China’s cash crisis culprit named by police, said to have run powerful criminal gang since 2011
- Banking crisis in Henan and Anhui provinces has left thousands of China’s rural residents cut off from their savings for months, sparking protests and a violent response
- Suspect and his criminal gang proliferated since 2011, and the financial fallout threatens to undermine China’s social stability and public order
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Victims of one of China’s worst financial scandals attacked by unidentified men in white at protest
The dire situation has highlighted the financial risks facing lenders and savers in China’s less-developed regions, and the underlying threat this poses to public order.
After months of lamenting from the masses of anguished savers unable to withdraw cash from their accounts at small banks in Henan and Anhui provinces, authorities with the Xuchang Public Security Bureau in Henan said their investigation into the crisis was “progressing in an orderly manner”, and they identified a man still being sought by police.
“It is now further confirmed that, since 2011, a criminal gang led by the criminal suspect Lu Yi has used the Henan Xincaifu Group to have effectively controlled several rural banks, by ways of cross-shareholding, increasing capital and shares, and manipulating bank executives, among other means,” Xuchang police said in a statement on Sunday.
Police added that the gang also used third-party online financial platforms, its own platform, and a number of capital brokers to attract deposits and promote financial products.
