An online lending group in Shanghai stands of accused of illegally raising over 73.5 billion yuan (approx. USD$10.78 billion) in funds.
The Shanghai First Intermediate Court commenced its trial of Wang Rong (王戎), Han Yue (韩越) and Xue Liang (薛亮) for fraudulent fund-raising on 22 September, according to an announcement made by the court’s official WeChat account.
Wang, Han and Xue are all accused of conspiring with others to illegally raise huge sums of funds, with Wang the main offender and Han and Xue acting as accessories.
Wang and Han stand accused specifically of running a succession of online lending platforms during the period from August 2015 to August 2018, which illegally raised over 73.5 billion yuan in funds and eventually sustained losses of 15.4 billion yuan.
These lending platforms included “Junrong Dai” (君融贷), “Zhao Qianmao” (抓钱猫), “Shitou Licai” (石头理财), “Jucai Cat” (聚财猫) and “Niu Banjin” (牛板金).
According to Chinese prosecutors Wang and Han established these platforms without obtaining the appropriate licensing from financial authorities, before using them to provide online lending intermediation services, and also making false guarantees of high returns and principal protections to tempt investors.
Xue is accused of founding the “Jucai Cat” online lending platform during operation of the company Shanghai Yuqian Financial Information Services Co., Ltd. (上海裕乾金融信息服务有限公司) from August 2014 to February 2017.
Xue is alleged to have advertised annualised returns of 6 – 16% for lending products provided by the platform, without having obtained the appropriate licensing from Chinese financial authorities.
Starting from February 2017 Xue Liang teamed up with Wang Rong and Han Xue to use “false lending labels” to engage in illegal fund-raising, while still being well aware of the immense debts of the platform.
Audits have found that during the period from August 2014 to July 2018 the Jucai Cat platform raised over 50.3 billion yuan illegally, and has yet to pay victims a principal sum of more than 5.5 billion yuan.