BRIC Plus News
    Facebook Twitter Instagram
    Trending
    • WhatsApp’s New Update Has Message Yourself Feature
    • U.S. Senate Passes Long-Awaited Same-Sex Marriage Bill
    • Elon Musk’s Management Style Has Made Twitter Less Secure, Says Twitter’s Former Trust And Safety Chief
    • Kim Kardashian and Kanye West Settle Their Divorce
    • NASA’s Hubble Space Telescope Captures Intergalactic Star Bridge Image!
    • Tyler Perry Signed A Deal With Amazon Studios For The Next Four Movies
    • Crypto Lender BlockFi Files for Bankruptcy as FTX Contagion Spreads
    • Omar retaliates in response to McCarthy’s threat to remove her from committees
    Facebook Twitter LinkedIn Pinterest RSS
    BRIC Plus NewsBRIC Plus News
    Leaderboard Ad
    • News
    • Affairs
    • Business
    • Culture
    • Entertainment
    • Opinion
    • Science
    • Stories
    BRIC Plus News
    You are at:Home»Business»Fear and anger grows at China investment scams

    Fear and anger grows at China investment scams

    0
    By Admin on February 4, 2016 Business

    Outrage has erupted in China at revelations from the police that online investment bank Ezubao was nothing more than a gigantic swindle – as police arrested 21 of Ezubao’s top officials behind the 50bn yuan (£5.3bn) Ponzi scheme.

    It has emerged that nearly 900,000 Chinese investors are thought to have lost their money since the Ezubao site was shut down by police in December after suspicious transactions in the billions sent a red flag up.

    A Ponzi scheme is a giant financial scam in which a company with no capital lures victims with offers of high rewards and its first investors usually get their money but it is simply taken from newer ones, and so a pyramid is built which will, sooner or later, have too wide a base to continue.

    Ezubao’s unique selling point was matching investors seeking companies and companies looking for finance, an increasingly popular way of investment known as peer-to-peer (p2p). But, unlike previous high-return Ponzi frauds like Bernie Madoff who targeted the international jetset out of billions of dollars, Ezubao’s clients were ordinary Chinese citizens coming mainly from rural areas. This has sparked huge outrage and many of them are helping create a consumer rights protection movement with a recent call  for three days of national protests.

    A Chinese police official speaks to Ezubao's depositors outside the State Bureau for Letters and Calls Reception in Beijing. / Photo: AP.

    A Chinese police official speaks to Ezubao’s depositors outside the State Bureau for Letters and Calls Reception in Beijing. / Photo: AP.

    It was the state news agency Xinhua that this week revealed “substantial evidence” of the elaborate fraud with a police source saying that “most investment projects featured on the Ezubao website were fake”. The scandal has caused embarrassment for the Chinese authorities as well, because the bank had been explicitly endorsed by the People’s Republic of China government.

    Indeed, Ezubao sponsored the  Xinhua news agency during the sessions of the National People’s Congress in March 2015, placing its logo in in the Great Hall of the People in Beijing. Such high-profile marketing woulod only be granted to reliable companies in the eyes of a Chinese citizen, brought up under the authoritarian communist government’s strict ideological propaganda. Furthermore, Ezubao received an award as one of the most responsible internet finance companies from state media outlet Newsweek and obtained the 20-second “golden” advertising time slot on the national broadcaster CCTV news, as Xinhua website reports now.

    Police have so far arrested 21 people, including the chairman of Ezubao’s parent company and main suspect Ding Ning. He told Xinhua that the Peer-to-Peer platform invented projects to attract funds, paying commission to third parties to act as a fake operator. Funds were then transferred from Ezubao, via the operator, to another associated enterprise of the group.

    One of the biggest financial frauds in China’s history is feared by national experts to be only tip of the iceberg in its mushrooming but disorderly digital finance market. The Chinese government has already been warned by the credit rating agency, Dagong, that some 1,250 of them were at risk of going bankrupt. Dagong president Xu Zhipeng warned then: “A storm of credit risks is brewing in the peer-to-peer lending industry.”

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Admin
    • Website

    Related Posts

    Koo Set For US Launch, Aims To Take On Elon Musk’s Twitter!

    The UK will Ease Business Burdens By Reducing Cookie warnings!!!

    Kazakhstan: The Latest Emerging Opportunity

    Leave A Reply Cancel Reply

    Latest Galleries
    BRIC Plus reveals the latest in innovation, business, and culture from the world’s emerging venues. Delving into global markets, BRIC Plus informs the reader of existing developments and opportunities across a range of industries whilst maintaining an opinionated yet alluring voice. Enjoy the site? Subscribe to BRIC Magazine.
    Recent Posts
    December 1, 2022

    WhatsApp’s New Update Has Message Yourself Feature

    December 1, 2022

    U.S. Senate Passes Long-Awaited Same-Sex Marriage Bill

    December 1, 2022

    Elon Musk’s Management Style Has Made Twitter Less Secure, Says Twitter’s Former Trust And Safety Chief

    QUICK LINKS
    • News
    • Affairs
    • Business
    • Culture
    • Entertainment
    • Opinion
    • Science
    • Stories
    Copyright © 2023 All right reserved | Digitally powered by bricplusnews.com.
    • Home
    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Advertise
    • Contact

    Type above and press Enter to search. Press Esc to cancel.