Angry investor stabs finance exec
Print Edition
An angry investor stabbed the chief executive of a troubled asset management company into which he had poured hundreds of thousands of yuan, in an incident said to highlight tensions created by the country鈥檚 financial turmoil.
Wang Jie remained in hospital yesterday, his company Global Wealth Investment (Beijing) told reporters.
The attacker sat next to Wang at a gathering in Beijing on Sunday and 鈥減retended that nothing was wrong,鈥 an eyewitness told Chinese financial news outlet Caixin, before suddenly pulling out a knife and stabbing the CEO in the left shoulder, leaving him with a 15-centimeter wound.
The assailant, who invested 300,000 yuan (US$47,000) in a product that failed to pay out, is being held by police on suspicion of intentional homicide, Caixin reported.
It said the incident was a demonstration of how investor losses in China鈥檚 murky and volatile financial system can lead to tensions and even violence.
鈥淲e鈥檙e not just facing financial pressures 鈥 it鈥檚 difficult to even protect our personal safety,鈥 a source close to Global Wealth told Caixin.
China鈥檚 stock market has plunged by more than a third since it peaked in mid-June as a bubble burst, prompting authorities to spend hundreds of billions of dollars trying to prop up prices.
But Global Wealth operated in an even less orderly area of China鈥檚 financial landscape 鈥 so-called 鈥渨ealth management products.鈥
They offer savers better rates of return than they could get from bank deposits, but only by investing in higher-risk companies that cannot secure funding from more orthodox sources 鈥 and Global Wealth鈥檚 investors were the victims when supposed safeguards failed.
Global Wealth lent out around 710 million yuan in transactions backed by China鈥檚 second-largest loan-guarantee company, Hebei Financing Investment Holding Group, which is owned by the Hebei provincial government.
Hebei Financing has run into problems of its own and reneged on its guarantees earlier this year, leaving Global Wealth with no safety net when its borrowers began to default.
It is now holding meetings with its own investors 鈥 around 660 of whom are affected 鈥 every week.
State-backed loan guarantee firms are a key link in China鈥檚 plans for economic revival, facilitating opportunities for smaller businesses by luring in lenders with the implicit promise of government intervention if borrowers fail to pay their debts. But insiders say the loan-guarantee industry needs more regulation.
鈥淭he sector still lacks effective risk control,鈥 Zhou Dewen, president of a business development association, told the Global Times in April, as Hebei Financing was plunged into crisis. Hebei Financing has liabilities of nearly 50 billion yuan, Caixin said, but at the end of 2013 its assets were just 10.7 billion yuan.
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