SHANG­HAI PROS­E­CUTES FRAUDS WORTH $329 MIL­LION

China Daily (Hong Kong) - - NATION -

Shang­hai au­thor­i­ties pros­e­cuted 39 fi­nan­cial pro­fes­sion­als, in 23 cases in­volv­ing nearly 2 bil­lion yuan ($329 mil­lion), as of Novem­ber.

Prose­cu­tions cov­ered em­bez­zle­ment, bribes, fraud­u­lent fundrais­ing and tak­ing de­posits from the pub­lic il­le­gally, ac­cord­ing to Shang­hai pros­e­cu­tors.

Some of the of­fend­ers or­ga­nized il­le­gal fundrais­ing in the name of sell­ing fi­nan­cial prod­ucts, and some were guilty of tak­ing bribes for pro­cure­ment.

Bank clerks said they knew that some of their bosses took ad­van­tage of their clients’ re­sources.

“Af­ter years in the po­si­tion and build­ing up a rep­u­ta­tion, they have a large num­ber of clients,” said a bank clerk, sur­named Wu in Min­hang dis­trict.

“Clients went to them for de­posits and loans. The bank man­agers made money by ex­ploit­ing the dif­fer­ence in in­ter­est be­tween loans and de­posits.”

More­over, the se­cu­ri­ties mar­ket has been af­fected by ma­nip­u­la­tion and “rat trad­ing”, as bro­kers and se­nior man­agers of fi­nan­cial in­sti­tu­tions used in­side in­for­ma­tion to reap il­licit gains and af­fect share prices, Zou Bi­hua, vice-pres­i­dent of Shang­hai High Peo­ple’s Court said in Oc­to­ber, when Li Xuli, a for­mer pri­vate eq­uity star, was given a four-year sen­tence and fined 18 mil­lion yuan for prof­it­ing from “rat trad­ing”.

Li, 40, for­mer chief in­vest­ment of­fi­cer of Shang­hai-based Bank of Com­mu­ni­ca­tions Schroders Fund Man­age­ment, traded on non-dis­closed in­for­ma­tion and made more than 10 mil­lion yuan in il­licit prof­its.

“Staff in the fi­nan­cial in­dus­try must show in­tegrity in their work and the in­sti­tu­tions should carry out risk pre­dic­tion and as­sess­ment,” said Lin Zhongming, a spokesman for the Shang­hai Peo­ple’s Procu­ra­torate.

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