More than 50 Chinese PE firms suspected of illegal fundraising
More than 50 Chinese private equity firms are suspected of illegal fundraising activity, according to the head of a taskforce charged with tracking down offenders. A total of RMB16 billion ($2.6 billion) and more than 100,000 people are thought to be involved.
Zhangjun Liu, head of the anti-illegal fundraising taskforce, said at an industry meeting that illegal fundraising had risen in recent years for reasons including the support local economic growth, promoting environmental initiatives and accelerating innovation in consumer finance.
"There is always illegal fundraising activity involved in private equity firms," Liu said. He added that although cases have fallen this year the risks remain - in private equity and in private lending, leasing, and online peer-to-peer (P2P) lending.
P2P platforms are a particular concern because they are growing fast but there aren't sufficient rules to control the industry, Zhang said.
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