A Shandong businessman said a rural credit co-operative stole tens of millions of yuan from his savings, and he does not know when he will get it back.
Sun Jianjun, from Tai'an, said he deposited 23.5 million yuan ($3.3 million) in a Fenghua rural credit co-operative account after being lured by an illegal high interest rate by then-director Hu Yongcheng.
He was then shocked to discover last year that the money had been withdrawn without his permission.
"I cannot believe my bank stole 23.5 million yuan from me," Sun told China Daily.
"It's been almost a year now and I still do not have an explanation about how my money was transferred out."
Fenghua rural credit co-operative is one of many established by the central government to provide financial services to farmers and rural firms.
Sun said he confronted the co-operative about the missing money, demanding it be returned, and received just 3.3 million yuan. Police detained Hu on suspicion of fraud last year and he will soon stand trial.
"There were definitely loopholes that could be taken advantage of under Hu's management," said Li Yanling, the current director of Fenghua rural credit co-operative.
But Sun was not the only victim. Li said that three or four other customers with tens of millions of yuan had their savings stolen.
"Besides Hu, other staff at the branch were involved in transferring out customers' money without their presence," said Han Chuandai, a local businessman who claimed to have lost 19.1 million yuan from his account at Fenghua rural credit co-operative.
Sun launched civil legal action against Fenghua rural credit co-operative in Tai'an Intermediate People's Court last September.
"Sun is not the only customer that the rural credit co-operative owed money to," said Gao Tang, attorney for Sun. "Four others also tried to file similar lawsuits but only my client's case was accepted."
The court suspended the case in the middle of the trial due to certain circumstances, but litigants were not told what the circumstances were, Gao said.
Gao believed that the court suspended the case because they suspected Hu was behind the disappearance of Sun's and other customers' money.
The court might want to wait for the verdict of Hu's criminal case before resuming his client's civil case, Gao said.
"Twenty million yuan is not a small amount of money and my client's business was deeply affected without the funds," Gao said. "We would like the case to be resumed as soon as possible, so my client can get his money back."
Gao said he has not been told when the trial will be resumed.
Lu Hua, spokesperson of Tai'an Intermediate People's Court, said she was not aware of the details of the case.
The spokesperson of Tai'an Banking Regulatory Commission said he was aware of the matter but he refused to say whether the commission was involved in the investigation.
What are rural credit cooperatives?
Although there are many commercial banks in China, they don't operate in areas below county level due to the costs of operation, high financial risk and low return. The rural sector is now served by a state bank (Agricultural Bank of China), a policy bank (Agricultural Development Bank of China) and thousands of rural credit co-operatives (RCCs).
A rural credit co-operative is the only legal financial institution, other than banks, serving rural enterprises and individuals. By the end of last year, there were about 40,000 RCCs across China.
The sector remains largely insolvent because loans are not extended on commercial terms, and local governments often exert pressure on the cooperatives to lend without a proper credit evaluation of the project.
Last year, outstanding loans by RCCs totaled 3.7 trillion yuan ($541 billion), accounting for 89 percent of rural loans granted by China's financing system.
(China Daily July 30, 2009)
