Executive at internet finance firm detained

Police in Shenzhen, Guangdong province have detained a chief executive of a local internet finance company who is suspected of involvement in cheating public savings from hundreds of investors.

The executive, surnamed He, one of bosses of the Shenzhen Baiyimao Financial Services Co, an online peer-topeer financial platform, fled abroad on July 16, when police began an investigation into the company for illegally siphoning off public savings.

The suspect, 47, a Shanghai native, returned to Shenzhen and was arrested on Thursday evening, after police issued a warrant nationwide.

Four other suspects related to the company have been arrested, with more than 6 million yuan ($872,000) involved in the case frozen by police.

Early media reports said transactions of the Shenzhenbased company, which was established in 2015, reached 1.9 billion yuan between 2015 and 2017, helping earn more than 20 million yuan in returns for 970,000 individual investors.

The Shenzhen police’s economic crime investigation department also urged other fugitives suspected of illegal pooling of public deposits through P2P lending platforms to turn themselves in by year’s end.

“Those who voluntarily return their ill-gotten gains and help crime victims recover their losses would receive more lenient punishment. If the crime is petty, it is possible that the penalty can be exempted,” it said.

A total of 253 P2P lending platforms encountered problems in July and more than 100 platforms failed to protect the interests of investors, according to P2P Eye, a web portal that tracks the industry.

The number of P2P companies had decreased to 1,926 by the end of July from a peak of more than 5,000 in 2014, after a two-year rectification campaign to curb illegal lending.

According to the Office of the Leading Group for the Special Campaign against Peer-topeer Lending Risks, China will reduce the risks of internet finance and peer-to-peer lending with steady progress as the shakeout in the nation’s $192 billion P2P lending industry accelerates at a rapid clip.

Unqualified P2P lending platforms will be required to exit the market and their assets and debts will be dealt with in a market-oriented way based on legal principles to protect the interests of investors, according to the office.