26 face trial in alleged biggest online fraud
Print Edition
CRIMINAL prosecution of 26 people involved in China’s biggest alleged online fraud — a nearly 60 billion yuan (US$8.64 billion) case involving online peer-to-peer lender Ezubao — has started in Beijing, Xinhua news agency said yesterday.
Ten individuals, along with Ezubao’s parent companies Yucheng Holdings and Yucheng Global, are charged with fraudulent fund-raising, Xinhua said. Sixteen other individuals face charges of illegally taking public deposits.
Other charges include smuggling precious metals, illegal possession of weapons and undocumented border crossings, Xinhua said.
Ezubao, once China’s biggest P2P lending platform, allegedly collected 59.8 billion yuan of funds from investors through fake investment projects it advertised on its website and failed to repay 38 billion yuan. It collapsed in February, with executives saying the firm was “a complete Ponzi scheme,” which used investor funds to support lavish lifestyles for its executives.
The alleged scam has put the spotlight on risks in China’s fast growing wealth management product industry. The authorities have since August unveiled new regulations aimed at strengthening the online finance industry. Over 1,700 problematic P2P lending platforms will “have to exit” the market, an official said then.
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