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Executive says money laundered through Las Vegas

Friday, March 15, 2002 | 9:42 a.m.

Bank of China, which is trying to sell shares abroad, is chasing five executives who it says stole $483 million, one of a series of fraud cases that its chairman blamed on "a decade of lax management."

Liu Mingkang, who took over management at the nation's second-biggest lender in 2000, said officials at its Kaiping branch laundered money through Las Vegas and Macau and used fake passports to flee. In a separate case, the Chongqing branch's deputy general manager hanged himself after the bank queried spiraling bad loans.

"We found that the bank lacked integrity, discipline and compliance in its lending policies and management," Liu said in an hour-long interview with foreign journalists in the bank's new I.M. Pei-designed headquarters in Beijing. "It is our duty to clean up the mess."

The remarks were Liu's first detailed response to fraud allegations that led some bankers to suggest the bank may scrap the U.S. portion of a planned $5 billion share sale, for which it hired Goldman Sachs Group Inc. and UBS Warburg as advisers.

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