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November 8, 2017

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Police to step up crackdown on crime in financial sector

Source: Agencies | 00:01 UTC+8 November 8, 2017 | Print Edition

POLICE in China are to intensify a crackdown on financial crime to safeguard national security and fend off financial risks, the public security ministry said in an online statement yesterday.

China faces a high incidence of financial violations that could involve large numbers of people, creating significant risk for the finance sector, the statement said. Fighting such crime would prove a tough task, it added.

The ministry is to focus on crimes involving illegal fundraising, the online finance industry, securities and futures markets, and financial institutions. It called on the police to check for financial risks and improve early warning and prevention.

A number of targeted actions to clamp down on illegal fundraising, financial frauds, pyramid schemes, fake currencies, underground banks and bank card crimes have been launched, it said.

It also said police must report and give suggestions to Party and government departments to aid early discovery and handling of any financial risks.

The ministry called for coordinated efforts with government agencies to investigate and solve illegal financial activities, and improve laws and regulations.

The crackdown comes as the government is paying more attention to tighten regulations and rein in risky and illicit practices in the financial sector.

China’s central bank governor has warned of “hidden, complex, sudden, contagious and hazardous” latent risks accumulating in the system.

The State Council issued draft rules targeting illegal fundraising in August.

In September, a Beijing court sentenced the architect of the US$9 billion Ezubao online financial scam to life imprisonment, and jailed 26 others, marking the close to one of the biggest Ponzi schemes in modern Chinese history.

Ezubao, once China’s biggest P2P lending platform, folded last year after it turned out to be a Ponzi scheme that had collected 59.8 billion yuan (US$9 billion) from more than 900,000 investors through savvy marketing.

Last year, Chinese police busted more than 380 underground banks, involving more than 900 billion yuan, and arrested more than 800 suspects.

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