Further details have emerged in relation to the defrauding of high-end Beijing banking clients by the head of a China Minsheng branch who made use of counterfeit wealth management products to illegally procure funds.
Ms Zhang Ying, head of China Minsheng’s Hangtianqiao branch in Beijing, is alleged to have defrauded over 150 of its high net-worth private banking clients of as much as 3 billion yuan (approx. USD$440 million) by means of counterfeit wealth management products that were subsequently discovered by Minsheng itself to be counterfeits with phony serial numbers.
Zhang claimed that the forged wealth management products would provide annualised rates of return of 4.2% and 8.4% for one year maturities and six month maturities respectively, foisting them upon members of China Minsheng’s exclusive “Jingzuan Golf Club.”
The Jingzuan Golf Club requires that all members have been China Minsheng clients for over a decade, and possess personal financial assets in excess of 10 million yuan.
More Bank Officials Unseated Following Zhang’s Arrest
Zhang was arrested on 13 April after China Minsheng’s headquarters reported the case to authorities.
Chinese media reports that two other wealth product managers from China Minsheng have been arrested for suspected involvement in the case.
A Ms. Li *Hui and a Wang *yu recently led a tour group comprised of approximately 25 Minsheng private banking clients to New Zealand, during which period Ms. Li allegedly told an investor concerned by reports of the scandal that the wealth management products supplied by Ms. Zhang were genuine.
When the tour group returned to China early in the morning of 19 April, both Li and Wang were arrested by members of law enforcement waiting for them at Beijing’s international airport.
Victims claim funds held by Zhang’s family
Defrauded investors are now negotiating with China Minsheng for the return of their funds, whose whereabouts remain a mystery. China Minsheng initially responded to the investors by declaring that the sale of counterfeit wealth products was solely individual conduct on the part of Zhang Ying herself.
Many of Zhang’s victims claim that Zhang channelled the fraudulently obtained funds to accounts held by her family members, chief amongst them her maternal aunt and a younger male cousin.
They have produced “Wealth Management Transfer Agreements” indicating that the forged wealth management products were supposedly owned by other parties initially, as well as providing for the direct transfer of funds to their accounts.
21st Century Herald reports that least eight natural persons are named on such Agreements, all of whom are closely associated and three of whom are domiciled the same address.
Industrial and commercial registration information indicates that one of the three fund recipients living at the same address is a Cui *qi, who was born in 1983 and is the owner of a Beijing-based company with registered capital of 500,000 yuan that is headquartered the same building as the Minsheng Hangtianqiao branch.
China Minsheng Warns Clients about Wealth Product Transfers
On 19 April China Minsheng’s official website published a statement warning clients that all transaction involving its personal wealth management products had to be conducted via its branch platforms, which would provide evidentiary certificates.
Both registration and account transfers for the transfer of its wealth management products would be performed via its own systems, and other parties cannot require clients to independently perform personal bank transfers.