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People's Daily Online>>China Business

Private firms' fraud more than doubled

By Cherry Cao (Shanghai Daily)

14:53, February 09, 2012

CRIMINAL cases of fraud and illegal fundraising involving private companies more than doubled in China last year as increasing numbers of medium- and small-sized firms faced problem getting bank loans, said a latest report by the Mirror Evening News.

In 2011, 51 such cases were reported by the domestic media, against 19 in 2010 and 14 in 2009, the newspaper said.

An average 541 million yuan (US$85.87 million) was involved in the 15 cases which were solved last year, a rise of 130 percent from 2010, the report said.

Private entrepreneurs with personal wealth exceeding 100 million yuan accounted for half of the total cases uncovered last year, down from more than 50 percent in 2010 and 70 percent in 2009, a research done by the newspaper found.

Liu Chengbi, an economics professor at Beijing Technology and Business University, said the trend indicated again that it remains very difficult for the country's private SMEs in general to acquire loans from the banks to grow their business.

They seemed to be more prone to turn to illegal methods for capital, Liu said, compared to companies which have already established their reputation in the industry.

By industry, 22 of the 51 cases reported last year were producers, followed by 12 property developers and 10 with diversified operations, according to the newspaper research.

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