Link: https://www.icij.org/investigations/china-capital/about-china-capital-investigation-icbc/

Archived

[...]

• An investigation found officer at the Industrial and Commercial Bank of China (ICBC) in London acted at the direction of the bank’s Beijing headquarters to pursue explicitly political objectives for its majority shareholder, the Chinese state: cement alliances, acquire natural resources and expand control over communications, energy and transportation infrastructure globally. ICBC is the world’s largest bank by asset size.

• ICBC stepped up to help Russian mining giant Norilsk Nickel, aka Nornickel, a company partly owned by four sanctioned Russian oligarchs aligned with the Kremlin, to finance the firm in renminbi, the Chinese currency, to avoid U.S. dollar transactions, and applauding Nornickel’s idea of building a smelting plant in China to label their products Chinese.

• ICBC served clients linked to autocrats, oligarchs and Chinese companies with political connections. Among the clients: a bank owned by the daughters of Ilham Aliyev, Azerbaijan’s longtime authoritarian ruler; Angola’s state oil company, then controlled by cronies of dictator José Eduardo dos Santos; and a Chinese company that partnered with a Belarusian firm sanctioned by the European Union for its ties to Alexander Lukashenko’s regime.

• In 2019, after the U.S. Justice Department indicted Huawei, ICBC bankers were quickly transferring $1.3 billion in “emergency cash” for the tech giant. The transaction, while not illegal, triggered a wave of recriminations and infighting at the bank, particularly from its own financial crime prevention unit, which was not told about the move ahead of time.

• Since 2014, courts and regulators in eight jurisdictions have hit ICBC and its overseas branches and subsidiaries with adverse court rulings and penalties totalling at least $96 million. The confidential records also show that ICBC executives were aware of compliance issues at its units in the U.K. and other countries.

[...]

[The investigation] also lays bare what experts describe as the bank’s “muscular” lending tactics, which have burdened some of Africa’s most economically vulnerable states.

In 2011, the bank signed a loan with ZESCO, the Zambian state-owned power company, for $285 million. Seven years later, as the drought-stricken nation of 18 million was barreling toward sovereign default, ICBC came for its first payment of $20 million. This was just after ZESCO had paid the bank $15 million in “management fees” for a separate loan that “put some pressure on the company’s financial situation.” But the utility had little recourse; Zesco had already set up an account at ICBC London for the $285 million loan. Keen to collect the first payment, ICBC headquarters pushed officers in the U.K. to take the money out of Zesco’s account and send it to Beijing before ICBC London had completed the necessary checks on the client, as required by the bank’s compliance policy.

Few outside the bank and the government knew the extent of Zambia’s indebtedness to ICBC and other Chinese banks. The lack of transparency paralyzed debt relief efforts, triggering a financial crisis in 2020 that tanked the value of its currency and made daily staples unaffordable for an already impoverished population.

China Capital’s rare view of ICBC’s inner workings comes from the confidential archives of the bank’s London branch and a U.K. subsidiary, dated between 2005 and 2024 — a span when China ascended on the world stage and President Xi Jinping rose to power.

The trove includes reports marked as trade secrets; internal emails in English and Chinese; confidential dossiers and lists on more than 4,000 corporate clients; meeting minutes; suspicious transaction logs; and directives from the bank’s Communist Party committee, an internal cell that facilitates party activities and advances government policies.

[...]

The records highlight the hybrid nature of ICBC, a commercial bank that often appears to act like a development bank, contributing to China’s rise as the largest nondemocratic actor in global finance. The bank helped Chinese state firms secure lucrative contracts overseas, financing the acquisition of key transportation, energy and telecommunications infrastructure in foreign countries. Its clientele included companies and individuals accused of corruption, environmental violations, theft of trade secrets and harmful market practices by courts or regulators in other countries. ICBC also loaned millions to foreign state entities as a way to boost China’s alliances and economic power. As is the case for many other Chinese banks, though, ICBC’s lending activities have remained opaque.

[...]