Latest P2P Failure Sees 53 People Handed to Prosecutors
Shanghai police have handed 53 people to prosecutors on potential fraud or illegal deposit-taking charges, after the asset manager they work for failed to repay billions of dollars owed to investors.
Shanghai-registered Shanlin Jinrong stands accused of illegal fundraising for selling fake wealth-management products that promised above-average returns. The now-shuttered company previously operated four online investment platforms and 1,120 offline branches in 29 provinces, police in Shanghai’s Pudong New Area said in a statement on social media (link in Chinese).
The company is suspected of illegally raising 73.6 billion yuan ($10.7 billion). Investors are still owed 21.3 billion yuan in principal, following the surrender of company founder Zhou Boyun to police in April.
On Sept. 20, Shanghai police handed over 12 people to prosecutors, including Zhou, the company’s controller and legal representative, and Tian Jingshen, its CEO, for possible indictment on fraud charges. Another 41 were handed over to the People's Procuratorate of Pudong New District for possible indictment on charges of illegally taking public deposits.
Prosecutors are reviewing the cases and will decide whether to press charges.
By the time Zhou turned himself in to police in April, his company had used most of the more than 73 billion yuan it raised to pay back earlier investors, a practice often known as a Ponzi scheme. Some funds were also used to pay for lucrative commissions, expensive office space, advertisement campaigns and lavish personal expenses, according to the police statement.
By Sept. 20, Shanghai police had recovered about 1.5 billion yuan in cash and frozen related bank accounts and assets.
Shanlin Jinrong’s downfall adds to the country’s long list of Ponzi schemes and illegal fundraising activities that have made news since 2015. In one of the largest, authorities shut down Ezubo, one of the country’s biggest peer-to-peer (P2P) lenders, in December 2015. Investigators later found that the platform had bilked 900,000 investors across China out of more than 50 billion yuan.
In July, the controller of Shanghai-based investment company Zillion Holdings fled the country after illegally raising over 38 billion yuan through P2P lending platforms and other outlets, local police have said.
Chinese regulators have identified the scandal-plagued P2P lending industry as source of financial risk. They have recently stepped up their crackdown on the sector to protect the country’s mom-and-pop investors who are often lured by the promise of returns much higher than bank deposits.
Contact reporter Charlotte Yang (email@example.com)
Nov 19 17:23
Nov 19 16:25
Nov 19 15:34
Nov 19 15:00
Nov 19 14:44
Nov 19 13:42
Nov 19 10:49
Nov 19 02:18
Nov 18 18:34
Nov 18 18:06
Nov 18 15:37
Nov 18 14:03
Nov 18 14:12
- 1Two Persons Diagnosed With Pneumonic Plague in Beijing
- 2In Depth: Southeast Asia Becomes Region’s Next Tech Battleground
- 3U.S. to Extend Huawei Reprieve by Allowing It to Continue Trade With U.S. Clients: Report
- 4Beijing Plague Patients Were Medical Transfers, Further Cases in Capital Unlikely: Officials
- 5Top Bank Regulators Move to Defuse Jitters After Two Bank Runs
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas