China detains alleged bank fraud ‘gang’ after rare mass protests

China detains alleged bank fraud ‘gang’ after rare mass protests

China detains alleged bank fraud ‘gang’ after rare mass protests

Members of a “criminal gang” accused of taking control of local banks have been arrested in central China after rare protests over alleged financial corruption sparked violent clashes between customers and authorities.    

Hit hard by the country’s economic slowdown, four banks in Henan province have since mid-April frozen all cash withdrawals, leaving thousands of small savers without funds and sparking sporadic demonstrations.    

In one of the largest such rallies yet, hundreds gathered on July 10 outside a branch of the People’s Bank of China in Henan’s capital Zhengzhou demanding their money, according to multiple witnesses.    

Protesters held banners accusing local officials and police of corruption, calling on the central government to “give severe punishment to Henan.”    

Police in nearby Xuchang city said late on July 10 that they had arrested members of an alleged “criminal gang” for their suspected involvement in a scheme to gain control of local banks.    

The gang made illegal transfers through fictitious loans and used their shareholdings - as well as “manipulation of executives” - to effectively take over several local banks starting in 2011, police said.    

The province’s banking and insurance regulator also said that it was “accelerating” plans to tackle the local financial crisis.    

Demonstrations are relatively rare in tightly controlled China, where authorities enforce social stability at all cost and where opposition is swiftly repressed.    

But desperate citizens have occasionally succeeded in organising mass gatherings, usually when their targets are local governments or individual corporations rather than the Communist Party itself.