By Laura He, MarketWatch
HONG KONG (MarketWatch) — China’s central bank and its top financial regulator are vowing action against the theft of bank depositors’ money, an issue that has entered the spotlight after a man was wrongly jailed for trying to recover money stolen by a bank employee.
The man in question is Zhang Jing, the former chairman of a listed battery company in the southwestern city of Chongqing. Zhang is currently negotiating with a local branch of Agricultural Bank of China Ltd. /zigman2/quotes/200705246/delayed HK:1288 +3.61% /zigman2/quotes/209398792/delayed ACGBF -2.52% /zigman2/quotes/204629388/delayed CN:601288 +1.25% after he spent four years in jail for suing the bank over his missing deposit of more than 1.2 million yuan ($192,000), according to a report Monday in the government-owned Changjiang Business Daily.
Zhang had sued state-owned AgBank back in 2005, but when the lender claimed ignorance of any missing funds, Zhang found himself arrested and sentenced to four years in prison, along with a 100,000-yuan fine, for “defrauding public property” from AgBank.
After Zhang was released from prison in 2010, he sought redress from the Supreme Court and finally got his case corrected in December last year, the report said.
“This is extremely ridiculous,” the newspaper quoted Gao Yifei, a professor at the Southwest University of Political Science and Law, as saying. “The judges from first and second instances were very rash” in their judgement.
And Zhang is by no means alone — other Chinese savers have found their deposits at state banks have gone missing, only to see the bank claim no fault in the incidents.
A combined 95 million yuan worth of deposits from 42 separate accounts have reportedly disappeared at the United Rural Cooperative Bank of Hangzhou, located in the eastern province of Zhejiang, the state-run Xinhua News Agency said Sunday in a special report.
The missing funds turned out to be the result of an employee and her accomplices stealing passcodes, with two of the suspects now under arrest. Unlike in Zhang’s case, however, local police said the bank had promised to “make advance payments” to the victims, Xinhua reported.
Since the start of 2014, victims of stolen bank funds have even included listed companies, such as Dongfeng Motor Co. /zigman2/quotes/202033304/delayed HK:489 +0.47% and liquor maker Luzhou Laojiao Co. /zigman2/quotes/200167985/delayed CN:000568 +1.91% , the report said.
As the issue gained a sudden rush of media attention, both the People’s Bank of China and the China Banking Regulatory Commission (CBRC) promised at a press briefing Friday that they would enhance internal controls to prevent similar cases from happening.
CBRC Vice Chairman Wang Zhaoxing said the banks have the obligation to protect lawful rights of savers, with investigators still looking into separate cases of missing deposits.
Such has not always been the case, with Xinhua quoting Li Chunquan, a lawyer at Polaw & Shanghai Co., as saying banks focus on smoothing things over in such cases of missing funds but have little motivation to strengthen their internal controls.