[The Epoch Times, June 9, 2022]In the past two months, strange things have happened in mainland China. Bank depositors lost their money, and it wasn’t a small amount. For us ordinary people, depositing money in the bank is both safe and convenient, so most people will choose to deposit money in the bank. But such ordinary deposits have caused troubles in Henan and Anhui.
On April 18 and 19, six rural banks in Henan and Anhui successively issued notices stating that due to the “system upgrade”, online banking and mobile banking services were suspended, resulting in many Internet deposit customers unable to withdraw cash, online and offline. There have been runs. According to media reports, the incident affected 400,000 users of seven banks, and the funds involved exceeded 40 billion yuan. And until now, the online business of these banks has not resumed, and the deposits of the users involved seem to “disappear out of thin air”.
Although the CCPChina Banking and Insurance Regulatory CommissionThere was a response to this on May 19, but the official statement was quite suspected of “shirking”, and it seemed that they wanted to put all the responsibility on one of the shareholders of these banks.Some netizens said that they blame themselves for being greedy when P2P exploded, blame themselves for being stupid when stocks lose, and blame themselves for lack of vision when funds fall, but the safestBank savingshow can it be so unreliable?
For this matter, we have also done a lot of homework, and found that the behind-the-scenes operation is really shocking. So, what kind of chaos does this incident reflect in China’s banking industry? Can banks still be trusted in China? What are the official measures? We’re going to talk about these topics today.
Deposits “disappeared out of thin air” What happened?
According to The Paper, among the 6 village banks involved, there are 4 in Henan and 2 in Anhui. Most of the affected depositors are from outside the province, mainly from economically developed areas such as Guangdong, Jiangsu, and Shandong. Two years ago, through Internet financial platforms such as Du Xiaoman and JD Finance, I purchased deposit products from relevant village and town banks. The annual interest rate of deposits ranged from 4.1% to 4.9%.
It is understood that these village banks are rural community banks in essence, mainly providing financial services for local farmers, agriculture and rural economic development. These small banks have limited ability to absorb depositors, but later, these banks have absorbed a large amount of deposits with the help of Internet platforms.
Since January 2021,China Banking and Insurance Regulatory CommissionAfter the Central Bank of China and the Communist Party of China issued a notice requiring commercial banks not to carry out fixed deposits and fixed-life dual-convenience deposits through non-self-operated online platforms, the relevant Internet platforms removed these products. However, most of these online depositors continue to operate through the channels of online banking and mobile banking through the bank’s WeChat applet or APP according to the prompts of the village banks.
But now, these online channels have been closed, and foreign depositors are not only unable to conduct online operations, but their account balances have also returned to zero. The hard-earned money was wasted like this, it was a feeling of wanting to cry without tears.
Who should be responsible for “shirk” by all parties?
So what does the bank say?
It is said that these village banks initially claimed to be “notices of system maintenance, when to restore, etc.”, and then denied any online cooperation with third-party Internet financial platforms, nor did they recognize the online deposits of the “Mobile Banking” applet, or even I also did not recognize the WeChat applet of “Mobile Banking”.
At present, these village banks still provide over-the-counter services, but only for local depositors, and the banks have also closed ATM withdrawals. It is said that the over-the-counter withdrawals of local depositors cannot exceed 50,000 yuan, and they cannot be withdrawn every day.
So, let’s look at what the Internet platform is saying?
According to the “Economic Observer” report, the customer service of Du Xiaoman, 360 platform, Tianxing Finance and other platforms all said that the platform signed a cooperation agreement directly with the bank, the cooperation procedures are compliant, and the responsibilities of all parties are clearly divided. The platform also did due diligence before cooperating with village banks. Therefore, some people from third-party platforms speculate, “The money that users enter into the bank is real, and it comes from the real system. Otherwise, the user cannot open a second-class account, but after entering the bank, someone may have made some fake system. , and transferred the money away.”
So, what is the attitude of the CCP’s regulatory agencies?
According to “Securities Daily”, the person in charge of the relevant departments of the China Banking and Insurance Regulatory Commission has characterized the incident as: the shareholders of 4 village banks “Henan”New Fortune Group“Through internal and external collusion, the use of third-party platforms and fund brokers to absorb public funds, suspected of illegal crimes, the public security organs have opened a case for investigation.
As for whether these depositors can recover their deposits, the China Banking and Insurance Regulatory Commission did not say, but only vaguely stated that “all businesses handled in accordance with laws and regulations are protected by national laws”, but at the same time reminded the majority of financial consumers. Choose formal channels for business, do not be misled by false propaganda such as “high interest” and “high yield”, and do not easily entrust funds to a third party to prevent being deceived. It sounds like there is something in this sentence that means that the money was taken away by someone, and the government and the bank can’t do anything about it, so consider yourself unfortunate.
Therefore, after this official statement came out, not only did it fail to appease the hearts of the people, but it made the depositors involved even more anxious. not to mention,Bank savingsIt is different from wealth management products, and the interest rate is just a little higher. If it is said that the depositors are greedy, it is better to say that the official is going to “shirk” again.
According to China’s “Regulations on Deposit Insurance”, commercial banks should take out deposit insurance as required, and depositors can receive a maximum reimbursement of 500,000 yuan from the insurance fund.
However, according to the official statement, these deposits did not enter the bank’s account, but were transferred to the bank’s shareholder “Henan”New Fortune Group“The account under his control has disappeared. Does this mean that the bank did not receive the money, so it does not need to be responsible for the money, let alone pay for it with deposit insurance?
In particular, the Henan New Wealth Group, which was officially mentioned, was cancelled on February 10 this year. And Lu Yi, the actual controller of this group, is said to have long gone to the United States.
Who is behind the new wealth group?
Let’s take a look at this new wealth group. What is the origin? According to media reports, Lu Yi, the actual controller of Henan New Fortune Group, was born in 1974, his nationality is Cyprus, and he claims to be the investment representative of Liberia’s business in China.
We also found on the Internet that on September 26, 2003, the foundation stone was laid for the Lanwei Expressway from Lankao to Shenqiu in Henan. The actual controller behind the construction of Fang Lanwei Expressway Development Co., Ltd. was Lu Yi. This 61-kilometer expressway has a total investment of 2.4 billion yuan. As a result, Lu Yi has also obtained the right to charge the highway for 30 years.
However, one thing is puzzling. How can a national key high-speed construction project be easily handed over to a private enterprise? Later, everyone figured out that Lu Yi also mortgaged the right to charge the expressway to the bank, and then got the funds for the road repair, playing a trick of “empty gloves and white wolves”.
It is said that shortly after the construction of Lanwei Expressway, Lu Yi began to take shares in banks, and established Henan New Fortune Group in 2011, focusing on taking shares in local banks in Henan.
It is understood that in addition to the above-mentioned village banks, this new wealth group also holds the equity of Luoyang Bank, Hebei Bank and other rural commercial banks and village banks, penetrated at least 13 banks, and also through the transactions of banks and affiliated companies, through Guangzhou. Rural Commercial Bank and Bohai Trust, transferring huge amounts of money.
In addition, Qiao Junan, vice president of Zhengzhou Bank, was sentenced in 2018 for granting loans to Lu Yi and accepting bribes. Cai Guohua, the former chairman of Hengfeng Bank, was sacked in 2020, but Lu Yi himself was safe and sound. Until February of this year, Cai Esheng, vice chairman of the China Banking Regulatory Commission, was also arrested for accepting bribes, and Lu Yi was also investigated. However, after he came out, he fled to the United States. A few months later, village banks in Henan began to explode, which is what we are seeing now.
However, where did the new wealth group and Lu Yi come from, and the story behind this really makes people imagine.
The chaos of shareholders behind village banks
We see that the chaos behind these banks goes far beyond that.
According to The Paper, Xuchang Rural Commercial Bank was the initiator and major shareholder of the 6 rural banks that shut down their online capital business this time, except for Kaifeng New Oriental Village Bank.
According to media reports, Xuchang Investment Group, which is 100% controlled by the Xuchang Municipal Finance Bureau, disclosed in its rating report on April 25 that the group actually controlled Xuchang Rural Commercial Bank through its subsidiaries, with a stake of 9.90%. Ranked the largest shareholder and consolidated it into the consolidated financial statements.
However, on May 25, Xuchang Investment Group issued a clarification announcement on the China Bond Information Network, leaving its responsibilities completely. The announcement stated: 1. Xuchang Rural Commercial Bank is a shareholder of five village banks, but these five village banks are independent legal entities and operate independently, and Xuchang Rural Commercial Bank does not actually control their operation and management. 2. There is no equity investment, capital exchange or business cooperation relationship between the company and New Fortune Group.
The Paper reported that the registered capital of Xuchang Rural Commercial Bank is 1 billion yuan, and there are 73 existing shareholders, but 25 of them have been listed as dishonest persons subject to execution. According to a report by China Business News in November 2021, nearly 770 million shares of Xuchang Rural Commercial Bank have been pledged. Some actual shareholders of the pledged equity are not in the list of shareholders registered with the industry and commerce, but become “invisible” shareholders through holding on behalf of others.
In addition, since 2017, the subscription amount and paid-in amount of a large number of shareholders have dropped to zero. Xuchang Rural Commercial Bank shows that the registered capital is 1 billion yuan, but the total paid-in amount in the 2021 annual report is less than 60 million yuan.
In March of this year, the Xuchang City Public Security Bureau also issued a notice offering a reward of 100,000 yuan for the fugitive former vice president of Xuchang Rural Commercial Bank, Sun Zhenfu. As for whether Sun Zhenfu’s alleged “serious economic crime” is related to the explosion of village banks, the police have not publicly stated.
Innocent savers fall victim
From the facts we mentioned just now, we can see that the fundamental reason for the chaos in China’s banking industry is the lack of supervision. But banks are breaking the law, and innocent depositors have become victims.
It was a disaster for the vast number of depositors. They actually signed the deposit contract online and went through the account opening procedures. It is the official account of the bank that sends them information, and the WeChat mini-program for doing business has also passed the WeChat theme qualification certification. Moreover, these banks are regular troops with formal licenses. From the perspective of customers, of course, they will recognize that this is a real bank and a real deposit.
Should ordinary people open a savings account without researching the bank’s shareholder structure and internal capital flow to determine whether to open an account? This is clearly what regulators should do. Therefore, in my opinion, even if the bank is defrauded, it is because the bank itself has loopholes, and it cannot shirk its responsibility to the depositors.
But for such an obvious reason, the official rhetoric seems to be playing Tai Chi, and there is an attitude of unwillingness to take responsibility between the vague words. Therefore, it has to be doubted whether there is collusion between officials and businessmen behind this. If you follow this line of thinking, things may become more and more troublesome, and maybe the fire will burn on someone, so it is natural to find a scapegoat and push the blame.
What is even more frightening is that the situation of rural banks in Henan and Anhui may only be the tip of the iceberg, and the unfortunate people will always be the Chinese people.
Institute of Financial and Commercial Economics
Planning: Yu Wenming
Written by: Li Songyun
Consultant: Li Tingqian
Editor: Yu Wenming
Producer: Li Songyun
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