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China Fund News reporter Yishan

On July 31, administrative penalty information disclosed by the Financial Regulatory Administration showed that two former employees of a large state-owned bank were recently banned from the industry for life.

According to relevant judicial documents, the two employees were sentenced in 2020 for the crime of illegally absorbing public deposits, and the total amount involved in the case reached 290 million yuan.

Two former employees were banned from the industry for life

The administrative penalty information disclosure table shows that on July 24, Du Juan, former director of the West Street Branch of the Aksu Bingtuan Branch of the Agricultural Bank of China, and Du Hongyan, former lobby manager of the business department of the Aksu Bingtuan Branch of the Agricultural Bank of China, were both banned from working in the banking industry for life because they were directly responsible for the serious violations of prudent business rules in the behavior management of employees of the former Agricultural Bank of China Aksu Bingtuan Branch.

Committing the crime of illegally absorbing public deposits

The total amount involved is nearly 300 million yuan

A second-instance criminal ruling disclosed by the Judicial Documents Network shows that Du Hongyan was born in February 1965. On February 27, 2019, he was criminally detained for suspected illegal absorption of public deposits and was arrested on April 9, 2020.

Du Juan was born in July 1975. On March 24, 2020, she surrendered to the Aksu Municipal Public Security Bureau in front of a library in Chengdu, Sichuan on suspicion of illegally absorbing public deposits. She was criminally detained on March 27, 2020 and arrested on April 9, 2020.

According to the criminal ruling, in May 2012, Wang No. 1 (handled in another case) established Aksu Dawang Investment Management Co., Ltd. (hereinafter referred to as Aksu Dawang Company) in Aksu City. After the company was established, it did not obtain the qualification of a private equity fund, but it promised to give customers an annual interest return of 8% to 12% in the name of a private equity fund to attract funds from non-specific investors.

In September 2014, Wang No. 1 established Xinjiang Dawang Asset Investment Management Center (hereinafter referred to as Xinjiang Dawang Company, which is a separate company from Aksu Dawang Company with the same staff), but did not obtain the certificate of private investment fund manager until July 23, 2015. According to the receipts and payments and investment contracts recorded in the account books, after obtaining the private fund registration, the company did not absorb funds in accordance with the requirements of the private fund investors.

Du Juan and Du Hongyan, former staff members of the Aksu Corps Branch of the Agricultural Bank of China, advertised that the company could help investors manage their finances and earn high returns while working at the bank, and lured and introduced investors to invest in Dawang Company and signed a contract guarantee. Most of the investor funds were transferred to Wang's personal bank card, a small part was transferred to the personal bank cards of the company's employees, and a very small part was transferred to the company's public account.

Wang No. 1 opened an account in his own name to trade stocks and invested the raised funds in the stock market and futures, attempting to obtain an investment return rate of about 20% from the stock market. He then returned 75% of the profit (15% of the investment return rate) to the investors, and the company kept 25% of the profit (5% of the investment return rate).

In April 2016, due to the stock market decline, Wang Mou 1's investment in the stock market not only did not generate any returns, but also resulted in a loss of principal. Wang Mou 1 then withdrew the stock market funds to repay the investors' interest and principal. After that, Aksu Dawang Company and Xinjiang Dawang Company used the principal of new investors to repay the interest and principal of investors who had matured or delayed repayment until the capital chain broke.

According to a special audit by Xinjiang Mingjing Accounting Firm, Aksu Dawang Company and Xinjiang Dawang Company illegally absorbed a total of 476 million yuan in public deposits from 2013 to 2018. Among them, the defendant Du Hongyan participated in illegally absorbing public deposits of 104 million yuan, with a commission of 7.2731 million yuan, and the defendant Du Juan participated in illegally absorbing public deposits of 190 million yuan, with a commission of 8.632 million yuan. The two illegally absorbed nearly 300 million yuan in public deposits.

The original trial court held that, through the evidence in this case, Wang Mou 1 promoted and introduced the target of the general public through the defendants Du Juan, Du Hongyan and others, and at the same time, did not review and conduct due diligence on investors in accordance with relevant regulations. Therefore, this behavior does not meet the formal requirements of private investment funds, nor does it meet the object requirements of private investment funds. The defendants Du Juan and Du Hongyan knew that Wang Mou 1 was illegally absorbing public deposits, but they still actively provided assistance to him and obtained huge returns, constituting the crime of illegally absorbing public deposits.

In August 2020, the court sentenced the defendant Du Juan to five years and ten months in prison and a fine of RMB 200,000 for the crime of illegally absorbing public deposits at first instance; the defendant Du Hongyan was convicted of the crime of illegally absorbing public deposits and sentenced to five years and four months in prison and a fine of RMB 200,000; the illegal gains of the defendant Du Juan amounted to RMB 8.632 million, which were recovered according to law; the illegal gains of the defendant Du Hongyan amounted to RMB 7.2731 million, which were recovered according to law.

In October of the same year, the Intermediate People's Court of Aksu Prefecture, Xinjiang Uygur Autonomous Region rejected the appeal in the second instance and upheld the original verdict.

Editor: Joey

Review: Xu Wen