Companies probed for illegal fundraising involving ¥5b

Writer: Han Ximin  |  Editor: Holly Wang  |  From: Shenzhen Daily  |  Updated: 2021-10-27
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Two companies have been investigated for illegal fundraising involving 5 billion yuan (US$774 million), a circular issued by Futian police Thursday showed.

Binhai (Shenzhen) Enterprise Information Consulting Co. Ltd. illegally raised 2 billion yuan and 39 suspects involved in the case have been arrested.

The company was busted by Guangzhou police in March 2020. Investigations showed that between 2016 and December 2019, the Shenzhen-registered company launched 20 fund management projects and sold more than 30 fund management products through its branches in Liaoning, Jiangsu and Zhejiang provinces, and promised 8 percent to 11 percent annual returns without affecting the principal.

The company evaded supervision, misappropriated the fund in its own fund pool and used new loans to pay for company expenses, old loans and other purposes.

By October 2019 when the company was unable to pay its investors back, it had accumulatively raised 2 billion yuan and owed a total of 1.63 billion yuan to its investors.

Another company, Damailicai Internet Finance Service Co. Ltd., was probed in June. The company, established in 2014, illegally raised 2.984 billion yuan from 68,266 investors. The case was handed over to the Futian procuratorate for prosecution in January this year. On Aug. 20, police issued an online arrest warrant for a suspect surnamed Liu.

Auditing results showed that Damailicai still owed 197 million yuan to 3,055 investors. Police have frozen 618,000 yuan and retrieved 1.31 million yuan through the account specially designated for the crime.

Data showed the company had accumulated 4.97 billion yuan through transactions in the past five years, with a total of 257 million yuan in principal and 13.31 million yuan in interest to be paid.