Protesters who claimed to be investors of online peer-to-peer (P2P) lending platform Ezubao assembled in front of the Beijing headquarters of State broadcaster China Central Television on Monday morning, but they were soon held by the police and have no way to follow up with the company, investors said.
Some protesters said they were trying to safeguard their rights, after Ezubao was reportedly involved in an investigation by the police authorities, according to a video sent by an investor based in North China's Tianjin to the Global Times Monday.
She asked to remain anonymous because of the sensitivity of the issue, and she said her family had invested about 600,000 yuan ($92,880) in total in the P2P service provider.
Ezubao is an online platform launched by Yucheng Group, based in East China's Anhui Province, which primarily focuses on finance and leasing solutions, according to the website of the group.
The platform has halted its online operations and marketing activities to cooperate with the authorities in an investigation, according to an announcement posted on the its official Sina Weibo account on December 8. Ezubao's website has been inaccessible since then.
Ezubao was launched only in 2014 and since that time has handled transactions of more than 73 billion yuan, US-based P2P online information provider crowdfundinsider.com reported on Thursday. With more than 5 million registered users, investors were offered products that promised annual returns from 9 percent to almost 15 percent, the report noted.
"I was surprised when I started to consider putting my money on that platform, which has relatively higher returns compared with other P2P platforms," Shen Zhongxiang, an analyst at Beijing-based market research firm Analysys International, told the Global Times Monday. He noted that the unrealistically high promised returns and vague information about the company's activities made him wonder whether this fast-growing platform was legitimate.
Investors who did put money into Ezubao said they could do nothing but wait, as the company is unreachable at present, the Tianjin-based investor said.
Ezubao has no information to share with the public at the moment, an employee who declined to be identified told the Global Times Monday, and "I'm still waiting at home." She said she had no idea when the company would follow up with investors.
An employee surnamed Wang at Yucheng Group said that the group had no comment on any investigation into Ezubao. The group's operations "are all normal," she said.
Investors who claimed to be "safeguarding their rights" can only wait for the conclusive results of the investigation to clarify whether the Ezubao case is a criminal or civil one, Liu Yongbin, a lawyer who specializes in Internet finance at the Beijing-based Yingke Law Firm, told the Global Times Monday.
"Once the authorities publicly announce that it's an Internet fraud, the funds that investors put into the online lending platform will likely be confiscated," Liu said, noting that investors have little chance of getting their money back as the authorities will freeze the assets if the company is involved in illegal activity.
Transactions in the nation's P2P industry reached 133.1 billion yuan in November, up about 4.2 percent compared with a year earlier. Also, 79 new firms have been questioned, which has raised concerns about the risks of P2P platforms, domestic P2P news portal todaywd.com reported on December 2.
Ezubao also claimed to be a professional A2P platform, or asset-to-peer platform, which is an asset-backed peer-to-peer lending process, Shen noted.
"But the real problem is that investors have little knowledge of what Ezubao has really been doing, and they've had little chance to learn more about its business model," he said.
