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China Daily Website

Crackdown on illegal fundraising intensified

Updated: 2013-11-25 20:41
( Xinhua)

BEIJING - Chinese police have vowed to crack down on illegal fundraising after dealing with an increasing number of such cases in recent years.

An average of more than 2,000 cases have been handled by the police each year since 2005, involving about 20 billion yuan ($3.26 billion) annually, Xinhua learned on Monday from a meeting of an inter-agency task force leading crackdowns on illegal fundraising.

More than 16,000 cases have been cracked since 2008, saving economic losses of nearly 50 billion yuan, according to a statement released after the meeting, which said that the number of illegal fundraising cases handled in 2012 was 79 percent higher than that of 2011, and that both years saw more than 30 percent of suspects tried for illegal fundraising sentenced to severe penalties.

Many illegal fundraising activities promise high returns and profits under the guise of "supporting the local economy" and "innovating in financial services"; and they use various forms and means to hide fraudulent intentions, said Liu Zhangjun, head of the inter-agency task force.

In some places and sectors, civil debtors may become illegal borrowers by later turning to illegal financing channels, Liu said, adding that other trends include risks having increased in illegal financing regarding agricultural cooperatives, equity investment and Internet peer to peer lending, and financial institution and banking staff having become involved.

In a latest case, the Supreme People's Court (SPC) approved the death penalty of Zeng Chengjie for cheating more than 24,000 people out of 829 million yuan after raising funds of more than 3.45 billion yuan. The case attracted wide public attention and caused mass incidents and self-immolation protests in Xiangxi of central China's Hunan Province.

"The sum (in Zeng's case) was the highest we have seen in recent years, with the largest number of people cheated," said Pei Xianding, director of the SPC's second criminal court, on Monday, adding the case "seriously damaged state financial management order, caused huge losses to people's property, and severely affected local stability."

Liu said a new round of educational campaigns will be conducted soon to boost public awareness of risk prevention and understanding of laws, regulations and policies.

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