Unlucky investors recoup principal
INVESTORS that lost money in a wealth management product sold in Hua Xia Bank have recouped their principal amount from the credit guarantee company, a local TV station reported yesterday.
Investors who thought they would lose all their money in the defaulted investment product have recently recovered their principal after Zhongfa Investment Guarantee Co stepped in to acquire the whole investment plan, Shanghai TV station said.
Beijing-based Hua Xia Bank blamed a former staff at a Shanghai branch for selling the high-yield wealth management product without permission, which involved a total of 100 million yuan (US$15.9 million).
Regulators are still investigating other bank staff and have ordered them to return commissions for selling the unauthorized product, Shanghai TV said.
Zhongfa had previously said it would not cover losses if the case involves criminal activity after Hua Xia said last December the products distributed by a third party were suspected of violating the law, and the police were already involved.
However Zhongfa said earlier this month it would settle its guarantee obligation.