Latest economy, stock market and Twitter news for July 11, 2022

HONG KONG – A financial scandal in central China has affected depositors across the country, some of whom placed their life savings in four rural banks that offered high rates of return, only to find their funds frozen. as investigators looked into allegations of widespread fraud.

The city backed down after a backlash, and several officials were punished. But the depositors kept coming, with up to a thousand gathered on Sunday.

This time the authorities sent guards en masse to break up the demonstration. They beat the protesters, throwing them to the ground and throwing them into buses, the harshest response yet to bank depositors’ efforts to demand redress.

Photos and video of plainclothes security officers attacking protesters were shared on Chinese social media, sparking anger over the use of force. While protest images are often quickly censored in China, images from Zhengzhou were still widely available on Monday, with one hashtag viewed 32 million times on Weibo, the Twitter-like service.

Protesters had gathered outside the Zhengzhou branch of the nation’s central bank, the People’s Bank of China. Protesters interviewed by phone said dozens of people had been sent to hospitals after being beaten.

“We came all the way to Zhengzhou to get our money back, and we didn’t want to have conflicts with anyone,” said Feng Tianyu, 31, who lives in the northern city of Harbin. “But the government sent a lot of people to deal with the unarmed people. They cheated us financially, beat us physically and traumatized us mentally.”

Ms. Feng, who is two months pregnant, said men dressed in white shirts pulled her by the hair and arms onto a bus, where police officers beat some of the protesters. She said she was eventually taken to a hospital for stomach pains, but was refused admission.

Depositors say they are trying to recover the money they placed in rural banks through third-party online platforms. The money has been frozen since April, when police and banking regulators said they were investigating allegations of illegal financial activity.

Depositors across the country have been trying to claim their money in person, even as authorities have repeatedly shut down their courier groups and tried to prevent them from traveling.

While the protests remain centered on four rural banks, all in Henan province, China’s broader economic slowdown and the growing impact of the Covid lockdowns could expose more institutions and test the insurance mechanism of relatively new deposits in the country.

Deposits in China are guaranteed up to 500,000 Chinese yuan, about $74,500, but many Henan bank customers deposited much more. If the Henan government determines that their deposits were part of an illegal fundraising scheme, it could complicate any efforts to recover their money.

Many of the protesters said they put their life savings in the banks and now find themselves in poverty. Ms. Feng said she deposited about $165,000, which was all her savings plus her father’s pension money.

“I’m pregnant and I’ve come this far because this money is very important to me,” she said. “If I don’t get my money back, I can’t get prenatal checkups, I can’t have this child, and I can’t continue to support my 2-year-old daughter.”

After reports of the protest emerged on Chinese social media, banking regulators in Henan said on Sunday they were developing a plan to manage the crisis affecting the four banks and to “protect the public’s legitimate rights and interests”. but did not offer immediate details. .

The China Banking and Insurance Regulatory Commission has accused Henan New Fortune Group, a shareholder of the four banks, of illegally using third-party platforms and fund brokers to attract depositors from across the country, state media reported in the ‘April. The national regulator warned customers against being lured by promises of extremely high returns or hastily making bank deposits through third parties.

Police in the Henan city of Xuchang said Monday they were investigating a criminal gang led by a man named Lu Yi, who they say may have used Henan New Fortune Group to amass control of rural banks and use fictitious loans to transfer il· legally background The scheme, which police said began in 2011, involved creating online platforms to promote financial products and solicit new customers, according to police, who added that some people have been arrested.

But several protesters said they felt police and regulators had done too little to protect their interests and worried they would never see their money. Some, noting that the alleged financial misconduct dates back more than a decade, raised questions about whether authorities had ignored earlier signs of fraud. Public pressure is now their only recourse, protesters said in interviews.

“A single person is really too powerless; we only attract the government’s attention when we all get together,” said Zhang Xia, 38, an administrative assistant in the eastern city of Hangzhou.

Ms. Zhang said she was grabbed by the arms and legs and kicked in the stomach as she was taken away from the protest site. After a brief visit to the hospital, she quickly left the city because she was afraid of being arrested in Zhengzhou, boarding a train on crutches.

“We just came to make a statement about fairness, nothing more,” he said. “These brutal beatings and repression took us by surprise.”

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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!