HONG KONG. A financial scandal in central China has affected savers across the country, some of whom placed their savings in four high-yielding rural banks only to find their funds frozen as investigators investigate allegations of widespread fraud.
The city backed down after the backlash and several officials were punished. But depositors kept coming, and up to a thousand people turned up on Sunday.
This time, the authorities expelled guards en masse to disperse the demonstration. They beat the protesters, knocking them to the ground and pushing them into buses, in the most brutal response to attempts by bank depositors to seek redress.
Photos and videos of plainclothes security agents attacking protesters were posted on Chinese social media, sparking anger over the use of force. While protest images are often quickly censored in China, footage from Zhengzhou was still widely available on Monday, with one hashtag viewed 32 million times on Weibo, a Twitter-like service.
Protesters gathered in front of the Zhengzhou branch of the country’s central bank, the People’s Bank of China. Protesters interviewed by phone said dozens of people were sent to hospitals after being beaten.
“We came all the way to Zhengzhou to get our money back, and we didn’t want conflict with anyone,” said Feng Tianyu, 31, who lives in the northern city of Harbin. “But the government sent so many people to deal with unarmed people. We were cheated financially, beaten physically and traumatized mentally.”
RS. Feng, who is two months pregnant, said men in white shirts dragged her by her hair and arms into a bus, where police beat several demonstrators. She said she was eventually taken to the hospital for stomach pains, but was denied admission.
Depositors say they are trying to recover money they have placed in rural banks 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.
Contributors from across the country tried to claim their money in person, despite authorities repeatedly shutting down their messaging groups and trying to block their travel.
While the protests remain centered around four rural banks, all in Henan, China’s wider economic downturn and the rising impact of Covid lockdowns could potentially put more institutions at risk and test the country’s relatively new deposit insurance mechanism.
Deposits in China are guaranteed up to 500,000 Chinese yuan, about $74,500, but many Henan bank customers have invested much more. If the Henan provincial government decides that their deposits were part of an illegal fundraising scheme, it could complicate any attempt to get their money back.
Many protesters said they put their savings in banks and are now left without a livelihood. RS. Feng said she invested about $165,000, which was her entire 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 won’t have prenatal checkups, I won’t have this baby, and I won’t be able to continue supporting my 2-year-old daughter.”
After reports of the protests surfaced on Chinese social media, Henan’s banking regulators said on Sunday they were developing a plan to manage the four-bank crisis and “protect the legitimate rights and interests of the public,” but did not provide any specific details. .
The China Banking and Insurance Regulatory Commission accused Henan New Fortune Group, a shareholder of four banks, of illegally using third-party platforms and stock brokers to attract depositors from across the country, state media reported in April. The national regulator warned clients not to be tempted by promises of extremely high yields or hastily place bank deposits through third parties.
Henan Xuchang City Police said on Monday they are investigating a criminal gang led by a man named Lu Yi who they say may have used Henan New Fortune Group to gain control over rural banks and used fictitious loans to transfer money illegally. funds. The scheme, which police say began in 2011, involved setting up online platforms to promote financial products and attract new customers, according to police, who added that some people have been arrested.
But several demonstrators said they think police and regulators have done too little to protect their interests and fear they will never see their money. Some, noting that the alleged financial wrongdoing goes back more than a decade, raised the question of whether the authorities had ignored earlier signs of fraud. Public pressure is now their only recourse, the protesters said in an interview.
“One person is really too powerless; we only get government attention when we get together,” said Zhang Xia, 38, an administrative assistant from the eastern city of Hangzhou.
RS. Zhang said that she was grabbed by her arms and legs and kicked in the stomach as she was being carried away from the protest site. After a brief visit to the hospital, she quickly left the city for fear of detention in Zhengzhou and boarded the train on crutches.
“We only came to declare justice, nothing more,” she said. “These brutal beatings and reprisals took us by surprise.”