Wenzhou 'role model' flees amid fraud probe

PUBLISHED : Wednesday, 06 June, 2012, 12:00am
UPDATED : Wednesday, 06 June, 2012, 12:00am
 

Lin Chunping, a Wenzhou businessman who made headlines when he claimed to have bought an American bank, has fled the city amid allegations that he issued fake invoices.

Mainland newspaper Legal Daily yesterday reported that Lin (pictured) absconded on May 23 and that police in the city in the eastern province of Zhejiang were investigating.

The total amount of the fake invoices in the case could exceed 100 million yuan (HK$122 million), the paper said.

A spokesman for the Wenzhou police bureau refused to comment.

Just six months ago, the 42-year-old entrepreneur, whose business empire spans mining, food and trading, was hailed as a role model by the local government after he claimed to have acquired the '85-year-old Atlantic Bank of America in Delaware' for US$60 million.

Lin also said he formed a new bank after the deal and called it The USA New HSBC Federation Consortium Inc. He said it was already turning a profit, and projected an annual net income of up to US$800,000.

The deal was seen by the Wenzhou government as a boost to the city's image as the nation's hub of private businesses. That image has taken a hard knock in past months as dozens of entrepreneurs from Wenzhou have fled, unable to pay back loan sharks, with some even committing suicide.

Lin's fairy tale did not take long to unravel. In an article in March, Xinhua said the so-called Atlantic Bank of America did not exist and that Lin's 'new bank' was actually registered as a general-purpose company rather than a financial institution licensed for banking.

Lin issued a public apology for the 'exaggeration' but insisted he was looking to buy banks in the United States and elsewhere.

Legal Daily quoted sources as saying that Lin had issued false value added tax invoices through five of his companies since last year to claim export tax rebates and tax deductions.

21.6%

Lending rates so-called shadow banks in Wenzhou demanded on loans in April, according to the central bank's branch there

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