Scam leader’s peacocks and fountains
Print Edition
THE alleged mastermind of a scam which cost Chinese investors hundreds of millions of dollars lived in a penthouse flat featuring peacocks and fountains, reports said yesterday after he was paraded on television confessing.
Xu Qin, described as the “controller” of Zhongjin Asset Management and its linked companies, was among 35 executives and employees formally arrested last week in connection with the scheme, Shanghai’s Dragon Television reported at the weekend.
It owes more than half its 25,000 investors a total of 5.2 billion yuan (US$800 million), said the broadcaster.
Xu, 35, was shown saying that the firm “paid back previous investors’ principal and interest with money from new investors.
“It is actually a typical Ponzi scheme,” he admitted.
He squandered around 500 million yuan of investors’ money on luxury houses and cars with his wife, the report alleged.
Xu and his wife rented a 1,200-square-meter penthouse at one of China’s most expensive developments, Tomson Riviera in Shanghai, where he raised peacocks and built fountains in his living room, yesterday’s Jiefang Daily reported.
The case is the latest financial fraud to emerge as China’s economy slows. In a recent scandal, peer-to-peer lending firm Ezubao conned 900,000 investors out of US$7.6 billion by offering high interest rates which it was unable to pay, in what one executive described in a televised confession as a “typical Ponzi scheme.”
Police previously said Xu registered more than 50 subsidiaries and controlled 100 linked companies. He was detained with other executives in Shanghai last month as he attempted to fly to Italy.
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