China urges investors' claims against shut P2P lender

GMT 12:04 2016 Sunday ,14 February

Arab Today, arab today China urges investors' claims against shut P2P lender

Police shut down Ezubao in December and state media earlier this month
Shanghai - AFP

Chinese authorities have urged investors to register their claims against a now shut peer-to-peer (P2P) lender allegedly behind the country's biggest ever Ponzi scheme, according to a statement, raising hopes of compensation.

The Ministry of Public Security, or police, on Saturday called on investors in the financial products of Ezubao -- which allegedly bilked 900,000 people out of 50 billion yuan ($7.6 billion) -- to provide their personal information through a newly established online platform.

The ministry would collect the information until May 13, using it to assist in the investigation and as a "reference for return of funds", according to the statement.

Police shut down the company in December and state media earlier this month paraded some of the 21 arrested executives involved with Ezubao and its parent firm Yucheng, saying their platform was a fraud.

The scandal has highlighted poor regulation in the world's biggest P2P market but also how Chinese investors fail to recognise financial risk.

Claimants were invited to submit their information electronically given the large number of investors spread over a wide geographical area and involving a massive amount of data, the statement said.  

But some investors voiced scepticism about the government's motives, with one saying she feared authorities might use any information against her for participating in what the police statement called "illegal fund-raising".

"They called it illegal fund-raising and if I register, I'm the one who was doing that," Wang Dehong, who lost 180,000 yuan, told AFP.

Police said the government would "protect the legal rights of investors".

The collapse of the company has already sparked protests, which the government typically fears out of worries over social unrest.

China has nearly 2,600 platforms described as P2P businesses, according to one industry estimate, with transactions valued at around $150 billion last year.


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