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Kuailu trial ends with mastermind still at large
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The trial of suspects in a 40-billion-yuan (US$5.8 billion) Ponzi scheme that has transfixed the country ended yesterday at Shanghai No.1 Intermediate People’s Court.
Twelve people involved in the Shanghai-based Kuailu finance empire were on trial for two days on charges of fraud and illegal pooling of public savings. The verdict will be announced at a later date.
Prosecutors said Kuailu Investment Group was financially crippled in 2014 and the group’s chairman Shi Jianxiang, who is still at large, conspired with executives to save the business through a Ponzi scheme.
Between March 2014 and April 2016, East Hongqiao Small-Sum Credit Co, a joint venture mainly sponsored by Kuailu, fabricated large amounts of evidence of indebtedness. East Hongqiao Bonding Co, also having close ties with Kuailu, posted guarantees at Kuailu’s request, prosecutors said.
Based on these financial statements, Kuailu’s two main peer-to-peer lending platforms Jinlu Fund and Dangtian Wealth designed financial products and tempted buyers with high returns.
They illegally collected more than 40 billion yuan, but only about 9.8 billion yuan was used in investment. The rest was used to pay earlier investors and staff. Some was spent on the directors’ lavish lifestyles.
Huang Jialiu, chairman of East Hongqiao Bonding Co, and Zhang Lei, chairman of East Hongqiao Small-Sum Credit Co were among the 12 defendants.
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