Henan Province to Release Plan to Tackle Rural Bank Run Scandal

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The Henan province government has announced that it is about to release an official plan to help resolve a scandal involving rural financial institutions that threatened to trigger a series of bank runs.

The Henan province banking and insurance regulator and the provincial financial regulator jointly announced on Monday that they are currently in the process of “accelerating investigations of customer funds information for four rural county banks, and formulating a disposal plan that will be released in the near term.”

The Xuchang (许昌) municipal public security bureau has also released further details concerning their investigation into the matter, stating that Lu Yi (吕奕) was at the head of a criminal group that since 2011 has used Henan New Wealth Group (河南新财富集团) and other companies to misappropriate funds from several rural lenders, including Yuzhou Xinminsheng (制禹州新民生).

The misappropriation case involved the use of an independent platform established by a third party online finance platform in conjunction with Junzheng Zhida Tech Co., Ltd. (君正智达科技有限公司), which was under the control of Lu Yi. The platform was responsible for the creation of false loans, while another company – Chenyu Information Technology Co., Ltd. (宸钰信息技术有限公司) was established to delete and amend data.

Xuchang authorities said that they have made further arrests in relation to the matter, and that related funds have been confiscated or frozen, with official investigations still ongoing.