Chinese company accused of fleecing investors of $7.6 b
BEIJING: Police arrested the maverick founder of China's largest online finance business on suspicion of fleecing 900,000 investors of $7.6 billion, in what could be the biggest financial fraud in Chinese history. State media outlets reported the arrest of Ding Ning and 20 of his employees late on Sunday. State broadcaster CCTV aired purported confessions from two former employees at Ezubao, an Anhui Province outfit that rose from obscurity to become China's largest online financing platform in the span of about 18 months. Ezubao was the most spectacular player in a booming online investment industry that Chinese authorities have been struggling to regulate. Firms ranging from established Internet companies such as Alibaba to virtually unknown upstarts have flooded into the business, promising higher returns than those at state-run banks, which often offer interest rates below inflation. Ezubao promised investors that borrowers would pay back loans at interest rates between 9% and 14.6%, but 95% of those borrowers were fictional entities created by Ezubao, a former company executive told investigators. Behind the firm's rise was 34-year old Ding Ning, an Anhui native who dropped out of school at 17 to work at his mother's hardware factory, where he first gained experience running online sales, according to media reports. With no technical or financial training, Ding launched Ezubao in July 2014 and opened multiple marketing offices across China. The venture bought expensive ad spots that aired just before the widely viewed nightly CCTV newscast, the state broadcaster's flagship program. Ezubao appeared to gain Beijing's imprimatur when the gov.cn government website published an interview with Ding in July discussing his life as an entrepreneur. The interview has since been removed from the site.