Zhou Shiping, founder of Chinese P2P lender Hongling Capital, gets life sentence for crimes including fundraising fraud
- Zhou also faces deprivation of political rights for committing fundraising fraud and illegally taking savings from the general public, court says
- Another 17 defendants involved in the case get sentences of between 30 months and 11 years in prison
The lower Shenzhen Intermediate People’s Court of Guangdong province said Zhou also faces deprivation of political rights for committing fundraising fraud and illegally taking savings from the general public. All of his personal property will be confiscated. An intermediate people’s court is the second-lowest local court in China, which handles important cases in the first instance, while the High People’s court is a higher-level judicial organ.
The Shenzhen court gave another 17 defendants in the case sentences of between 30 months and 11 years in prison. These individuals were engaged in criminal activity including fundraising fraud, illegal absorption of public savings and professional embezzlement.
Between 2009 and 2021, Zhou and his employees collected about 109 billion yuan (US$15.3 billion) from more than 480,000 individuals by issuing online investment vehicles disguised as debt swaps and consumer finance products.
The Shenzhen-based company was going through a “huge” shortage of funds at the time, and the proceeds were mainly used to cover the company’s capital expenditure, as well as principal and interest payments for maturing debt and other financing projects. As the actual controller of some of the investment vehicles, Zhou bagged more than 20.4 billion yuan himself, according to the Shenzhen court.
China’s P2P lenders are internet-based lending platforms that match private investors – individuals with money that they are willing to lend – with individuals and small businesses that want to borrow. With each transaction, the platforms take a small commission, while investors can make up to 10 per cent in annual returns.