How did Bank of China facilitate tax exemptions for private equity funds?

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Bank of China helped private equity funds get tax exemptions by reclassifying them as public funds through employee-paid packaging

Bank of China facilitated tax exemptions by enlisting its employees to contribute between one and 100 yuan each, which were then used to package 11 private equity funds as public funds. The National Audit Office said this reclassification allowed those funds to qualify for tax exemptions. The auditor also said some of the packaged funds were misappropriated to buy wealth management products and repay debt.
Employees were asked to contribute small amounts to fund the packaging
The National Audit Office reported that Bank of China enlisted employees to contribute between one and 100 yuan each. These contributions were used as part of the process to package financial products tied to 11 private equity funds.
The private equity funds were packaged as public funds
The audit said the bank packaged 11 private equity funds as public funds. This step was the mechanism described in the report for changing how the funds were treated for tax purposes.
Packaging as public funds was linked to qualifying for tax exemptions
The report stated that once the private equity funds were packaged as public funds, they qualified for tax exemptions. It framed this as the outcome of the packaging arrangement rather than a separate application process.
The audit also linked the arrangement to misuse of some funds
In the same findings, the auditor accused the bank of tax evasion and added that some of the funds were misappropriated. The report said the misappropriated funds were used to buy wealth management products and repay debt.

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How did Bank of China facilitate tax exemptions for private equity funds?

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