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16-07-2018, 06:24 PM
Investors left to rue losses as fraudulent Chinese P2P lenders collapse in tighter regulatory environment
Tightened regulation and a liquidity crunch lead to spate of P2P platform collapses affecting hundreds of thousands of small investors across China
Yujing liu
PUBLISHED : Monday, 16 July, 2018, 8:03am
UPDATED : Monday, 16 July, 2018, 11:33am
Gao Bin lost his family’s life savings when Chinese online micro lending platform Tangxiaoseng collapsed in June. The 43-year-old auditing director and his wife had invested 860,000 yuan (US$129,000) in the peer-to-peer lender, only to discover on June 18 he could not withdraw his investment. He later found out the company had been placed under investigation two days ago for “illegally absorbing public deposits”.
Tangxiaoseng, which in theory matches investors with borrowers of small loans, had said it had accumulated a transaction volume of more than 80 billion yuan (US$11.96 billion).
“I couldn’t sleep for three straight days. It’s a huge blow to my entire family,” said Gao, a resident of eastern China’s Suzhou city. He said he had planned to use the funds to pay for his cancer stricken mother’s treatment and finance a down payment for a flat.
The Shanghai police said on Saturday it had detained Tangxiaoseng’s legal representative, Tao Lei, for issuing illegal wealth-management products and offering return rates ranging from 5 to 15 per cent a year. A total of 38 billion yuan in funds were involved in the fraud.
Spate of collapses
Hundreds of thousands of small family investors across China have had their fingers burnt over the past few months, which have seen a spate of P2P platform collapses. The industry has of late come under intense pressure because of tightened regulation and a liquidity crunch.
A total of 63 P2P lenders reported issues with liquidity and suspended fund withdrawal in June, up from just 10 in May, according to Wangdaizhijia, a data provider on China’s online lending business. Another 17 quit businesses voluntarily, and together these 80 platforms owed 3 billion yuan in outstanding loans.
More details in https://www.scmp.com/business/companies/...s-collapse
Tightened regulation and a liquidity crunch lead to spate of P2P platform collapses affecting hundreds of thousands of small investors across China
Yujing liu
PUBLISHED : Monday, 16 July, 2018, 8:03am
UPDATED : Monday, 16 July, 2018, 11:33am
Gao Bin lost his family’s life savings when Chinese online micro lending platform Tangxiaoseng collapsed in June. The 43-year-old auditing director and his wife had invested 860,000 yuan (US$129,000) in the peer-to-peer lender, only to discover on June 18 he could not withdraw his investment. He later found out the company had been placed under investigation two days ago for “illegally absorbing public deposits”.
Tangxiaoseng, which in theory matches investors with borrowers of small loans, had said it had accumulated a transaction volume of more than 80 billion yuan (US$11.96 billion).
“I couldn’t sleep for three straight days. It’s a huge blow to my entire family,” said Gao, a resident of eastern China’s Suzhou city. He said he had planned to use the funds to pay for his cancer stricken mother’s treatment and finance a down payment for a flat.
The Shanghai police said on Saturday it had detained Tangxiaoseng’s legal representative, Tao Lei, for issuing illegal wealth-management products and offering return rates ranging from 5 to 15 per cent a year. A total of 38 billion yuan in funds were involved in the fraud.
Spate of collapses
Hundreds of thousands of small family investors across China have had their fingers burnt over the past few months, which have seen a spate of P2P platform collapses. The industry has of late come under intense pressure because of tightened regulation and a liquidity crunch.
A total of 63 P2P lenders reported issues with liquidity and suspended fund withdrawal in June, up from just 10 in May, according to Wangdaizhijia, a data provider on China’s online lending business. Another 17 quit businesses voluntarily, and together these 80 platforms owed 3 billion yuan in outstanding loans.
More details in https://www.scmp.com/business/companies/...s-collapse
Specuvestor: Asset - Business - Structure.
