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September 23, 2016

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EY feels the heat from P2P investors

THE Shanghai office of auditing firm Ernst & Young was surrounded yesterday by angry investors of a peer-to-peer company over its alleged role in a lending fraud.

Amid reports that the owner of Shanghai Uprosper Asset Management Co, operator of the P2P platform Jinxing Investments, had disappeared, making assets worth over 400 million yuan (US$60 million) uncashable, nearly 100 furious investors showed up at the offices of the auditing firm, demanding answers.

Jinxing had claimed that the risk management of their investment products were run by EY, and was under a “strategic cooperation” with the auditing firm.

But on September 9, EY denied that it had ties with Jinxing, or was involved in any auditing procedure of Jinxing’s products. Soon after, Jinxing pulled down the information of its partnership with EY from its official website.

But that did not pacify irate Jinxing investors. A 60-year-old investor surnamed Zhang told Shanghai Daily she wanted some sort of compensation from EY.

“EY promised to give us an answer by September 20, but they did not keep their word,” Zhang said. “We have no option but to look for solutions here and elsewhere.”

EY did not comment on the issue when reached by Shanghai Daily yesterday.

By the end of June, about one third of the nearly 4,000 Chinese P2P platforms have been involved in fraud, according to Online Lending House, a portal site that tracks the sector. The absence of regulation and legitimacy of platforms’ operation are among reasons for the losses.


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