Quick Take: Executives of Shanghai P2P Lender Subsidiary Out of Contact
A major industry body overseeing asset managers says it is unable to contact executives of a key unit under Shanghai Kuailu Investment Group, a financially crippled P2P lender.
The Asset Management Association of China (AMAC) said recently that Shanghai Oriental Hongqiao Financial Holding Group Co., a private equity firm controlled by Kuailu, is among the 17 asset management firms with which the association has lost contact.
Kuailu is a Shanghai-based company that offered a wide range of financial services from peer-to-peer loans to private equity investment. It had raised some 14 billion yuan ($2.12 billion) from mostly retail investors between 2014 and 2016, promising them higher-than-average returns. But later the company ran into financial difficulties and stopped paying returns in mid-2016.
In September last year, police raided Kuailu’s Shanghai offices, arrested five people on suspicion of illegal fundraising, and seized some documents for further investigation. Police also said they would urge the company to meet its financial obligations.
Sources told Caixin that Shanghai Oriental Hongqiao holds a majority of the Kuailu Group’s high-quality assets, including stocks and private equities.
Investors in Kuailu have been hoping to recoup their unpaid returns by potentially liquidating these high-value assets, the sources added. One of these investors is a financial unit of Suning E-commerce Group Co., which has submitted a request to a local court in Nanjing to freeze or liquidate Kuailu’s assets as debt repayment. The court supported Suning’s claim, but so far it hasn’t executed the order, Caixin learned.
Contact reporter Leng Cheng (email@example.com)
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