China to prosecute 20 involved in troubled metal exchange

PUBLISHED : Monday, 01 August, 2016, 11:55pm
UPDATED : Monday, 01 August, 2016, 11:55pm

Police in Kunming said on Monday they would prosecute 20 people involved with the Fanya Metals Exchange, which authorities and investors say was a multibillion-dollar Ponzi scheme.

After months of protests, dozens of investigators took over the Fanya exchange building in Kunming late in 2015. This year, police arrested the head of the exchange, Shan Jiuliang.

We hope that investors can positively cooperate
Kunming police

In a brief statement on their official microblog, police in the southwestern city said that Shan, along with 19 others, had seen their cases sent to the prosecutor for review on June 30, the next legal step in the process before they faced trial. It was not possible to reach Shan for comment.

Police said they were working hard to recover stolen assets.

“We hope that investors can positively cooperate, and create a good basis for the further handling of assets connected with this case,” Kunming police added.

Founder of Fanya, China’s defaulting metal exchange, missing since October

Police said in June they had impounded more than 70,000 tonnes of non-ferrous metals and other assets of the exchange.

Launched in 2011, the Fanya exchange advertised itself as a state-supported organisation aimed at boosting prices of strategic metals mined in China.

It offered an investment product promising annual returns as high as 13.68 per cent. But it started restricting withdrawals last year, citing liquidity problems.

In July of last year, hundreds of people protested outside the exchange in Kunming, alleging that it had lost investments of more than 40 billion yuan (HK$47 billion) and complaining of government inaction.