It is now two months since depositors have been unable to withdraw money from some rural banks in China, and the authorities have not announced any solutions or investigation into the problem.
According to China Watch, mainland Chinese media found that those behind the disappearance of 40 billion yuan deposits (nearly 6 billion dollars) in these banks involved a ministerial-level official.
As previously reported, on April 18 and 19, six rural banks in Henan and Anhui issued notices, saying that their online banking and mobile banking services were suspended due to “system upgrades.” At the same time, depositors, one after another, reported to the media that they could not withdraw their money.
The number of depositors involved in the case was reported at more than 400,000 people, with the relevant funds reaching nearly 40 billion yuan.
Two months after the incident, no solutions have been announced, and the investigation is going nowhere.
On June 13, reports in mainland China media and social platforms show that many depositors entered Henan to retrieve their savings from troubled rural banks. When they scanned their health codes, the code turned from “green code” at the original place of departure to “red code.”
Chinese residents must have an app to show a code that indicates their health status, including COVID-19 exposure. They must have a green code to use public transportation and to enter offices, restaurants, and malls.
Some depositors claimed that their health codes were intentionally changed to red to restrict travel and prevent them from withdrawing funds.
On June 15, more information was revealed. Four troublesome rural banks have the same sponsor behind them – Henan Xuchang Rural Commercial Bank.
Xuchang Rural Commercial Bank invested in five village banks, holding a 20.5% stake in Yuzhou Xinminsheng Village Bank, 51% stake in Shangcai Huimin Village Bank, 51% stake in Zhecheng Huanghuai Village Bank, 40% stake in Anhui Guzhen Xinhuaihe Village Bank and 40% stake in Yixian Xinhuaihe Village Bank.
The official behind the scenes, Lu Yi, is already abroad and is involved in the case of Cai Esheng, the former vice-chairman of the China Banking Regulatory Commission.
According to China’s National Enterprise Credit Information Publicity System, Henan Xuchang Rural Commercial Bank has a complex shareholder structure. Among the total of 73 shareholders, 23 are individuals, and the rest are companies.
And Henan New Fortune Group is associated with several rural banks initiated and established by Henan Xuchang Rural Commercial Bank. The group indirectly holds shares at those banks and acts as an “invisible” shareholder.
Henan banking industry sources revealed that the actual controller behind Henan New Fortune Group might be businessman Lu Yi.
Lu Yi, born in 1974, is a Cypriot national. He claims to be the Liberian commercial investment representative in China and the chairman of Cyprus Aphrodite Investment Group.
In September 2003, the Lanwei Expressway from Lankao to Shenqiu laid the foundation stone. Lu Yi won the 30-year toll right of this highway with a total investment of 2.4 billion yuan (nearly 360 million dollars).
In 2017, Lu Yi applied for a loan of 3.5 billion yuan (521 million dollars) from Hengfeng Bank. Cai Guohua, the chairman of Hengfeng Bank at the time, personally facilitated it. Until Cai Guohua was sentenced to death and suspended to life imprisonment, the money was still missing.
The influence of the Henan New Fortune Group under the control of Lu Yi is not limited to these rural commercial banks. The group also holds equity at Luoyang Bank, Hebei Bank, and other major regional banks.
It is worth noting that after Cai Esheng, the former vice-chairman of the China Banking Regulatory Commission, was arrested for accepting bribes in February 2022, the authorities asked Lu Yi to assist in the investigation for several months. After being released, he went to the United States.
According to the official report on June 13, Cai Esheng was suspected of using his influence to accept bribes and abusing power.
The investigation was concluded by the National Supervisory Commission and designated by the Supreme Procuratorate. It was reviewed and prosecuted by the Zhenjiang City Procuratorate, Jiangsu Province, and Zhenjiang City Intermediate Court filed a public prosecution.