The People's Bank of China found last year that Shanghai Chang-go was involved in illegal operations. (Photo : YouTube)
The People’s Bank of China (PBOC) has told Shanghai Chang-go Corporate Services Co. Ltd. to stop selling prepaid shopping cards that had become popular in Shanghai and rich provinces, one year after learning that the company was involved in illegal operations.
PBOC issued a statement on its website on Thursday, Jan. 7, that Chang-go misappropriated reserve deposits, forged fiscal documentation, and obstructed official audit, according to Caixin.
The statement did not indicate the amount of money that PBOC regulations require to be held in special accounts at a bank. An insider told the publication in 2014 that a Chang-go official transferred up to 30 million yuan to relatives' accounts.
The central bank as well pointed out that the police have detained one person in charge of the company, although it did not give specifics on the individual. Liu Rongjuan and Jiang Lingpin are named in documents filed in the Shanghai commerce bureau as major shareholders in Chang-go.
Clients still having the company's cards can receive 85 percent of their money back from an asset management corporation under the Bank of Communications, one of China's biggest commercial banks.
A different report from the same publication revealed that clients began experiencing issues with the Chang-go cards in supermarkets and shopping malls in Dec. 2014. Almost 36 customers of Chang-go later visited the firm's offices to seek refunds.
The headquarters of the bank where Chang-go kept its reserve deposits realized the company was making unusual transactions and informed the Shanghai office, but the latter took no notice of the warning.
In January last year, the central bank's Shanghai office said in a statement that it realized during a probe into the firm's activities that it was engaged in illegitimate operations.
However, the company was allowed to continue with its operations. The central bank then said it would make a decision on how to handle the issue after carrying out sufficient investigations. In addition, a few stores had restarted accepting Chang-go's cards.
