Head of Chinese online financing platform that handled over CNY 50 billion in transactions is under investigation

The head of a Chinese online financing platform that handled over 50 billion yuan ($7.65 billion)in transactions is under investigation after surrendering himself to authorities, state news agency Xinhua said on Thursday.

A Chinese flag is seen in front of the Friendship bridge over the Yalu River. Reuters

Police in the eastern city of Nanjing said on their official Twitter-like Weibo account on Wednesday that the legal representative for platform Qbao.com had surrendered himself at a police station on 26 December.

State news agency Xinhua, which reported the investigation on Thursday, said Qbao.com was a platform that allowed members to make investments that advertised returns of over 40 percent and earn money from watching advertisements.

Also on the platform were retailers who could get goods from Qbao and from whom members could make purchases, Xinhua said

It added that as of September, more than 50 billion yuan had flowed through the five-year-old Qbao.com platform, which required its roughly 200 million members to make deposits. Nanjing police and Xinhua identified the person under investigation as Zhang Xiaolei.

A message posted on Qianbao’s website, which has been shut down, said Zhang was “suspected of committing crimes”. Reuters was unable to reach him for comment.

China has pledged to intensify a crackdown on financial crime to safeguard national security and fend off financial risks after amid a rise in pyramid schemes, frauds and illegal fundraising.

In September, a Beijing court sentenced the architect of the $9 billion Ezubao online financial scam to life imprisonment, and handed down jail time to 26 others, marking the close to one of the biggest Ponzi schemes in modern Chinese history.