Death sentence in Chinese underground bank caseBy AP News May 20, 2013 12:47PM UTC
BEIJING (AP) — A businesswoman in southern China has been sentenced to death in the government’s latest crackdown on underground lending that is widely used by entrepreneurs.
The Intermediate People’s Court of Wenzhou, a center for private sector business, says Lin Haiyan was convicted of “illegal fundraising” for collecting 640 million yuan ($101 million) from individual investors by promising high returns and low risk.
Chinese entrepreneurs who often cannot get loans from the state-owned banking system rely on such informal lending. Regulators have begun tightening controls after a surge of defaults prompted protests by lenders.
Another businesswoman from Wenzhou also was sentenced to death last year on illegal fundraising charges. That penalty was overturned following an outcry on the Internet and she was sentenced to prison.