Vietnam Police Arrest Over Hundreds of Suspects in Loan Shark Ring Allegedly Run by Chinese
As far as China is concerned, it has eclipsed both the World Bank and the International Monetary Fund (IMF) as the world’s largest creditor by lending out hundreds of billions of dollars. Financial experts have expressed their concern over China’s emergence as a major lending power as it is now upending that system, forcing everyone involved to navigate a changing landscape in which the new heavyweight shuns the old playbook. Beyond following different criteria in lending, China has also favored a bilateral approach to debt renegotiations that clashes with the Paris Club’s coordinated framework. Efforts to include China have flopped, too: But it has been repeatedly refused offers to join the group while questioning the norms that have underpinned it.
China’s economic rise has challenged that dominance. Once a debtor nation, since launching its Belt and Road Initiative (BRI)—a sweeping infrastructure development initiative designed to export China’s industrial overcapacity and extend its global influence—in 2013, it has been doled out hundreds of billions of dollars in loans international debt-restructuring practices, stated the Foreign Policy article.
Chinese nationals have taken advantage of its financial position to exploit others. In Vietnam, the Police department has managed to bust a major loan shark headed by a Chinese national. According to the Vietnam-based website, The police operating in Da Nang took help from their counterparts in HCM City and the southern province of Binh Duong to bust a major loan shark ring headed by a Chinese national, whilst also arresting a total of 192 suspects. The mastermind behind the ring was identified a 36-year-old Chinese national, Wang YunTao.
|Chinese suspect Wang YunTao (Photo: cand.com.vn)
The Police said that the Chinese suspect had hired several Vietnamese people to establish dozens of companies operating in different fields. These companies were headquartered in Da Nang, Ho Chi Minh City, and the southern province of Binh Duong and offered cash advances via smartphone apps with extremely high rates. Debtors were then forced to pay an interest rate of up to 500% per year.
In July 2023, a criminal group led by Chinese nationals was arrested by the Vietnamese police. The gang had operated through intermediary companies to offer loans with exorbitant interest rates, amounting to a staggering VND20 trillion, and illicitly gained profits exceeding VND8 trillion. Additionally, the group was involved in money laundering schemes and unlawfully transferred more than VND5 trillion out of Vietnam.
According to vietnamnet.vn, illegal operation has been ongoing since December 2020, orchestrated by a group of Chinese individuals colluding with Vietnamese counterparts. They utilized various bogus commercial entities to organize high-interest lending activities. Utilizing the "Great Vay" application, these suspects provided loans to more than 1 million people with an interest rate exceeding 2,346 percent per annum.
Vietnam is not the only country where Chinese loan sharks operate. Sri Lanka, which is 3000 kilometres away from Vietnam is another favourite destination of Chinese loan sharks. A gang was busted in which five Chinese loan sharks were recently nabbed by the police along with one Sri Lankan. The police conducted raid after Opposition Leader MP Sajith Premadasa raised the issue in Parliament few days ago in which he spoke about how loan sharks were overcharging people for loans. The opposition leader said that many of these online loan services were operated by foreigners who have taken advantage of the existing bankruptcy by charging exorbitant interest rates for loans offered, such as nearly 300%. The opposition leader revealed that several online loan services have entered the local market to exploit the bankrupt state of Sri Lanka further burdening the innocent public.
News reports disclosed that the Criminal Investigations Department had nabbed five Chinese nationals and one Sri Lankan during a raid on an online loan center in Dehiwala. The investigating agency confiscated eight desktop computers, 13 laptops and 41 mobile phones from the cenre. The raid was conducted in response to a complaint.