Economy

Markets

Industries

Insights

Reports

Events

Bank official detained in private lending scam probe

(Xinhua)
Updated: 2009-05-22 15:42

A bank official is in police custody for her alleged leading role in a private lending scam, involving at least 165 million yuan ($24.3 million), according to police in Fuyang city, eastern China's Anhui province, Thursday.

Li Qun, a branch head in Fuyang subsidiary bank under the Agricultural Bank of China, has confessed to have begun illegal private lending in 1989, said Wang Dongxi, deputy director of the Fuyang Public Security Bureau.

Accompanied by her husband and brother, Li, gave herself up to the police on May 1, said Wang.

Related readings:  Director arrested in bank scam  Wealth from power  Tighter spreads hurt bank profit  More loans but fewer profits for top banks

Li, 45, confessed to have lured people to lend money to her with forged bank documents and seals, and promised higher interest rates in return.

The police found that as of April 30, about 300 million yuan had been transferred from accounts associated with Li Qun to eight enterprises in Fuyang, as cash deposit for opening bills.

Initial investigation has shown that before May 17, 28 people came to the police bureau register creditors' rights over IOU (I owe you) involving 165 million yuan given by Li.

The police only had written proof for the 165 million yuan as of Thursday, said Wang.

"Many people, including me, are willing to lend money to Li, because of her family background," said Xu Yang, Li's friend. Xu lent 7.6 million yuan to Li, of which 6.8 million yuan is yet to be returned.

Xu said that Li's husband, brother, father, and brothers-in-law are all local officials in Fuyang, and Li's regarded as an influential woman in the city.

Li's husband Qi De'an, deputy head of the publicity department of the Communist Party of China (CPC) Fuyang city committee, was suspended from duty, said the committee Thursday.

The committee also said that three civil servants were involved in the scam, but didn't say whether Qi was one of them.

Further investigation is still under way.