banks as they expand abroad, primarily to cater to the growing presence of Chinese firms, bankers at overseas branches of the lenders said.

Analysts, however, said Chinese banks are not necessarily the worst offenders when compared with their global peers. Mr Mark Wightman, a partner in the wealth and asset management at Ernst & Young, said: "Which firms have been fined the most in terms of anti-money laundering, you wouldn't find the Chinese banks near the top of that list, although some have been asked to tighten procedures."


A version of this article appeared in the print edition of The Straits Times on February 20, 2016, with the headline 'Five ICBC bank directors arrested in Madrid'. Subscribe