SHENZHEN police have started an investigation into Ezubao, one of China’s largest P2P lending platforms, and its related companies for suspected involvement in illegal fund raising, the anti-economic crime department of the municipal public security bureau said on its official microblog yesterday.

    Police said investors can go to local police stations to report their defaulted investments with the website and provide evidence.

    The latest statistics show that the Beijing-based Ezubao, which grew into one of China’s biggest P2P lending platforms before it was shut down in December, had raised more than 72.9 billion yuan (US$11.22 billion) from about 4.89 million investors in 31 provinces.

    Ezubao’s offices in Beijing and Shenzhen were closed by police earlier last month.

    The company in Beijing was investigated Dec. 8 for suspected illegal fund raising and its online and offline businesses were suspended. Beijing police detained the executives and closed the company Dec. 16.

    Police have frozen 1.1 billion yuan of deposits in a China CITIC Bank account owned by a financial leasing company linked to Ezubao.

    The government published new draft rules for online financing firms in a bid to better protect investors after an inquiry into the lending platform.

    Online platforms will not be allowed to pool investors’ money, illegally raise funds or harm the public interest, according to the draft rules.

    The draft rules outline 12 prohibited actions, including concealing financial risks and using ambiguous language to sell products.

    At the end of November, China had 2,612 P2P platforms in operation and 1,000 of them — about 30 percent — were “problematic,” according to a statement of China Banking Regulatory Commission last month.

    Separately, the market authorities in Shenzhen and Shanghai stopped accepting the registration of new P2P online lending platforms from Jan. 1, in the face of a large number of default cases related to such online lending platforms, according to Chinese-language media reports.

    The reports quoted the authorities as saying that the practice was temporary, but they didn’t say when the registrations of such companies would resume.

    (Han Ximin)