Auditor: $13.8b in misdirected funds recovered in 2009

China recovered more than US$13.82 billion in misdirected public funds last year, state media reported. More than 790 people were imprisoned in connection with misuse of public money, mostly in project approval, decision making, loan granting, and public bidding and tender in financial transactions, transfer of state assets and management of land and mineral resources, said Liu Jiayi, China’s chief auditor. He said online banking transfers, cheating on loans and insider trading of stocks were favorite methods for profiting illegally. At least part of the rise of China’s stock and property markets in 2009 has been attributed to misdirected stimulus funds and bank loans being used for investment. Liu said that China’s local governments accumulated debts of US$410 billion in 2009 as they splurged on infrastructure.