Security forces in China attack protesters seeking frozen funds

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Security forces in China attack protesters seeking frozen funds
Security forces in China attack protesters seeking frozen funds

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HONG KONG — A financial scandal in central China has affected depositors across the country, some of whom put their savings in four rural banks offering high rates of return only to find their funds frozen as investigators probe allegations of widespread fraud.

When the bank’s customers started turning up in person to claim their money, authorities in Zhengzhou city tried to use health code applications designed to prevent the spread of Covid-19 to prevent them from traveling.

The city backed down after a backlash and several employees were disciplined. But the depositors kept coming, reaching a thousand on Sunday.

This time, the authorities sent mass security to break up the demonstration. They beat protesters, kicking them to the ground and pushing them into buses – the harshest response yet to bank depositors’ efforts to seek redress.

Photos and videos of plainclothes security agents attacking protesters were shared on Chinese social media, sparking outrage at the use of force. Although images of protests are often quickly censored in China, footage from Zhengzhou was 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 country’s central bank, the People’s Bank of China. Protesters interviewed by phone said dozens of people were sent to local 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 so many people to deal with the unarmed people. We were defrauded financially, beaten physically and traumatized mentally.”

Ms. Feng, who is two months pregnant, said men wearing white shirts pulled her by the hair and hands on a bus where some of the demonstrators were police officers. She said she was eventually taken to hospital for stomach pains but was refused admission.

Depositors say they are trying to get back the money they put in rural banks using 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 from across the country tried to go claim their money in person, although authorities repeatedly shut down their message groups and tried to prevent them from traveling.

While the protests remain centered around four rural banks, all in Henan province, China’s broader economic slowdown and the widening impact of the Covid lockdown could potentially expose more institutions and test the country’s relatively new deposit insurance mechanism .

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

Many of the protesters said they had deposited their savings in banks and were now deprived. Ms. Feng said she deposited about $165,000, which was all her savings plus money from her father’s pension.

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

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

The China Banking and Insurance Regulatory Commission accused Henan New Fortune Group, a shareholder in the four banks, of illegally using third-party platforms and stock brokers to lure depositors from across the country, state media reported in April. The national regulator has warned customers not to be fooled by promises of extremely high returns or to make hasty bank deposits through third parties.

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

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

“A man is indeed too powerless; we only attract the government’s attention when we all come together,” said Zhang Xia, 38, an administrative assistant from 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 feared detention in Zhengzhou, boarding a train on crutches.

“We only came to make a statement about justice, nothing else,” she said. “These brutal beatings and repressions took us by surprise.”

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