Thursday, September 29, 2022

Provincial Banking Scam: China announces arrests of 234 people in connection

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Local media reported on Monday that 234 suspects had been detained by Chinese police in connection with the financial crisis involving a number of rural banks in Henan province.

According to Xuchang municipal police, significant success has been achieved in recouping lost funds and capital. Early on July 10, more than a thousand depositors gathered in front of the People’s Bank of China branch in Zhengzhou to commence their biggest demonstration to yet.

The occurrence occurs in light of the Bank of China’s Henan branch’s declaration that customer funds are “investment products” and cannot be withdrawn, as reported in the media.

Yuzhou Xinminsheng Village Bank was one of four rural banks that the criminal gang led by the suspect Lyu Yi was determined to have unlawfully controlled, according to the public security bureau of Xuchang’s investigation. The group is also accused of committing a number of significant crimes.

According to the authorities, criminal gang utilised some of the money it had gotten unlawfully in addition to the regular deposit interest to lure in more money with an annual rate of return of 13 to 18% as bait for a “interest subsidy” standard, according to China Daily.

Layer after layer, the money brokers abused the “interest subsidy,” which certain large fund customers were able to receive.

According to the police, inquiry is being conducted in compliance with the law.

Four rural banks in Henan ceased their internet services as of April 18, preventing consumers from accessing their money. This swiftly sparked criticism.

After several consumers claimed that their health codes had turned red for allegedly unrelated, non-epidemic-related causes, the financial scam has caused more public outrage over the past few months. End of June saw the punishment of five individuals, including four Henan officials, for misusing their authority by altering the colour of the codes.

According to a prior investigation made public by the Xuchang police, the organisation led by Lyu has been utilising numerous rural banks since 2011 to engage in criminal activity.

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