Society

State grain depots mired in $26m Ponzi fraud

By Zhao Chenyan (chinadaily.com.cn)
Updated: 2011-06-10 15:58

Nine directors of a number of state-owned grain depots in Lanxi county of Northeast China's Heilongjiang province have been charged with fraud after swindling a bank out of 170 million yuan ($26 million), Xinhua News Agency reported on Friday.

The Public Security Bureau of Lanxi county said the directors of the county's nine grain depots conned the Agriculture Development Bank by falsifying documents. Four of the loans surpassed 20 million yuan each.

Two of the nine directors involved in the biggest fraud were arrested in February. Two others were listed as wanted by police and the other five were on bail and awaiting trial.

The head of the Public Security Bureau of Lanxi county said the nine grain depots are all state-owned depots, but not the country's grain reserve depots. All the depots had operating problems and the related authorities should also be blamed for poor supervision, the bureau head said.

He said the nine grain depots have all stopped operation now and the case is under investigation by the police.