China economy

Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation

CEO of peer-to-peer lending platform Beimi Wallet is accused of ‘illegally absorbing public funds’

PUBLISHED : Saturday, 04 August, 2018, 11:00pm
UPDATED : Saturday, 04 August, 2018, 11:20pm

A Chinese executive accused of “illegally absorbing public funds” has been released from detention in time to find his name on the latest Forbes list of 30 Under 30 stand-out entrepreneurs in China.

Yao Kunjie, 28, is the CEO of peer-to-peer lending platform Beimi Wallet and was named on the financial sector list on Thursday.

Forbes magazine puts out regional lists of high achievers born after January 1, 1988, in 20 sectors every year.

The announcement came just a week after Shanghai police said Yao had been detained on July 13 on suspicion of “illegally absorbing public funds”, without elaborating, in a statement last Saturday.

He has since been released while the investigation continues, National Business Daily reported.

Yao’s case is one of many in the industry in recent months, with P2P lending platforms falling like dominoes as Beijing tightens regulations as part of a broader battle against risky credit.

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In a statement, Forbes said the list was put together with input from 69 prominent entrepreneurs, venture capitalists, artists, business schools and industry experts who assessed candidates on their influence, performance and innovation. Phone calls to the magazine’s publicity staff went unanswered on Saturday.

Yao graduated from prestigious Fudan University in Shanghai in 2012, founding Beimi Wallet two years later with Cui Wei with a combined investment of 50 million yuan (US$7.3 million). Yao also has interests in 15 other businesses, including a restaurant, cafe and florist.

Four days after Yao was detained, Beimi Wallet said in a statement that the company owed 4.09 billion yuan in deposits – or 4.5 billion yuan with interest.

Investors have been advised to register their investments with the economic crime investigation division of Shanghai police.

Shanghai savers sound the alarm as more P2P lenders fail to return funds

The industry – one of the riskiest elements of China’s shadow banking system – is reeling from a spate of P2P platform collapses in recent months amid tightened regulation and a liquidity crunch. More than 200 suspended their operations in July alone, and 11 more closed down, Caixin reported.

On Thursday, the Shanghai public security bureau said some 44 P2P platforms were being investigated, accused of “illegally absorbing public deposits or fundraising fraud”. The executives or management of 27 of those companies were also under investigation.

In Yao’s case, Shanghai police said they had received reports from the public about difficulties withdrawing deposits from Beimi and the investigation, including a financial audit, was continuing. The police statement said they hoped to “keep investors’ losses to a minimum and protect the normal financial order”.

The company statement said it was cooperating with police and there was no plan to repay investors until all asset claims had been verified. Earlier, Beimi said it hoped to gradually pay back investors.

Investors left to rue losses as fraudulent Chinese P2P lenders collapse in tighter regulatory environment

During a speech marking the company’s first anniversary in 2015, Yao said he had moved on from his jobs in traditional financial institutions and internet companies to start Beimi so that ordinary Chinese could “take a share in the dividends of our times”.

He said the platform had strictly screened lenders and institutions to create a quality financial vehicle for investors. They numbered 280,000 in 2015, and had invested some 23 million yuan.