Controversies

Luzhou Laojiao’s RMB 150 Million Bank Deposit ‘Missing’ Case

In October 2014, Luzhou Laojiao announced that its RMB 150 million deposit at the Agricultural Bank of China Changsha Yingxin Sub-branch was at major risk and that the funds had been transferred out by criminals. Investigation found that principal culprit Yuan Jianming transferred the funds through fraud and by bribing bank staff, and he was sentenced to 17 years in prison. The incident exposed gray operations in which liquor companies and banks “paired up” to attract deposits and used high interest and interest subsidies to solicit deposits. As of 2020, only about RMB 20.24 million had been recovered; the Supreme People’s Court’s final ruling determined that ABC Changsha Yingxin Sub-branch bears 40% and Hongxing Sub-branch 20% of the compensation liability, with the remaining losses borne by Luzhou Laojiao itself.