Dec 21 Hundreds of anxious Chinese investors who said they spent money for products from one of China's biggest online finance companies petitioned the government on Monday to speed up investigations into the firm whose operations have been halted. Ezubao, which grew into the country's biggest peer-to-peer (P2P) lending platform before it was shut earlier this month, is being probed for suspected illegal activities. Police have sealed offices as well as seized assets of Ezubao and related companies. The Ezubao case underscores the risks created by China's fast-growing $2.6 trillion wealth management product industry. Many products are sold through loosely regulated channels, including online financial investment platforms and privately run exchanges. Early on Monday, more than 300 investors gathered at the central government petitions office in Beijing, watched by dozens of police. Five investor representatives registered to bring the matter to the attention of the State Council, China's cabinet, Ezubao employees and investors said. The petitioners said were told by government officials that they need to wait at least three months for a result. Beijing-based Ezubao attracted more than 70 billion yuan ($11 billion) from about 800,000 people in 31 provinces since its creation in 2014, according to a paper circulated in an investors' social media group.
China's P2P sector, now worth 133.1 billion yuan ($21 billion) according to industry data provider Wangdaizhijia, has been dogged by reports of alleged fraud in recent years. Among China's almost 3,800 P2P firms, more than 1,200 are in trouble, according to the data provider. TV ADVERTISEMENTS
Former employees attributed Ezubao's rise in part to its high-profile advertisements on state broadcaster CCTV and on high-speed trains. They also said Ezubao grew rapidly because its products paid extraordinary high annual returns of 9 percent and higher - until operations halted. The former employees said Ezubao developed a network of 100,000 employees, dubbed wealth managers, by offering competitive compensation. Many wealth managers also invested to win performance-based bonuses, they added.
Among the people gathering on Monday were employees and investors who said they lost their life savings."I feel terrible," said an investor surnamed Liu, adding that she invested 800,000 yuan in Ezubao products. "I haven't dared to tell my husband yet."An employee surnamed Zhang said she and her families and friends invested about 1 million yuan in total."It's people closest to me who are hurt by this," said an employee surnamed Zhang, who invested about 1 million yuan on behalf of her family and friends."Now I have offended all of my family and friends," she said. "Where has my credibility gone?"