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UPDATE 1-China police take "coercive measures" against P2P lender Ezubao
December 16, 2015 / 11:46 AM / 2 years ago

UPDATE 1-China police take "coercive measures" against P2P lender Ezubao

(Adds details, background, investor reaction)

BEIJING, Dec 16 (Reuters) - 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 answered.

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 reported. ($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)

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