PostedAugust 30, 2022, 08:54
ChineBig crackdown following a vast banking scam
Chinese police have arrested more than 200 people in connection with one of the biggest banking scandals in the country’s history.
Illustrative image: A police officer outside the US Embassy in Beijing, China on August 4, 2022.
REUTERS
Chinese police have announced the arrest of more than 200 suspects linked to one of the biggest banking scandals in the country’s history, which had given rise to demonstrations of a rare scale. Four rural banks in Henan province (center) suspended all money withdrawals in April, catching thousands of small savers unawares. This situation had given rise to sporadic demonstrations, one of the largest of which took place in July in Zhengzhou – regarding 600 kilometers south of Beijing. In the process, the authorities announced the arrest of people belonging, according to them, to a criminal organization. Accused of controlling several local banks since 2011, the group made illegal transfers through fictitious loans, the authorities said at the time.
Criminal organization
On Monday, local police in Xuchang reported 234 people formally arrested in connection with the scam. “Significant progress” has also been made in recovering the misappropriated funds, she said in a statement. Since last month, aggrieved depositors have been gradually getting their money back. The authorities pledged to repay them in stages, starting with those with the least savings.
The banking sector in rural areas in China is being hit hard by central government policy to contain the housing bubble and indebtedness in the world’s second-largest economy. Henan’s banks in turmoil are part of a larger set of small banking institutions affected by liquidity and management problems. Gathered peacefully in July, aggrieved savers were violently dispersed by individuals in civilian clothes, during an unusual gathering in China of several hundred people. The protesters, who demanded to recover their money, notably accused the authorities of inaction, even of collusion with these banks.
Authorities already pinned
In June, the Henan authorities found themselves under fire from critics following an alleged manipulation of health passes to turn them red, and thus prevent participants from going to a demonstration. The health pass is required in China to access the vast majority of buildings, shopping centers, public places but also certain transport. A red pass is de facto equivalent to a travel ban and quarantine.
(AFP)
