Three P2P Finance Companies Goes Bust, Boss Behind All Three Flees

There's a pattern of tighter credit in China.......and also of fraud cases picking up.

First some P2P stories in chronological order:
China Focus: Supervision urged for P2P lending as risks loom
Peer-to-Peer Lending: Ready to Grow, Despite a Few Red Flags
Parent firm of P2P lender raises $130m in first financing round
Bubble Fears Fail to Thwart Investment Into Chinese P2P Lenders
China's Peer-To-Peer Lending Bubble Bursts As Up To 90% Of Companies Expected To Default
Reversal of fortune in China’s peer-to-peer lending boom

And now this story out of China: First Case of Network Finance in 2014: Three Firms Go Bankrupt, Bosses Flee (2014网贷首案:三平台倒闭 老板疑跑路)

There are not hits in English for the boss, Zheng Xudong.

Yesterday (January 20), a number of investors net loan platform to the "Daily Economic News" reporter to reflect national clinical venture in Hangzhou, Shenzhen loan-letter invasive, Shanghai Feng Yi Shun vote online P2P lending platforms such as three recently Meanwhile collapse. Investors said the actual control of the company above three platforms are the same person, named Xu-Dong Zheng, Xu-Dong Zheng escaped and fled to Hong Kong after the current disappeared. Venture Hangzhou National Pro recently released announcements, Xu-Dong Zheng Pro for the country's actual control of the venture capital people.

In addition to these three platform companies, as well as being involved in the Chinese culture and Rueilong Property Exchange Trust Asset Management Limited. Reporters learned that the police in Shenzhen Loan A letter has been filed, the Hangzhou National Pro will soon venture into the filing process, and Shanghai Information Investment Feng Yi has not yet filed a timetable. For Xu-Dong Zheng whether actual control several other companies, along with the police for further investigation of this case, the answer is revealed, or will in the near future. Yesterday, reporters call the Hangzhou National Pro Ventures announced Xu-Dong Zheng's phone, but the phone was not connected.

P2P P2P platform collapse seems to have become a platform for the ultimate expression of investment risk. However, there is still relatively rare in the closure of three platforms at the same time. According to investors on the amount of funds above three platforms run by volume of at least 100 million yuan or more.

Gregory as bait to defraud

A "on a Chi Tak and Xu-Dong Zheng report suspected fraudulent fund-raising materials" shows Hangzhou National Pro VC (Hangzhou West House initiated the establishment of e-commerce Co., Ltd.) as the legal representative of Chi Tak, which is the actual controller or his friends Xu-Dong Zheng , opened in June 2013 "National Pro Ventures" Network P2P lending platform by "Shenzhen Rueilong Trust Asset Management Co., Ltd." on the loan contract 100% of principal and interest guarantee. High interest rates as bait, using the Internet for fund-raising activities targeting fraud without specific users, fraud amount of up to 30 million yuan or more.

At the same platform as the legal representative of the actual controller Chi Tak and Xu-Dong Zheng virtual borrowers with high interest monthly standard allegedly lured the victim to lend many venture capital investor Pro emerald beauties asset package intended to share mortgage standard, these funds go directly into the annals of German or Xu-Dong Zheng's personal account, by its illegal occupation.

"Daily Economic News" reporter yesterday noted from the Hangzhou National Pro Venture emergency notification website on the 16th sent the message, "Due to the effective control of the platform suddenly unable to contact people Xu-Dong Zheng, resulting in rupture of funds platform, resulting in a large number of investors can not withdraw cash. knowledge of the platform staff family members and friends a lot of money quilt Individually we will actively cooperate with relevant departments for investigation. immediate effect cease all prepaid platform and tender and other activities, please spread the investors. "Subsequently, the reporter call the Hangzhou National Pro Chong Investment hotline no answer.

Wang Ming (pseudonym) told reporters that he was the Provisional National Venture through Hangzhou, the official second group QQ group (group number: 26424836, which is now being canceled) understand the way the Hangzhou National Pro venture net loan platform. During the primary and the manager of the Hangzhou National Pro VC Chen Guohua, customer service, and Chen Ningning, who to contact customer service via the Hangzhou National Pro VC et al publicity, understand cultural property assets pledged standard package, referred to the text submitted marked a period of ranging from one month to four months, and have promised to protect the principal platform overdue advance, to ensure that the investor's financial security through the official website and staff to ensure the safety of funds and to encourage bidding. He then invested a total of $ 200,000, about 20% per annum, mainly for investment platform provides Chui package intended to share the beauties of assets pledged standard investment limit a month, two months, four months.

"I never expected that around 17 January 2014 platforms can not mention now, while its official website simply out of the emergency notification official website QQ group disappeared, website legal representative, general manager, operations, finance and all the staff, QQ cable, phone unable to connect, the site can not expire mention now. investors like me, there are about one thousand, distributed throughout the country. "Wang told reporters sigh.

Three platforms traced to collapse

Hangzhou National Pro VC investors told reporters after the investment in the platform, in addition to interest, there are certain incentives, a fund finally gain up to 40%. Almost at the same time, investors in mortgage letter Shenzhen Chong platform also told reporters that the platform around January 15 will not be able to cash up; Shanghai Feng Yi Shun voted investors also said that at around the 16th will not mention now.

Shanghai Feng Yi Shun Li Yang Investment Investors (a pseudonym) told reporters that he saw in the September 2013 letter about Feng Yi cast ads, then check the registration of the company, that the company pay all cooperation with the Chinese culture, it is more than a trust, the interest rate of the platform at about 20%, "It is understood that funds to finance major lending platforms such as artwork or restaurant demanders, but in January 15, it exposed the platform is Xu-Dong Zheng's One platform, then there is investor withdrawals can only mention a twenty thousand, January 16 some people went to the company, found that the company has closed. "

These three platforms in the company's investors have found an interview with reporters, Xu-Dong Zheng is the actual control of the three platforms. It also involves the Chinese culture and the Rueilong Property Exchange Trust Asset Management Limited.

In addition to the Hangzhou National Pro Ventures announced the Xu-Dong Zheng official website for actual control of the platform, but several other sites were not publish a statement. So, why investors agreed that the "disappeared" of Xu-Dong Zheng is above five companies control people?

According to the letter while the credit record, Mary Feng Yi Shun cast investments (a pseudonym) told reporters that she has invested one million yuan in the two platforms, the reason for investing in these two platforms at the same time, because before have friends in front Yi SII, and she knew the owner of the two companies is Xu-Dong Zheng.

Li Yang told reporters, director of operations at the platform, they can not withdraw cash to Shanghai Feng Yi Shun cast made a phone call, operations director Feng Yi letter also told them to vote for the boss Xu-Dong Zheng.

The police have been involved in cases

Meanwhile, the reporter also noted that the Internet, there are users post, said, "China's first net mortgage fraud" case exposure, "the primary responsibility Xu-Dong Zheng on January 16, 2014, Hong Kong has exit (Exit-Entry Administration Department has been verified), currently people in China, Hong Kong or turn on his country to be closed, ending at 13:00 on January 18, 2014, internal staff and the sites to be closed Comprehensive statistics: A letter of credit (75 million), Hangzhou National Pro VC (89 million), Shanghai Feng Yi (67 million), Wen Exchange (440 million). concerning the subject matter of the text submitted by Emerald, confirmed by the interior, all offering 10 Emerald subject matter and not made more than 50 pieces of jade products currently in the custody of the text submitted by the warehouse Please keep in front of people to come forward after a report by the public security and all the money goes all platforms Trust Company, a trust company is mainly responsible for human Zheng himself, surnamed Zhu finance their relatives. platform for all transactions related to mention removing all foreign cash into the trust funds Culture Exchange daily for gold, the text submitted by the issuing of the funds into the purchase of jade, etc. In addition to the subject matter, but has been diverted to other uses. "

According to investors on the above-mentioned "trust" refers to the Rueilong Trust Asset Management Limited, but these three platforms may not be swept away so much money, but also at least 100 million yuan or more.

Subsequently, the reporter call the company hotline number above its confirmation, no turn, provide investors with relevant contact phone companies are also three platforms were not called. Reporter access to websites of several companies public information found on the association's business does exist.

August 28, 2013, the Hangzhou National Pro Ventures announced that the House Commerce Co., Ltd. Hangzhou West and China Cultural Property Exchange formal cooperation, Hangzhou National Pro Venture Exchange to become China's first provincial-level cultural property agents, upcoming Offering art share of assets pledged standard package. According to the investor presentation, the mortgage and municipal agents Feng Yi is the Chinese cultural property exchange. The above three platforms signed a strategic cooperation agreement with Rueilong Trust.

For the relationship between several companies and investors to the "Daily Economic News" reporter, said Xu-Dong Zheng emerald in the name of investment, the establishment of the Chinese Cultural Property Exchange, the so-called top-emerald works by shares in exchanges of cultural property transactions. States also set up a temporary venture in Hangzhou, several P2P network investment platform, on the platform of high interest rates to attract investors' attention, and to raise a lot of money, and the money deposited in the so-called third-party "Shenzhen Rueilong Trust Asset Management Ltd. "hosted.

Yesterday, reporters at the Chinese Cultural Property Exchange Online noted that its announcement that: "Given the recent trend of each asset in the disk pack more extreme, to ensure the safety of funds investors, safeguard the interests of investors, we have decided with immediate effect to all listed Trading assets packets stop plate rectification and suspend all upcoming asset package listing plan. "

Yesterday reporters the company through several platforms seat Economic Investigation Team has learned that the police record the letter of credit in Shenzhen has opened investigations Hangzhou country is about to venture into the Pro filing process, and Shanghai Information Investment Feng Yi has not yet filed a timetable. With timely intervention police believe the relationship soon Xu-Dong Zheng and these companies will get to the bottom.

Credit risks of P2P networks

P2P network platform lending risk has always existed, why has someone become a victim of this risk? "Daily Economic News" reporter learned in the investigation, all investors are aware network platform is very risky, but no match for the temptation of high interest rates. Although some investors to determine the safety of the investment platform through the "micro test the water", but this trick does not seem loose.

Loan letter invasive, Shanghai Feng Yi invested nearly a million letters cast in Shenzhen Mary told reporters that she started it invested tens of thousands, as interest rates be honored, she will "brake car" and then put in nearly Wan. "Do not know how? Vietnam to end the more you want to vote, just head is filled with the same." Mary ruefully told reporters.

The above three net loan how qualitative platform event remains to be police intervention. But talking about the platform running, the industry also has an industry of "helpless." A P2P company who recently to the "Daily Economic News" reporter revealed that the current net loan want to do a large-scale platform, will raise funds to come in, but it is also a risk to the platform, once the funding needs can not be found on will result in idle funds. A large net loan company to raise a lot of money, in the case of capital requirements were not found even carried Basin investment.

Financial analysts, risk management division Dongxiu Sheng said that from the point of view of investors described above three P2P network platform may belong to self-prime financing platform, only dressed P2P coat. "Normal P2P platform for borrowers description is very clear, but also allow investors to easily generate a sense of trust."

In Mary appears that these new open net loan platform more secure, not so fast collapse, so she invested these two platform company. In this regard, Dongxiu Sheng clear: "In my opinion, relatively long duration, made more than two years and won venture capital, risk control team had net loan platform is relatively safe.

For P2P net loan industry, why risk frequent, Chinese microfinance League Secretary Bai Chengyu told reporters that in recent years the development of a larger non-formal relationship with the P2P platform. "Now these domestic lending platform P2P networks, there is a big risk that funding needs through pass-through trading websites are not paid directly with lenders if the parties to the transaction direct payments, these sites will be able to reduce risks, to avoid incidents on foot. Actual on the realization of investors and lenders direct payments is entirely possible. "But Bai Chengyu said that if customer funds without a net loan platform, the platform also unprofitable.

Bai Chengyu said that now is not the P2P network intermediary lending platform, a "network" version of private lending. So, investors want to engage in private lending, you have to consider carefully the individual must be prepared to take risks. "In this remind investors that, in this non-standard environment, the platform can be utilized once the net loan customer funds, it will allow criminals from taking advantage, so investors into a Ponzi scheme, so investors should be cautious to whom. "

Wenzhou SME Development Association president Zhou German think, P2P is the online credit and the credit itself is a high-risk industry, banks have various mechanisms to prevent risks, but still there will be so many non-performing loan ratio, the more risk on the network difficult to prevent. If you are offline, you are face to face, but also to investigate his information. On the network, P2P platform is easy to fake, the unit is easy to build a platform onto the illegal road. If not standardized, it will lead to bigger problems.

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