Fanya boss among 19 arrested for fraud
Print Edition
NINETEEN people connected to a Chinese metals exchange have been arrested after repeated protests by disgruntled investors and as the number of cases of financial fraud rise.
Shan Jiuliang, chairman of Fanya Metals Exchange, which managed around 40 billion yuan (US$6.2 billion) in assets and claimed to be the world’s largest minor metals exchange, was among those accused of illegal fundraising, the city government said on its news portal in Kunming, capital of southwest China’s Yunnan Province.
Fanya offered investors the chance to bet on increasing metal prices, promising speculators double-digit returns on their investments. But with commodity prices plunging worldwide, some of the 220,000 investors say they have been unable to withdraw funds since April 2015, sparking protests in Beijing and Shanghai. Police detained hundreds of people in the capital.
Nearly 28,000 Fanya investors have declared 7.8 billion yuan of funds unpaid on a national police website set up in response to widening fraud cases in the country, the statement said.
The platform was first activated after peer-to-peer lending firm Ezubao bilked 900,000 investors out of US$7.6 billion by offering high interest rates which it was unable to pay, in what one executive described in a televised confession as a “typical Ponzi scheme.”
In May, police also arrested 35 executives and employees of Shanghai-based Zhongjin Asset Management after it failed to make payments of 5.2 billion yuan to its 25,000 investors.
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