UCF Pay.Com Confirms Embezzlement of USD$211.26 Million in Payments Deposits


A leading payments provider in China has confirmed the embezzlement of 1.493 billion yuan (approx. USD$211.26 million) in payments deposits made by clients.

Chong Sing Holdings FinTech Group (中新控股), the parent company of payments platform UCF Pay.com (先锋支付), issued a public statement on 17 June confirming that UCF’s deposits had been embezzled by Beijing Jingxun Shida Tech Co., Ltd. (北京经讯时代科技有限公司).

According to Chong Sing the amount withdrawn by Beijing Jingxun exceeded its deposits, with the embezzled sum totalling 1.495 billion yuan.

Beijing Jingxun was one of UCF’s customers, with UCF providing it with fund top-ups and payments services.

Beijing Jingxun itself is a fintech firm established in June 2014, with its business scope encompassing tech development and consultancy, and IT outsourcing services as entrusted by financial institutions.

The announcement by Chong Sing arrives following the launch of on-site inspections of UCF by government authorities in July 2019, leading to the suspension of its operations.

Chong Sing said that an IT audit report from 24 March 2020 found that UCF’s payments equipment did not suffer from any major defects, and that it believed that the embezzlement was the result of system’s defects.

Chong Sing instead suspects that the embezzlement was the result of “inappropriate amendment” of computer codes by members of senior management.

The embezzled funds were mainly sourced by Beijing Jingxun from UCF’s reserve payment funds, as well as funds for several institutions.

According to Chong Sing there is no equity relationship between UCF and Beijing Jingxun.

A source said to National Business Daily that the release of the public announcement by Chong Sing “at least indicates that UCF Pay.com had major regulatory breaches with regard to their deposit fund management.”

The source pointed out that even though Beijing Jingxun was a customer of UCF and there was no equity relationship between them, the actual controller of Beijing Jingxun was Zhang Zhenxin (张振新), who is also the actual controller of UCF.

Before passing away on 18 September 2019, Zhang was the actual controller of Xiangfeng Share Control Group Company (先锋控股集团有限公司), of which Chong Sing was a subsidiary.

UCF Pay.com is in turn a wholly invested subsidiary of Chong Sing.

Chong Sing’s public announcement from mid-June revealed that the government has required that it make-up the embezzled funds, and that if it fails to do so within a reasonable timeframe, UCF will not be permitted to resume operation and will have its payments license revoked.

Chong Sing has said that because Beijing Jingxun embezzled the funds it believes that Beijing Jingxun should bear responsibility.

“If Beijing Jingxun is unable to supplement the embezzled funds within a rational timeframe, then it’s almost certain that UCF’s payments license will be revoked,” said a source.

“Other companies involved with similar embezzlements of huge deposits have already had their licenses revoked – Guangdong Yimin, Zhejiang Yishi and Shanghai Changgou.”

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