Investors in a Beijing commodity exchange claim that the founder of the company has absconded with as much as 170 million yuan (HK$194.1 million) of their deposits and possibly fled the country. Hundreds of people from across the mainland gathered at the headquarters of China Commodity Spot Exchange for the third day yesterday. Police have sealed the office and started to investigate the case. The disgruntled customers claim that Guo Yuanfeng, the president and founder of the exchange, embezzled a combined 170 million yuan of their deposits and fled to Chicago. The exchange has been in operation for 11 years as an online spot trading platform for steel, cotton, sugar, metal, coal and other products. The scandal is a wake-up call to the government because it exposes huge loopholes in the country's spot-trading regulations. 'It could be much safer if there's a custodian to oversee the accounts,' said Huang Lei, an analyst at Yongan Futures Brokerage. 'What's worse, spot trading in China is a sheer speculators' market plagued by runaway investments.' The mainland allows commodity futures trading on three exchanges in Shanghai, Dalian and Zhengzhou. Spot commodity exchanges can be opened after operators register with an industrial and commercial bureau. Under a common business model, the exchange charged traders transaction fees to make profits. The exchange also contracted with more than 400 agencies across the country to promote trading for it. An agent who claimed to have a business relationship with the exchange for 10 years said that during the Lunar New Year holiday in February the settlement process suddenly slowed. The agent, who identified himself only as Mr Zhang, a resident from Shijiazhuang, a neighbouring city to Beijing, told the South China Morning Post that back in February settlements were delayed for a week. At the time, he said, the company claimed it was due to a technical problem in the transaction system. Mr Zhang said investors had confidence in the company because it was approved by the Ministry of Commerce and registered with the Beijing Bureau of Industry and Commerce. 'How can the government let the company exist for 11 years if it's illegal? Isn't there any government agency to govern such companies?' he said. Investors said they hoped the government would take over the exchange and continue the trading rather than shut it down. According to Mr Zhang, Mr Guo could be reached by phone early this week after angry investors went to his office. Mr Guo promised to meet them. However, they lost track of Mr Guo on Wednesday and someone found he had flown to Chicago that night. According to the Beijing News, almost 200,000 investors around the country are victims of the case.