Illegal fund under investigation

By Li Xinran  |   2008-11-5  |     NEWSPAPER EDITION

MORE than 100 officials in central China are being investigated for their alleged involvement in an illegal fund-raising scheme worth billions of yuan.

Teng Wancui, a former senior Party official in the Xiangxi Autonomous Prefecture of Hunan Province, is under double-designation status, according to Caijing Magazine.

Double designation is a procedure of the Communist Party of China. A member or official of the Party is ordered to explain or confess his or her alleged involvement in a disciplinary violation or corruption case at a designated time and in a designated place.

Teng, 49, was formerly the No. 4 ranking official in Xiangxi. Her husband, a clerk at the Xiangxi branch of the Agricultural Bank of China, was also under investigation, the report said.

Teng's family reportedly participated in the illegal fund-raising scheme in which 100,000 families were involved. The money was pooled together and lent at high interest rates to businesses that may otherwise not have been qualified for a bank loan, according to Caijing.

Thousands of investors in the scheme flocked to the prefecture government offices in Jishou City on September 3 and blocked city streets the following day after learning Teng and other officials were repaid 1 billion yuan (US$146.29 million) from the scheme, the report said.

Teng also accepted bribes, according to Caijing.

The scheme started in 2002 and the monthly interest return was 8 percent this year although some businesses were promised 10 percent or 12 percent, the report said.

A police official attached to an investigating task force said the scheme may have involved up to 10 billion yuan.

Some Jishou residents sold homes to join the scheme.