Frauds, scams fuel fear over public funds

What do you do if you fear your fund managers could squander your money? Withdraw it! That's precisely what nine out of 10 depositors in China would like do. But what's the fear all about? Lack of trust! Why? The answer is not difficult to guess after the two huge public fund scandals in Shanghai and Chenzhou, Central China's Hunan Province.

Three years ago, it was found Chenzhou's Housing Provident Fund Center director Li Shubiao had squandered 120 million yuan ($15.5 million) from the fund on gambling in Macao. In fact, he started misusing the money a full five years before he was caught.

Last year's scam in Shanghai was triggered by a public fund scandal, too, in which the local pension fund was illegally "loaned out" to investment companies. Former Party secretary of Shanghai Chen Liangyu was sacked, and a probe ordered against him for his role in the financial scam.