Shares of some Chinese state-owned banks plunged after China's state auditor accused Bank of China (3988) of evading 2.4 billion yuan in taxes over the past few years.
By packaging 11 private funds into public funds, the lender exploited the preferential income tax exemption policy for public funds to evade 2.37 billion yuan in taxes between April 2023 and August 2025, the auditor said in a report on Tuesday.
The bank brought in a large number of its own employees and others, each investing between 1 and 100 yuan through two affiliated financial institutions, simply to “make up the numbers,” the report said.
It also revealed that the Agricultural Bank of China (1288) exercised lax pre-loan scrutiny, issuing 11.1 billion yuan in loans to non-high-standard farmland projects between December 2021 and August 2025, with some of the funds being misappropriated to purchase wealth management products, repay debts, and for other purposes.
China Everbright Group is also accused of failing to control decision-making power over subsidiaries and exerting weak management over directly managed subsidiaries.
Bank of China declined 5.9 percent on Thursday, while the Agricultural Bank also lost 3.9 percent.
