Chinese police have seized the assets of the country’s largest peer-to-peer (P2P) lending platform amid mounting complaints by investors.
Police in Beijing, Shanghai, Guangdong and Jiangsu raided Ezubao and detained several suspects, Reuters reports.
The action is part of a probe into Ezubao and other players in the unregulated P2P lending industry.
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 (US$21 billion), more than 1,200 are in trouble, either running away with investors’ money, or closed down, according to industry data provider Wangdaizhijia.
The investigation into Ezubao is the latest case highlighting the growing financial risks and potential social unrest linked to the P2P industry which has been dogged by reports of fraud in recent years.
Ezubao’s offices in Beijing and Shenzhen were closed by police earlier this month, an investor told Reuters.
Last week, state news agency Xinhua said Ezubao is under investigation for suspected illegal business activities.
The P2P lender had lent 70 billion yuan (US$11 billion) and counts Bank of China, the country’s fourth biggest lender, as its major creditor, financial magazine Caixin reported.
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