Tragedy of collapsed savings schemes in Nghe An, the rice-growing region.
(Baonghean) - Following the death of a male teacher in Khanh Thanh commune, and then a series of other loan sharks and illegal lenders suddenly declaring bankruptcy and inability to repay debts, thousands of people in Yen Thanh district are in a state of panic and distress...
A village in turmoil
In the early morning of October 2016, relatives were shocked to discover teacher Nguyen Huu V. (38 years old, from Khanh Thanh commune, Yen Thanh district) dead, hanging in front of his house. At that time, Mr. V. was a teacher at a primary school.
But over the years, this male teacher has also been known as a loan shark, involved in an illegal lending ring. "He receives deposits from people and then lends money to others to profit from the difference," said Ms. Nguyen Thi Lan (Khanh Thanh commune).
Before committing suicide, Mr. V. owed local residents nearly one billion dong. In his suicide note, the male teacher stated that due to the excessively high interest rates, he had tried to repay the debt but had not been able to pay it off for several years. "My wife and children are unaware of my debts and borrowings; it's entirely my fault. It has nothing to do with my parents, wife, or children," read a passage from the suicide note that Mr. V. posted on Facebook before his death.
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| The house of a head of a rotating savings and credit association in Khanh Thanh commune (Yen Thanh district) was surrounded by local residents. Photo: Tien Hung |
Because Mr. V. committed suicide, many people who had sent money to this loan shark were left heartbroken, not knowing who to demand repayment. But also following the death of this male teacher, a series of other loan sharks and illegal lending operators in Yen Thanh district also successively declared bankruptcy, no longer able to repay their debts.
The collapses of informal lending schemes are often concentrated in the southern communes of Yen Thanh district, such as Bao Thanh, Son Thanh, Cong Thanh, and Khanh Thanh... At its peak, within just 10 months, from January to October 2018, the Yen Thanh District Police received and investigated 20 informal lending schemes.
Around the same time, the Yen Thanh Police received approximately 50 complaints related to informal lending groups. However, no individuals were prosecuted. The cases were transferred for civil handling. Meanwhile, before declaring bankruptcy, the leaders of these lending groups were believed to have disposed of their assets. Therefore, the people were left disappointed because the individuals involved were "no longer able to repay."
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| Mr. Le Anh Dao (left) said that he will continue to file complaints to reclaim the money. Photo: Tien Hung |
Over the past three years, thousands of households in Yen Thanh have been devastated by the sudden bankruptcy of a local informal lending group leader. The victims are primarily small traders or those with relatives abroad; they are concentrated in market areas and along National Highway 7A in the communes of Bao Thanh, Cong Thanh, and Khanh Thanh.
Since the teacher's death in Khanh Thanh, the debts were dropped and no one pursued them further. Therefore, the heads of the informal lending groups have been declaring bankruptcy one after another, aiming to avoid paying us back.
Bao Thanh commune has the highest number of people participating in informal lending groups. Businesses are thriving here, and many people are also going abroad, resulting in a large amount of idle money. Instead of depositing it in banks, driven by the lure of high interest rates, people often resort to illegal lending or join these groups.
"Some people genuinely went bankrupt because they borrowed from one person and then lent to another. But the debtors later absconded, making it impossible to recover the money. However, there are also many who took advantage of the bankruptcy crisis to liquidate assets and declare bankruptcy in order to seize assets."
People are weary of demanding their money back.
On the first day of July 2019, Mr. Le Anh Dao (63 years old, Son Thanh commune) prepared a thick stack of documents to file a complaint. Over the past two years, Mr. Dao has sent dozens of letters and met with numerous authorities, but to this day, he has still not been able to retrieve the money he deposited into the "credit fund."
For about the past five years, this gold and silver business has been producing its own "savings passbooks" and raising capital from hundreds of households in the area. After each time they raise money from the people, the business gives them a "savings passbook".
Many people lost their temper and threatened to vandalize the place, but we were determined to stop them. We must seek justice through other means. I am preparing to go to Hanoi to continue submitting my petition. I believe the law will be fair.
This passbook looks very similar to a savings passbook issued by a bank. It even bears the seal of the Phuc Nhien Gold and Silver Private Enterprise. Initially, this enterprise paid interest regularly. Many families trusted it, and while they didn't need the money immediately, they continued to use the interest to deposit more. However, by the end of 2016, people began receiving information that this enterprise had gone bankrupt.
The case dragged on, with hundreds of households regularly going to the gold shop owner's wife's house to demand their money back and also appealing to authorities for intervention. On numerous occasions, clashes broke out between the residents and the business owner.
According to our investigation, the amount of money this company is accused of embezzling amounts to 30 billion VND. Currently, the assets of the owners of Phuc Nhien company, such as cars and many houses and land plots, have been transferred to other people. However, the couple still lives in this spacious house and uses a car registered under someone else's name.
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| While hundreds of people are suffering, the owner of this gold shop continues to live comfortably in his villa with luxury cars. Photo: Tien Hung |
The entire sum of over 130 million VND that Mr. Le Anh Dao deposited into this business did not belong to his family. It was money his siblings had saved and sent to him to build a house for a younger sister. Mr. Dao has a disabled sister who has no family.
“Some of my siblings live abroad, and some in the South sent money to contribute to building a house for her. At that time, I hadn't planned to build it yet, and I didn't have the money for anything else, so when the gold shop owner encouraged me, I sent it there. Now I've lost my money, and she's declared bankruptcy but still lives in a villa, drives a luxury car, and hasn't faced any consequences,” Mr. Dao said with a sigh of frustration.
According to statistics from the Bao Thanh Commune Police, in just the past three years, nearly 10 cases of illegal lending schemes and loan sharking have occurred in this commune, involving hundreds of billions of dong. Having served as the commune's police chief for over 10 years, and now as the Chief of the Bao Thanh Commune People's Committee Office, this commune is considered a center of illegal lending schemes in Yen Thanh district.
Mr. Vo Trong Nguyen stated
Listing the names of the failed informal lending and loan sharking groups, some of whom have since fled abroad, Mr. Nguyen said that the consecutive failures of these groups began around the beginning of 2016. In the area near the Bong Market gate alone, there were three groups that were formerly involved in informal lending and loan sharking that went bankrupt.
Shortly after Phuc Nhien gold shop declared bankruptcy, Loan Da gold shop, owned by Mr. Tran Van Da and located a few dozen meters away, also unexpectedly announced its bankruptcy. “The couple then fled abroad. The estimated amount is around 30 billion VND. People don't know who to report now, while the couple is still sending money back to their parents to build a house,” Mr. Nguyen said.
Some group leaders have used previous failed informal lending schemes as a pretext to default on payments to members for personal gain. Many group leaders even declared they were "willing to live in shame or exile, or even go to prison for a few years, but would rather not pay the people." Some group leaders used the pretext of declaring a failed scheme to seize people's assets at exorbitant prices, exploiting their fear of losing all their money.
According to our investigation, in the past three years, there have been more than 30 cases of large and small informal lending schemes collapsing in the southern areas of Yen Thanh district alone. While thousands of victims are suffering, filing complaints daily in an attempt to reclaim their hard-earned money, the scheme organizers are living prosperous lives,逍遥 outside the law.