BEIJING - POLICE in south China have arrested 11 people and smashed a money-laundering operation that sent 10 billion yuan (S$2.1 billion) of criminal cash abroad, state media reported on Monday.

Eight of the 11 were from Vietnam, which is where most of the money was transferred to, Xinhua news agency said, citing police in the Guangxi region which borders Vietnam.

Operating as an underground bank, the gang opened legitimate accounts at banks across southern China to launder money and transfer it abroad for a fee.

Records of 77 accounts opened by Ruan Zhizhong, a Chinese leader of the gang, allegedly show he alone illegally transferred 7.2 billion yuan abroad between November 2004 and March 2008, Xinhua said.

Eight of the 11 people arrested were Vietnamese, who operated in the southern region of Guangxi, which borders Vietnam, Xinhua news agency said.

Beijing has pledged to crack down harder on illegal capital flows across its borders.

Two years ago, Chinese Premier Wen Jiabao warned that illegal fund flows could harm the country's financial stability. --AFP, Reuters

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