This Is What Central Bankers Think Of Retail Investors
Of course this being China, even the Ponzi schemes are next level: as we noted before, police had to use two excavators and dug for 20 hours to unearth 80 bags of evidence that Ezubo executives had buried six meters underground on the outskirts of Hefei, a city in the eastern province of Anhui.
Then overnight, Reuters added some more juicy details to this epic fraud: executives at Ezubao’s parent company, Yucheng Group, now say it was “a complete Ponzi scheme”, which used investor funds to support a lavish lifestyle, the official Xinhua News Agency reported this week.
Among gifts that Yucheng Chairman Ding Ning gave his president, Zhang Min, were a $20 million Singapore villa, a $1.8 million pink diamond ring, luxury limousines and watches and more than $83 million in cash, Xinhua stated.
Amazing, but the real question is just how many other Ezubao are lurking. The short answer: many.
China’s P2P and the online finance industry also serve as a critical channel for the emerging small business and consumer market, which is often ignored by banks and mainstream financial institutions. iResearch predicts China’s unsecured consumer finance market alone will triple in size by 2019, reaching outstanding loans of over $1.7 trillion.By November, there were over 3,600 P2P platforms as the industry raised more than 400 billion yuan, according to the China Banking Regulatory Commission (CBRC). More than 1,000 of those were problematic, it said.
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