Shanghai police probes online platforms' fundraising

[HONG KONG] Shanghai police have started an investigation into two online platforms after receiving reports from investors that they had been involved in "illegal fundraising", the city's Public Security Bureau said.

Jinlu Fund and Dangtian Caifu had promised investors a fixed yield of about 10 per cent without obtaining proper legal permission, according to the statement, which was released on the bureau's official Weibo account Tuesday.

The police have taken "restrictive measures" in connection with the case, and will try to recover as much of the assets as possible, the bureau said.

Shanghai Kuailu Investment Group, which announced in April the acquisition of the two platforms, will be urged to "take corporate responsibility", according to the statement, which didn't give further details.

The websites of Jinlu Fund, Dangtian Caifu and Shanghai Kuailu were inaccessible and appeared to be down. A WeChat message to a Kuailu public relations person wasn't returned.

Before the takeover, Jinlu had said on March 31 that it suspended payments on some wealth-management products jointly created with Kuailu, because of a 300 million yuan (S$61.21 million) cash shortage. Kuailu committed at least 3 billion yuan of assets as collateral for the delayed payment at the time.

BLOOMBERG