Chinese Credit Union Fakes Debtors’ Deaths
A credit union in China wrote off about $400,000 in loans for 58 people who had allegedly died or gone missing, but an investigative report has revealed that at least one-third of them are still very much alive.
An anonymous whistleblower gave to the Beijing News a list of bad debts from the Shenzhou City Farmers’ Credit Union in Hebei Province. The list said 58 people who borrowed a total of 2.5 million yuan ($400,000) from the union were dead or missing, rendering their loans uncollectable, and therefore removing them from the books.
According to the list, 43 of the 58 credit union clients were deceased and the other 15 were missing. The debtors included public servants, officers of the court, township and village officials, and their relatives.
The Beijing News reported that at least 13 of the deceased and six of the missing people are alive, and apparently had no idea they had been listed as dead. All have outstanding loans at the credit union. When contacted by the newspaper, three men in Shenzhou City had similar stories to share.
Guo Zangpan in Guojiazhuang Village was getting ready for work on March 31 when interviewed. He said he has a loan with the credit union and pays the interest every year. He added that the union had not told him his loan had been written off or that he had been listed as dead. Several of his fellow villagers on the list of deceased are also still alive.
Deputy Mayor Wei Zhichun of Shenzhou City said on April 1 that he knew his loan had been written off, but did not know that he was supposedly dead. Wei said he had borrowed money from the credit union and had not paid it back.
Deputy Chief Cui Peng of Shenzhou City Public Security Bureau said in a telephone interview on April 3 that his situation was similar to Wei Zhichun’s. Also on the list of dead debtors is Party Secretary Wang Sanzhui of Bingcao Township, who Cui Peng said is retired and alive.
Credit union director Liang Fengxin said the incident is being investigated. “The list of written-off loans is an internal, confidential document. Our biggest mistake was leaking it,” he told the Beijing News.
The union’s supervisor board chairman Tian Liquan added that errors had been made in verifying the authenticity of the claims of deceased and missing debtors, and three directors involved in the fraud have been suspended.
Tian said the union had verified death certificates and proof relating to missing persons before writing off those loans. The directors under investigation had insisted the verified documents were issued by the Public Security Department, and Tian said he could not provide the documents due to privacy rules.
According to a staff member, the ratio of non-performing to performing loans is an important indicator of a financial institution’s success. Over the past two years, workers felt pressured to write off loans and remove non-performing loans from the books. “In the process of doing so, the procedures all look legitimate, but there are actually a lot of secrets,” the staffer added.
An insider told the paper that the majority of the people on the list could pay back the loans. However, because some people are in positions of authority, it is difficult to get them to repay what they owe. Some of the loans were secured with collateral, but the credit union did not collect it when the loans went bad, and those debts were still written off. “Similar problems are common among credit unions,” the insider noted.
Netizens reacted strongly to the news. One Internet user posted: “This is a new trick for stealing money.”
Another said this is how officials who borrowed money avoid paying it back. “They came up with this idea. As long as it’s not exposed, they can get away with it. It is just a method for the officials to get money when they need some–perfectly normal!”
A third said, “This is the Chinese way of balancing accounts. The Guinness Book of World Records should check it out.”
Translation by Quincy Yu. Written in English by Mary Silver.
Read the original Chinese article.
The Epoch Times publishes in 35 countries and in 21 languages. Subscribe to our e-newsletter.