TWO suspects were arrested and three others were criminally detained in connection with a loan fraud case involving Shenfangli, a popular real estate content provider on microblogging platform Sina Weibo, Shenzhen Special Zone Daily reported.

Shenfangli was suspected of unlawful acts and irregularities including illegal crowdfunding in property purchase, false advertising, tax evasion, forgery of official documents of State organs and illegal fundraising, the Daily report said, quoting the result of a preliminary investigation released by a joint investigation team over the weekend.

Shenzhen’s financial regulator is urging the stakeholders of Shenfangli to register in the WeChat miniapp “深圳金融” or via email to szscfb@shenzhen.gov.cn. to make registrations and provide relevant documents.

The stakeholders refer to, but not limited to, the members who had paid membership fees, participated in housing property purchases, or had investments or interest transfers with the bank accounts of Shenfangli.

“Shenfangli” was a Weibo account set up by a man surnamed Li who had previously been certified as a “real estate expert.” It had attracted 1.46 million followers and more than 3,000 members before netizens accused it of being involved in illegal housing speculations.

Shenzhen’s housing and construction bureau and six other government departments started investigating Shenfangli in April this year.

Authorities are now investigating eight key members involved in the case including Li, the account owner, Shenfangli Information Technology (Shenzhen) Co. Ltd. and Fangli Information and Technology Co. Ltd.

Shenfangli has developed a WeChat miniprogram allowing its members to publicize advertisements to raise funds for housing purchases. It also developed a feature to lend money to members.

Shenfangli’s followers were told that “going to work is useless and meaningless” and “everyone can achieve financial independence by buying an apartment,” the Daily report said. Li also promised his members that they would benefit from real estate appreciation and encouraged them to focus on speculating on some hot properties in Shenzhen. Some members were even told to circumvent housing purchase rules through sham marriages.

The investigation conducted by authorities also found that Shenfangli was suspected of forging official documents of State agencies and providing false information to obtain loans, using multiple transfers and withdrawing cash to avoid banking supervision. The problematic loans involved mortgage, business and consumer loans totaling 1.064 billion yuan (US$164 million), 380 million yuan of which was business loans.

The market supervision authority has fined Shenfangli 2 million yuan for its false advertisements on Weibo and WeChat public accounts.

A total of 119 people have been found to have participated in acting to hold real estate for others or crowdfunding. They have been disqualified from purchasing commercial housing, renting public apartments and enjoying housing provident fund loans in Shenzhen for three years.

Forty-four members of Shenfangli, who are licensed agents, have been blacklisted by the city’s housing and construction bureau.

The investigation into the Shefangli case is still ongoing.

(Han Ximin)