(Adds details, background, investor reaction)
BEIJING Dec 16 Chinese police said had taken
"coercive measures" against suspects at Ezubao, the country's
largest online peer-to-peer (P2P) platform by lending figures,
which generally means detention.
Police in Beijing, Shanghai, eastern province of Jiangsu and
southern province of Guangdong said they had sealed, frozen and
seized assets of Ezubao and its linked companies as part of
probes into the company, according to postings on their official
microblogs late on Wednesday.
"How can we get our money back?" said an investor named 24
in an Ezubao investors' social media group in response to the
news. "That's our hard-earned money."
The investigation into Ezubao is the latest case
highlighting the growing financial risks, and potential social
unrest, linked to China's unregulated P2P industry, which has
been dogged by reports of frauds in recent years.
In recent days, Ezubao investors have formed social media
groups and attempted to protest in several cities around the
country, including Beijing and Shanghai.
Among China's almost 3,800 P2P firms operating in the sector
now worth of 133.1 billion yuan ($21 billion), more than 1,200
are in trouble, either running away with investors' money, or
closed down, according to industry data provider Wangdaizhijia.
Attempts by Reuters to reach Ezubao by telephone were not
Ezubao's offices in Beijing and Shenzhen were closed by
police earlier this month, an investor told Reuters. Last week,
state media Xinhua News Agency reported Ezubao is under
investigation for suspected illegal business activities.
The P2P lender had lent 70 billion yuan ($11 billion) and
counts Bank of China, the country's fourth-biggest
lender, as its major creditor, financial magazine Caixin
($1 = 6.4723 Chinese yuan renminbi)
(Reporting by Shu Zhang and Matthew Miller; additional
reporting by Beijing Monitoring Desk; Editing by Jacqueline Wong
and Louise Heavens)