4 jailed, fined for taking public deposits

Updated: 2013-03-23 11:19


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WENZHOU - A court in east China's Zhejiang province on Friday handed down prison sentences to four people who illegally took 183 million yuan ($29.2 million) in public savings.

Cai Ailan, Ye Hong, Zhang Chunlan and Zhang Yibo received jail terms of four-and-a-half, seven-and-a-half, six and seven years, respectively, for illegally taking public deposits in three separate cases, according to the rulings of the Lucheng District People's Court in Wenzhou city.

The defendants were also given fines ranging from 200,000 to 400,000 yuan.

More than 140 victims were involved in the three cases, including the defendants' friends, relatives, fellow villagers and Christians they met at church.

A thriving underground lending market has been widely documented in Zhejiang, a bustling coastal province flush with abundant liquidity. Unable to obtain bank loans, private companies often turn to underground lenders to finance their businesses, which has created problems in the province.

In the most famous case, Wu Ying, former owner of the Zhejiang-based Bense Holding Group, was sentenced to death with a two-year reprieve last year for cheating investors out of 380 million yuan from 2005 to 2007.

Many borrowers who could not repay the debts amid the economic downturn simply fled abroad, leaving private lenders to deal with huge losses.

To regulate private lending, the State Council, China's Cabinet, announced a plan last year to set up a pilot zone in Wenzhou to encourage and support the participation of private capital in the reform of local financial institutions by setting up or taking shares in rural banks and credit companies.