A Standard Chartered banker has been detained by police in China
Highlights the risks for foreign bankers involved in wealth management in China
A Standard Chartered banker has been detained by police in China as part of an investigation into a wealthy client who allegedly stole money from a state-owned bank.
Wu Yidian Eden, a naturalised Singaporean citizen, had been asked over the past two months to co-operate with police enquiries about a StanChart client who allegedly stole a large sum from a Chinese bank and fled the country, according to her fiancé, Jason Tan.
The detention, which UK-based StanChart confirmed, highlights the risks for foreign bankers involved in wealth management in China, where the source of vast personal fortunes is often shrouded in mystery.
StanChart said the bank itself was not under investigation. It declined to comment on the detention because of the investigation. Ms Wu had been working in private banking for StanChart in Shanghai.
Ms Wu and Mr Tan were due to marry later this month in Singapore. When Ms Wu notified the police last week that she would be leaving the country for the wedding, she was asked to come to the station one more time. Mr Tan said she has been held since then without charge.
Mr Tan said his fiance “was under investigation for harbouring a fugitive – the fugitive being the bank thief, and her harbouring was withholding information from the police that could be used to find him”.
Foreign banks, which are struggling to gain a foothold in China, have targeted private wealth management as a business focus, trying to tap into the swelling ranks of the country’s ultra-rich.
Bain and Company, the consultants, and China Merchants Bank have previously projected that the number of Chinese with at least Rmb10m ($1.6m) in individual assets would rise to 585,000 last year, nearly twice as many as in 2008.
The vast majority of those assets are held within China and managed by domestic institutions. But many wealthy Chinese are looking to invest more of their money abroad and have been turning to foreign banks.
Managing this money, though potentially lucrative, is also fraught with dangers for foreign banks. Executives of state-owned corporations have low official salaries, raising questions about the path to riches for those who have amassed large fortunes. A study by the China Reform Foundation, a research institute, found in 2010 that Chinese households hide as much as Rmb9.3tn in income, much of it “illegal or quasi-illegal”.
Tight capital controls also make it difficult to transfer money outside of China. The central bank published a report last year in which it said that corrupt officials had managed to send about Rmb800bn out of the country since the mid-1990s, often giving the funds to relatives or friends already living abroad.
In Ms Wu’s case, the StanChart client was allegedly an executive from an Agricultural Bank of China branch in Jiangyin, a city in Jiangsu province near Shanghai. AgBank declined to comment.
Jiangsu, a hotbed of private entrepreneurs, has one of the country’s biggest concentrations of wealthy individuals.