Over US$40m found from Dada fraud
Print Edition
POLICE have recovered more than 260 million yuan (US$40.2 million) in one of the most notorious financial scams involving Dada Group, a spokesman for the economic crime investigation department of Shanghai Public Security Bureau said yesterday.
Dada Group, a Shanghai-based private Internet financial platform founded in 2013, forced employees to buy its own financial products, and the firm needed about 40 billion yuan to make full payment of those products by the time it was shut down.
“The investigation takes time as we are looking into every single investor and company staff, as well as all the financial products,” the spokesman said. “But it is clear that the company is allegedly engaged in illegal fundraising. A plan for a final refund to investors would be based on the sentence made by the court.”
He said the court is expected to deliver its verdict as soon as the end of 2016.
The city government issued 20 rules on Wednesday to “strike firmly against companies on illegal fundraising,” and sources confirmed with Shanghai Daily that the city has suspended registration of investment-related companies amid the crackdown.
Dada was investigated by the police in December for allegedly running a Ponzi scheme to raise money from investors.
An earlier crackdown involved Ezubao, one of China’s fast rising online peer-to-peer lending platforms. Ezubao had lent nearly 50 billion yuan via its financial products, which caused nearly 900,000 investors to lose their life savings.
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