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Wenzhou Merchant's Acquisition of a US Bank Raises Questions

wenzhou merchant acquisition of a US bank raises questions

Recently, the story that Lin Chunping, a Wenzhou businessman, acquires a failed US bank, has been covered by many Chinese media. He is said to be the first Chinese to buy a US bank and the acquisition is reported as a breakthrough of Wenzhou’s private capital seeking an outlet in the financial industry. However, questions are being raised over its authenticity.

According to Lin, an entrepreneur from Wenzhou, he spent USD 60 million last year acquiring Greater Atlantic Bank, a failed bank originally Jewish-controlled in Delaware, and changed its name to New HSBC. The newly-bought bank has been in trial operation since November, 2011 and begun to bring in stable revenue by offering financial services to Chinese living in the local areas.

However, neither Great Atlantic Bank Delaware nor New HSBC can be found at the official websites of FDIC. In fact, most US banks have deposit insurance at FDIC where deposits are covered. According to the FDIC’s system, it does not indicate an active or inactive bank in Delaware by the name of Greater Atlantic Bank. It does indicate, however, a Greater Atlantic Bank in Virginia, but it is no longer in operation as it failed back in 2009. The system does not indicate a bank by the name of New HSBC. Meanwhile, at the official website of the State of Delaware, there is only one bank whose name contains the words of Atlantic and Bank, ALTANTIC BANKING CORPORATION. Unfortunately, it was closed down long ago in the year of 1984. Furthermore, there is indeed an entity registered in Delaware as USA NEW HSBC FEDERATION CONSORTIUM INC with its entity type registered as GENERAL instead of BANK, which means it is not allowed to provide deposit services.

When asked about the details of the acquisition, including the new bank’s actual name, the acquisition agreement or the permit to conduct deposit services in Delaware, Lin always refuses to show related documents, saying they are business secrets.

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