China's top auditor says major state banks have committed tax evasion or lending violations

Bank of China

25/06/2026 08:42

BEIJING, June 25 (Reuters) - China's top audit body has identified some of the country's biggest state-owned financial institutions as having evaded tax or having lax loan oversight, underscoring Beijing's intensified scrutiny amid fiscal pressures.
The National Audit Office said Bank of China 601988.SS, 3988.HK was found to have evaded 2.37 billion yuan ($348.36 million) in taxes by disguising private equity funds as public ones to claim tax exemptions, according to an annual work report released by the watchdog on Tuesday.
From April 2023 to August 2025, the state-owned lender used two subsidiaries to package 11 private funds as public funds by padding investor lists with bank employees contributing as little as one yuan each, exploiting tax exemptions for public funds, the watchdog said.
The move comes as China's local governments face acute revenue shortages following a prolonged property downturn, prompting Beijing to ramp up tax enforcement efforts targeting both corporations and high-income individuals.
Agricultural Bank of China 1288.HK 601288.SS, designated to serve rural areas, improperly issued 11.07 billion yuan  ($1.63 billion) in loans to non-compliant farmland projects between December 2021 and August 2025 due to inadequate pre-loan reviews, with some funds diverted to wealth management products and debt repayment, the report said.
China Everbright Group also was found to have weak oversight of subsidiaries and unauthorized use of its brand name, it said.
None of Bank of China, Agricultural Bank of China and China Everbright Group immediately replied to requests for comment.
($1 = 6.8034 Chinese yuan renminbi)

 (Reporting by Beijing Newsroom; Editing by Alison Williams)