Zhou Qinye thanks the stock market – which had shown signs of recovery late last year after the summer’s turmoil – for saving her from big losses on her investment in the financial firm Ezubo.
It was one of China’s largest online peer-to-peer lenders until it was pounced on by the authorities on December 8 for alleged illegal operations.
The probe into the company over its fund raising activities comes as part of the central government’s moves to improve scrutiny of risk in financial investments.
READ MORE: Funds frozen in China P2P cleanup
Zhou, a property professional from Shanghai, was persuaded by a friend who worked for Ezubo to put in cash and invested more than 200,000 yuan (HK$240,000) in its products.
Like many Chinese investors, she was attracted by promises of high returns from the firm’s wealth management products, but had little knowledge of how and where the company used the funds.
“I felt uneasy because the rates of return Ezubo promised – nine to 13 per cent – seemed too high and unrealistic in the sluggish economy. When the stock market rebounded slightly in early October, I withdrew half my investment,” she said.
Zhou also bought a three-month wealth management product from Ezubo for 20,000 yuan that included stock investment consultations from the online lender, but the money cannot be withdrawn before maturity.