21 arrested in China over $7.6 billion scam

Beijing, Feb 1: Chinese authorities have arrested 21 people involved in an online finance scheme in which some 900,000 investors lost about 50 billion yuan ($7.6 billion), the media reported on Monday.

The 21 worked for Ezubao, China’s largest such online financing business. The platform was launched in July 2014 by Yucheng Group, which is based in Anhui province, the People’s Daily reported.

After noticing some abnormal activities on the platform at the end of 2015, the authorities launched an investigation into the company. Ding Ning, chairman of Yucheng, and 20 others were arrested on January 14.

Police found that Yucheng and its affiliates did not have sufficient cash flow to operate normally as of December 5. Also, the company had transferred some of its capital and destroyed certain evidence, and some senior people in the company have fled. Many investors were attracted by the high returns Ezubao promised.

The platform offered six investment products, offering annual interest rates of between 9 and 14.6 percent, much higher than for similar products offered by banks. (IANS)