Banquets, lies and protests: the collapse of Qbao, another popular Chinese Ponzi scheme
Qbao goes quickly from state-media darling to official outcast after its founder hands himself in to police, saying he can’t meet debt and investor payments
Hundreds of desperate small investors have massed in freezing conditions in eastern China this week to protest over the collapse of a multibillion-dollar online finance service, after authorities did an about-turn and declared the one-time state media darling a Ponzi scheme.
Videos posted online showed the investors demonstrating outside provincial government offices in Nanjing, Jiangsu province, on Monday demanding action over failed funding platform Qbao.com, which has been accused of illegally raising at least 50 billion yuan (US$7.8 billion) from the public.
The case is the latest to highlight the financial and social risks amassed during China’s financial boom over the past decade and comes as the Chinese leadership has made minimising those risks a priority.
Founded in 2012, Qbao offered up to 60 per cent annualised returns for investors who signed in every day to complete “assignments”, including clicking on online advertisements and filling in questionnaires. The more deposits investors put down, the higher returns the platform promised.
To fund the scheme, Zhang Xiaolei, 49, created about 20 operating companies ranging from e-commerce firms to real estate, soccer, and bike sharing operations.