Police in China hunt for ‘runaway bosses’October 26th, 2011 - 10:34 am ICT by IANS
Beijing, Oct 26 (IANS) Police in China have launched a crackdown on entrepreneurs who have gone into hiding to avoid repaying bank and informal high-interest loans.
The move has come as part of a move to control the debt crisis in east China from spilling into social unrest, Xinhua quoted officials as saying.
Rao Dawei, a shoe factory owner who employs 60 workers, was the first Wenzhou businessman hunted down by police. The recent debt crisis, precipitated in part by the country’s monetary tightening, has sent shock waves through the city.
According to officials, Rao had fled owing 800,000 yuan ($125,520) to upstream suppliers and 200,000 yuan in employees’ wages. He was held from his home province of Jiangxi Oct 18, four days after he sold off factory equipment. Later, he ran away with his girlfriend.
Rao happens to be one of more than 90 owners of small and medium-sized enterprises (SMEs) in Wenzhou who have disappeared or declared bankruptcy to invalidate debts owed to individual creditors pooled from the informal lending market.
Fearing their wages wouldn’t be paid after their bosses fled, many employees have taken to the streets to protest. They want to prevent indebted bosses fleeing abroad. Many factory bosses are believed to hold foreign passports, said officials.
Private enterprises are a critical part of Zhejiang’s economy, accounting for about 70 percent of GDP and employing 90 percent of the workforce.
- Man held for failing to repay loan to 1,000 lenders - Feb 06, 2012
- Oriental Bank to increase lending to SMEs - Apr 20, 2011
- China facilitates debt-for-equity swaps for firms - Nov 23, 2011
- Chinese jailed for not paying workers - Jan 15, 2012
- Chinese swindles over $474,000 with bank passwords - May 21, 2012
- Man jailed for not paying workers - Jan 14, 2012
- Workers at two Indian eateries in US get $95,000 in back pay - Apr 05, 2011
- China to end state monopoly in banks - Apr 05, 2012
- China's Purchasing Managers Index rises in January (Lead) - Feb 01, 2012
- Manufacturing policy is designed to create jobs: CII - Nov 13, 2011
- Workers in China toil on 1.90 pounds a day to make 30 pounds World Cup mascot - Jan 24, 2010
- Drought stalks China's food bowl - May 17, 2011
- Ratings reduce borrowing costs of SMEs: Crisil - Apr 19, 2011
- Europe agrees to 1 trillion euro fund for new bailout plan - Oct 27, 2011
- Crisil to target SMEs in tier II, III towns - Feb 22, 2012
Tags: businessman, crackdown, creditors, debt crisis, east china, high interest loans, home province, jiangxi, medium sized enterprises, passports, private enterprises, rao, shock waves, shoe factory, small and medium sized enterprises, social unrest, wenzhou, xinhua, yuan, zhejiang