Chinese Businessman Wanted for Embezzlement Arrested in Vietnam

The recent arrest of Chinese businessman Ai Shaoyuan in Vietnam has once again exposed significant multimillion-dollar investment fraud within China. Ai, formerly deputy general manager of Zhejiang Busen Garments Co. Ltd. (002569.SZ), is accused of orchestrating a scheme that defrauded around 400 investors of 1.2 billion yuan (approximately $165.8 million). Employees of a privately controlled investment management company and a regional commercial bank are suspected to have collaborated in the embezzlement, alongside another related case involving 3 billion yuan of non-performing debt investment products. [para. 1][para. 2]

Thirty-five-year-old Ai fled China after the scheme was uncovered in 2023 and was subsequently wanted by Chinese authorities. Last month, he was arrested in Ha Long city, Quang Ninh province, Vietnam, on charges of misappropriating assets and has since been deported back to China. [para. 3]

Victims of the 1.2 billion yuan scam were mostly Chinese investors who believed their money was being placed into agreement deposit accounts at two sub-branches of Chang’an Bank Co. Ltd. in Baoji, Ai’s hometown. These products were sold through Shassel Investment and managed by Zhejiang Youce Investment Management Co. Ltd., both reportedly controlled by Ai’s long-time associate Huang Wei, whose current whereabouts are unclear. Some say Huang escaped to Japan, while others claim he was detained by Chinese police. [para. 4][para. 5]

The investments, funneled into 11 private funds launched by Youce Investment between 2018 and 2023, were illicitly transferred out of the bank accounts to entities linked to Ai. Substantial portions of the funds went to his holding company, which had acquired shares in Zhejiang Busen in 2021, with Ai taking a leadership role in the business until his resignation in February 2024. [para. 6]

Additionally, another 3 billion yuan in problematic investment products—tied to bad loans at Chang’an Bank—were also distributed via Shassel Investment and have connections to Ai. A portion of the raised funds reportedly ended up in Ai-controlled companies. [para. 7]

Testimonies from multiple investors revealed Ai’s close connection with Sun Junrang, then-president of the Baoji branch of Chang’an Bank, who was removed from his post in January 2024. Investors were assured their investments would yield higher-than-average returns, owing to the “special relationship” Shassel’s leadership had with the bank. [para. 8][para. 9]

Specifically, the scheme revolved around “agreement deposits”—specialized high-interest bank accounts intended for institutional clients, which are customarily protected by restrictions such as the absence of online transfers and third-party custodianship to prevent misuse. In this case, however, these controls were bypassed, allegedly allowing the fraudulent transfers. [para. 10][para. 11]

Baoji police investigations discovered that after the bank accounts were improperly enabled for online transfers, the funds were moved to three investment firms connected to Ai and his associates. Some money was misappropriated by unnamed local companies, and other amounts went to Huang’s Shassel Investment. The fraudsters managed every step of this operation, from issuing the funds to the illegal transfers. [para. 12][para. 13][para. 14]

Chang’an Bank has denied any wrongdoing, maintaining it followed legal procedures, while Haitong Securities, a custodian for the funds, contests having authorized these account changes. In light of investigations, Baoji police decided not to pursue criminal action against Chang’an Bank, a stance echoed by the National Financial Regulatory Administration, which, while noting weak internal controls, found no evidence of direct fund misappropriation. Only regulatory penalties were imposed. [para. 15][para. 16][para. 17]

Currently, the case remains unresolved from a legal and regulatory perspective. Investors hope Ai’s arrest might facilitate the recovery of lost funds. [para. 18]