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September 14, 2016

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Home » Business » Finance

Shanghai police step in to probe Kuailu

By Cho Rei | September 14, 2016, Wednesday | Print Edition

SHANGHAI police are investigating two crippled online peer-to-peer lending platforms affiliated to Shanghai Kuailu Investment Group on suspicion of illegally pooling of public deposits, police in Changning District said on its official Weibo account.

“The two lending platforms, Jinlu Fund and Dangtian Wealth, are suspected to pool funds from public investors without legal operational certificates,” said Changning police said in a notice yesterday.

“The police will take coercive measures against people in charge and urge the mother company Kuailu Investment Group to fulfill its obligations.”

The Shanghai-based private company has been involved in a cash redemption crisis since the start of 2016. The firm used investors’ funds to finance the Ip Man 3 movie but was alleged to have used the money on other investments which did not generate good returns. It then allegedly came out with fradulent box-office receipts for the movie, media reported.

When investors found out about the so-called fake box-office receipts, there ensued several rounds of public battles between them and the company over a repayment plan. Kuailu then agreed to pledge at least 3 billion yuan (US$449 million) of assets as collateral to pay back the investors from October 1. But last week the company breached this deal, further igniting investors’ fury, media added.

Kuailu sold wealth management products at a high 10 percent annual return, said Xinhua News Agency in January.

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