Ezubo is closed
SCMP: Risky business of P2P lending
Authorities in several cities including Beijing and Shanghai seized the assets of Ezubo, which had amassed 73 billion yuan from 4.9 million investors. “It was a narrow escape for me, but I don’t hold out hope of seeing my 20,000 yuan again,” said Zhou. Her friend lost 160,000 yuan as well as his job. ...
... Days after Ezubo’s fall from grace, another online finance company, Dada Group, announced it had halted operations as it too was being investigated.
... Guo Tianyong, a professor at the Central University of Finance and Economics, said the lack of regulation was a major cause of this year’s market disorder and that further fallout could spark investor panic and endanger financial stability. Regulation needed to be improved and a stronger notion of risk instilled in investors, Guo said.
... Under a draft regulation, P2P firms would be defined as middlemen who serve fund borrowers and lenders. This would prevent them from raising or lending funds on their own and from selling wealth management, insurance and trust products.
SCMP: Reform of China’s booming internet financial services comes as fraud cases highlight lack of efficient industry regulation
Mainland P2P lending, in particular, has grown rapidly over the past two years with at least 2,000 firms aggressively expanding their online businesses to cater to the growing demand among both lenders and borrowers.
... Earlier this month it was reported that Chinese authorities have frozen 1.1 billion yuan (HK$1.3 billion) in funds deposited in Citic Bank by P2P online financing platform Ezubo as part of an investigation into alleged violations of banking norms and illegal fundraising. Ezubo is one of the bigger peer-to-peer lenders, with an investor base of 840,000 involving 71 billion yuan of funds sourced online from across the country. Ding Ning, chairman of Ezubo, had been taken into police custody...
Hundreds of clients who lost money with the peer-to-peer (P2P) investing platform Ezubo (e租寶) were taken away by police when they tried to petition for the help of authorities in Beijing, Apple Daily reported Monday.
Ezubo was shut down last month for alleged illegal fundraising, in which nearly a million investors lost their money.
The P2P platform had promised up to 14 percent return on investments.
... About 20,000 petitioners reportedly arrived in Beijing. Police took many away forcefully, the report said.
P2P started just a few years ago
China Daily: Need for risk control in online peer-to-peer lending businesses
Established in 2009 ... Guanqun Chicheng has facilitated nearly 200,000 start-ups and small business to raise funds through its online platform, according to Qian. Total transaction value through its platform has surpassed 30 billion yuan ($4.64 billion) sincelast year.