Police raid Shanghai ‘Ponzi scheme’ suspected of raising ¥30b
Operation comes amid fears a wave of defaults by illegal lenders could cause social instability
Shanghai police have raided a suspected Ponzi scheme operation thought to have raised more than 30 billion yuan (HK$35.9 billion), in the latest sign of cracks in the mainland’s lending system.
More than 20 people were taken into custody for further questioning, local police said.
The authorities said they found clues of illegal activity including unauthorised acceptance of public deposits and fraud.
Xu Qin, owner of Shanghai-based Zhongjin Capital Management, was apprehended at an airport as he attempted to flee the country.
The raid came after the municipality published a new rule on Monday requiring local authorities to step up their policing of illegal fundraising.