HONG KONG – A financial scandal in Central China has hit savers across the country. Some of them placed their savings in four high-yield banks nationwide, only to have their funds frozen as investigators investigated allegations of widespread fraud.
The city withdrew after a backlash, and several officials were punished. But the savers kept coming, with as many as a thousand gathering on Sunday.
This time, the authorities sent en masse guards to break up the demonstration. They beat the protesters, kicked them to the ground and pushed them into buses – the harshest response yet to the bank depositors’ attempts to redress.
Photos and videos of plainclothes security officers attacking the protesters were shared on Chinese social media, sparking anger over the use of force. While protest images in China are often quickly censored, images from Zhengzhou were still widely available Monday, with a hashtag seen 32 million times on Weibo, the Twitter-like service.
The 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 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 argue with anyone,” said Feng Tianyu, 31, who lives in the northern city of Harbin. “But the government has sent so many people to deal with the unarmed people. We were financially cheated, physically beaten and mentally traumatized.”
Ms. Feng, who is two months pregnant, said men dressed in white shirts pulled her hair and arms on a bus where police officers beat some protesters. She said she was eventually taken to a hospital for abdominal pain, but was denied entry.
The depositors say they are trying to get back the money they have placed in banks nationwide 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 across the country have tried to claim their money in person, even as authorities have repeatedly closed their message groups and tried to block them from travel.
While protests continue to target four rural banks, all in Henan province, China’s wider economic slowdown and the increasing impact of Covid lockdowns could potentially expose more institutions and test the country’s relatively new deposit-guarantee mechanism.
Deposits in China are guaranteed up to 500,000 Chinese Yuan, about $74,500, but many customers of the Henan banks have deposited much more. If the government of Henan finds that their deposits were part of an illegal fundraising effort, it would complicate efforts to get their money back.
Many of the protesters said they had put their savings in the bank and are now destitute. Ms. Feng said she deposited about $165,000, which was all of her savings plus her father’s retirement money.
“I am pregnant and have come this far because this money is very important to me,” she said. “If I don’t get the 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 appeared on Chinese social media, Henan’s banking regulators said on Sunday they were developing a plan to contain the crisis that engulfed the four banks and to “protect the legitimate rights and interests of the public”. but gave no 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 April. The national regulator warned customers not to be tempted by promises of extremely high returns or to make hasty bank deposits through third parties.
Police in Henan’s Xuchang city said Monday they were investigating a criminal gang led by a man named Lu Yi, who they believe used Henan New Fortune Group to gain control over rural banks and have fictitious loans. used to transfer money illegally. funds. The scheme, which began in 2011, according to police, involved setting up online platforms to promote financial products and recruit 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 feared they might never see their money. Some, noting that the alleged financial misconduct dates back more than a decade, raised the question of whether authorities had ignored previous signs of fraud. Public pressure is now their only recourse, the protesters said in interviews.
“A single person is really too powerless; we will only attract the attention of the government if 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 carried away from the protest site. After a short hospital visit, she quickly left the city fearing arrest in Zhengzhou and boarding a train on crutches.
“We only came to make a statement about honesty, nothing else,” she said. “These brutal beatings and repression have surprised us.”