By Cai Siyun
A civil ruling recently released by China’s Supreme People’s Court has once again drawn attention to a financial case involving the disappearance of investment funds totaling 180 million yuan (approximately USD 25 million). In its latest response, Dalian Bank stated that the suspect responsible for the wealth management product has gone missing, triggering widespread public criticism.
According to reports by mainland Chinese financial outlets including Sina Finance and Guancha, the case dates back to December 2013, when a Beijing notary office signed a Corporate RMB Bank Settlement Account Management Agreement with the Beijing branch of Dalian Bank, opening a corporate settlement account to hold notarization service fees.
Over the following three years, the notary office transferred a cumulative 360 million yuan into the account through 16 transactions from other banks. During this period, a series of operational practices by Dalian Bank’s Beijing branch laid the groundwork for subsequent fund misappropriation.
After the account was opened, a relationship manager surnamed Li at the Beijing branch was assigned to liaise with the notary office. Every quarter, Li personally delivered account statements and related documentation to the notary office’s finance staff for reconciliation. Until 2018, these statements—each bearing the bank’s official seal—consistently showed the account status as “normal,” with balances and interest calculations appearing accurate, effectively concealing abnormal fund movements.
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
Funds diverted to nine companies
Reports indicate that as early as January 2014, unauthorized fund transfers had already occurred without the notary office’s approval. By September 2017, funds in the account had gradually been diverted to nine affiliated companies, as well as to personal accounts held by individuals surnamed Luo and Huo. Luo previously served as a senior business executive at Dalian Bank’s Beijing branch, while Huo was identified as his mother. The flow of funds was directly linked to internal bank personnel.
As of Sept. 7, 2017, the actual balance of the account had fallen to just 448,296.25 yuan (approximately USD $62,000). After that date, there were virtually no transaction records. The notary office remained unaware of the situation.
On June 21, 2018, relying on falsified account statements provided by the bank, the notary office confirmed that the principal and interest in the account totaled more than 180 million yuan. On June 29, it signed a Corporate Wealth Management Product Client Agreement with Dalian Bank’s Beijing branch, using the full amount to purchase the bank’s “Pearl” Monthly Yield corporate wealth management product. The agreement bore the stamped name seal of Luo. As with earlier documents, the paperwork was delivered in person by Li and was not processed through the bank’s counter under standard procedures.
When the wealth management product matured, Dalian Bank’s Beijing branch failed to redeem either the principal or the expected returns. After repeated but unsuccessful attempts to communicate with the bank, the notary office discovered that the funds had effectively vanished. It subsequently filed a lawsuit, demanding repayment of principal and interest as well as compensation for losses, with claimed damages provisionally exceeding 200 million yuan (approximately USD 28 million).
During the first-instance trial at the Beijing Financial Court, both sides engaged in intense evidentiary disputes. Judicial appraisal results further exposed critical irregularities. Thirty-two interest receipts, 19 account statements, and the bank seals on the wealth management agreements submitted by the notary office were all found to be forged. Meanwhile, documents submitted by Dalian Bank relating to online banking activation and account changes showed that the signature of “Liu,” the notary office’s accountant, had been impersonated. However, the notary office’s official seal and legal representative’s seal were verified as authentic, corroborating a pattern in which the suspect assumed another person’s identity and fabricated documents.
In response, Dalian Bank’s Beijing branch denied the authenticity of the relevant evidence, claiming that the seals on the wealth management documents and account statements were forged. It further argued that the case involved serious criminal conduct and that the civil dispute and alleged criminal offenses arose from the same set of facts. On this basis, the bank invoked the principle of “criminal proceedings before civil litigation,” requesting dismissal of the lawsuit and transfer of the case to public security authorities.
Beijing High People’s Court dismisses claims
During the proceedings, the bank stated that Luo had become mentally ill and had gone missing, and that relationship manager Li had already left the bank. Both the Beijing Financial Court at first instance and the Beijing High People’s Court on appeal accepted the bank’s arguments and ruled to dismiss the notary office’s claims, leaving the case at an impasse.
That situation changed only after the Supreme People’s Court ordered a retrial. The top court overturned the first- and second-instance rulings and instructed the Beijing Financial Court to conduct a substantive hearing. The retrial decision clarified that banks cannot evade their statutory duty to safeguard client funds by invoking the “criminal before civil” principle, setting a clear direction for subsequent adjudication.
As of now, the Beijing Financial Court has yet to issue a substantive judgment. The retrial ruling has nevertheless become a reference case in disputes involving overlapping civil and criminal financial issues, directly highlighting accountability failures in bank fund supervision.
Public reaction has been harsh. Online commentators wrote: “Dalian Bank’s credibility has collapsed.” “After this, who would still deposit or invest money there?” “Withdraw your funds immediately—don’t leave a single cent.”
Others warned that whether depositing or investing, transactions should always be handled at bank counters rather than through offline dealings with individual staff. Some observers added that if even a notary office could suffer such losses, it would be even more difficult for individual clients to defend their rights.
