The Bank of China, one of China's "big four" lenders, has been caught in a massive tax evasion scandal. The bank allegedly evaded paying 2.4 billion yuan ($352 million) in tax between April 2023 and August 2025, according to the National Audit Office.
The bank's employees were enlisted to contribute between one and 100 yuan each to package 11 private equity funds as public funds, allowing them to qualify for tax exemptions. This clever scheme allowed the bank to sidestep its tax obligations, with some funds even misappropriated to buy wealth management products and repay debt.
Agricultural Bank of China, another "big four" institution, was also accused of issuing 11 billion yuan in illegal loans to farmland projects between December 2021 and August 2025. Some of these funds were also misused to purchase wealth management products and repay debt.
The National Audit Office has called out China Everbright Group, a state-backed financial firm, for management failings. The group lacked control over several of its subsidiaries and failed to properly manage its Everbright brand, leaving it vulnerable to abuse.
As news of the scandal spreads, social media users are expressing outrage and calling for accountability. "Whose pockets did the stolen tax go into?" one user asked, while others demanded that the banks recover the lost funds.
The Chinese government has promised to take action, with the Bank of China stating that it "sincerely accepts the audit supervision" and has vowed to improve its compliance capabilities.
The implications of this scandal are far-reaching, with the Chinese government facing pressure to rein in the country's sprawling state-owned financial sector. The incident serves as a stark reminder of the need for greater transparency and accountability in China's financial institutions.
"Whose pockets did the stolen tax go into?" a social media user asked, as others demanded that the banks recover the lost funds.
The Bank of China is one of the largest financial institutions in the world, with trillions of dollars in assets under its management. The fact that it was allegedly able to evade billions in tax and issue illegal loans is a stark reminder of the need for greater oversight and accountability.
The scandal also raises questions about the role of China's state-owned enterprises in the country's financial sector. With the government holding a majority stake in these institutions, they are seen as extensions of the state itself. This raises concerns about the potential for cronyism and corruption.
As China continues to grapple with the implications of this scandal, one thing is clear: the nation's financial sector is in need of significant reforms to prevent similar incidents in the future.