Shouheng Group Limited Company (Shouheng Group) has been exposed for utilizing employees to fraudulently obtain loans of 1 billion yuan from banks. Industry insiders indicate that this action poses risks for both the employees and the banks.
According to a report by the Economic Reference News on July 10, several employees revealed that since 2016, Shouheng Group has required some employees (or employees using the names of their relatives and friends) to register companies. After registration, the business license, company seal, personal seal of the legal representative (or operator) of the enterprise, photocopy of personal ID card, bank account and bank card, online banking tokens, etc., of the companies were all managed and used uniformly by the financing department. Subsequently, the financing department of Shouheng Group injected operational funds into these employee-owned companies, and then coordinated with banks to fraudulently obtain loans in the names of employees (or employees’ relatives and friends) or their affiliated companies.
A financial staff member of Shouheng Group revealed to the media that this operation has been going on for many years at Shouheng Group, with a dedicated team within the financing department specifically responsible for this, with the total amount of such loans known to him reaching as high as 1 billion yuan.
Regarding why Shouheng Group extensively used employees to commit loan fraud, the President of Shouheng Group, Wei Shujian, told the Economic Reference News, “The company does not engage in such behavior, it’s not true.”
In response to this, Professor Tan Qiugui from the China University of Political Science and Law expressed that the act of “registering companies through employees, falsifying transaction records to obtain bank loans” is a serious violation of the law, not only posing risks to employees but also to the banks. Banks should strengthen due diligence investigations in loan approval and post-loan management, while financial regulatory authorities should enhance supervision to eliminate risks.
Public records show that Shouheng Group Limited Company was established on August 24, 2017. The company’s business scope is extensive, including internet sales, retail and wholesale of edible agricultural products, daily department store sales, wholesale of kitchenware, sanitary ware, and sundries, sales of construction materials, vegetable and fruit planting, technical services, housing leasing, domestic and international cargo transportation agency, hotel management, organization of cultural and art exchange activities, and more.