Victims of illegel fund-raising can now voice out their concerns via a new Chinese website. (Photo : Getty Images)
China's Ministry of Public Security (MPS) recently launched an online platform dedicated to recording data on illegal fund-raising cases, state-run Xinhua News Agency reported.
According to the MPS, the website will be beneficial in resolving such cases and can be used as a "basis for investors who were swindled out of money to receive compensation for their loss," the report stated.
The victims of the alleged illegal fund-raising initiated by online peer-to-peer broker Ezubao and related firms will be given priority upon registration of loss.
Police investigations show that based on substantial amount of evidence, Ezubao was able to cheat around 900,000 investors of more than 50 billion yuan ($7.6 billion).
Prior to its shutting down in December last year, as ordered by the police, the P2P platform had been operating for around 18 months or over one year and a quarter. The portal was able to make transactions worth 70 billion yuan in total.
Authorities said that most of the investment projects the company has featured are fraud and not profitable.
In connection with the operation of the online lending platform, the police has arrested 21 people including Ding Ning, the chairman of Yucheng Group, who created the platform in 2014.
A former senior executive of the firm revealed that "Ezubao is a Ponzi scheme."
Amid the issue, an investor surnamed Zhang was told that he can still get his investment's principal and interest. As quoted by Xinhua, he said: "One of the company's employees told me that I would get the principal of my investment and my interest, despite the failure of the project."
A Reuters report also pointed out that the Ezubao case highlights the risks created by the country's wealth management product sector, citing that the products are loosely regulated.
Currently, the sector is valued at $6.2 trillion.
Meanwhile, public security ministry officials emphasized that investors should honestly register the amount of investments they would redeem via the website.
Under the newly launched platform, verified data will serve as the bases for the return of the victims' funds.
The MPS stated that the website will be open for Ezubao investors until May 13.
The ministry added that in the future, the website will also be open for other major cases involving illegal online fund-raising cases.
