Chinese banking scandal: financial official placed under investigation

Banking watchdog says Li Huanting, who was once responsible for overseeing the banks in question, is facing a disciplinary probe

The announcement comes two weeks after a protest in Henan province saw bank customers being attacked by unidentified men in white

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Bank customers have staged protests demanding their money back. Photo: Reuters

Published: 7:37pm, 24 Jul 2022Updated: 7:39pm, 24 Jul 2022

An official once responsible for overseeing the banks at the centre of one of China’s biggest financial scandals has been placed under investigation two weeks after rare protests broke out in the central province of Henan.

The China Banking and Insurance Regulatory Commission announced the disciplinary probe into Li Huanting, a senior inspector at its Henan branch, in a terse statement on its website on Sunday.

The scandal involving the disappearance of 40 billion yuan (US$6 billion) in deposits from four rural banks in the province has prompted regular demonstrations in Zhengzhou, the provincial capital, from savers demanding their money back.

The protest two weeks ago turned violent and grabbed international headlines when around 1,000 victims of the scam were attacked by hundreds of unidentified men in white shirts.

An earlier attempt to stop the demonstrations prompted a nationwide outcry after protesters found that their health codes – needed to use public transport or enter public buildings – had suddenly turned red. At least five officials were later punished for the misuse of the codes.

The banking commission did not explain why Li, 60, is under investigation or make any mention of the scandal, which has dealt a heavy blow to the credibility of the Communist Party ahead of a once-in-a-decade leadership shake-up later this year.

According to the news portal Thepaper.cn, Li was responsible for supervising the market access of village and other small and medium rural banks in Henan between 2012 and 2014. He was later promoted to become deputy head of the watchdog’s Henan office.