China has launched an international hunt for a former bank chief accused of fleeing with more than 100 million yuan ($16 million) illegally raised from relatives and friends.
The Ministry of Public Security has issued an arrest warrant for Sun Feng, the former head of the Yaosai branch of the Agricultural Bank of China in Jiangyin in East China's Jiangsu province.
Sun is believed to have fled abroad with his wife, parents and two children on Dec 28 after defrauding several relatives and friends of more than 100 million yuan, the police department of Wuxi, which administrates Jiangyin, said on its website on Sunday.
"The police are investigating the case, and the International Criminal Police Organization will help arrest and extradite the fugitive," said Cai Wenyu, deputy director of the publicity department of the Party committee of Wuxi.
Sun and his family went to Thailand in December but later disappeared. Police believe they might have gone to Canada.
No funds from depositors of the bank or government public funds were involved in the case, according to Zhou Wenjing, Sun's successor at the branch. Most of the money was raised from local individuals and businesses.
Zhao Jidi, Party chief of Longsha village of Jiangyin, was said to be worst hit by the fraud, as she lent tens of millions to Sun, sources familiar with the case said, adding the money came from the village's public funds.
Phone calls to the village committee were not answered.
Sun fled after he incurred huge losses in futures trading last year and was unable to pay back loans, according to Legal Daily.
The case is the latest of a series of private lending schemes in East China, where business owners borrowed massive private funds and were arrested when they failed to repay loans.
To eradicate these cases, lawyers said, stricter supervision should be imposed on bankers, as they sometimes were involved in private lending, now illegal in China.
"Bank staff are in charge of both the deposit sources and lending channels, and it is easy for them to win the trust of family and friends, as well as corporate clients," said Yi Shenghua from Beijing's Yingke Law Firm.
He said banks can generate much higher returns for customers by lending out money than the interest gained putting it into a savings account. It was also easier to attract business clients who demand that any profits or interest is paid directly to them.
The China Banking Regulatory Commission reminded financial institutions of the risks that their staff flow to borrowers after leaving the jobs in a notice issued in 2008, which required banks to sign confidentiality agreements with their senior managers about trade secrets and client information.
But more control approaches should be taken in addition to the agreements, said Yu Hong, a lawyer with Beijing Yingdao Law Firm, who pays attention to job-related crimes.
"It's more important to perfect laws and regulations and advocate self-discipline in the industry," she said, adding control beforehand is always better than oversight afterward.
A woman surnamed Cai who works for a State-owned bank in Shanghai said some banks are paying too much attention to economic gains, and are failing to properly carry out internal checks and risk management.
