Huaxia Finance at center of illegal fundraising investigation

Twelve people involved with Huaxia Finance, a local Internet-based financial service company, have been placed under compulsory measures by police in Huangpu District over allegations of illegally collecting public deposits, police said on Wednesday.

The 12 include the company's legal representative surnamed Li, and chief financial officer surnamed Wang.

According to Huangpu police, Huaxia Finance set up an online platform as well as an offline storefront without approval from authorities and illegally raised money from investors by promising yields of 6 to 19 percent.

The money raised was used to run the company, pay interest to investors and for lending to others.

So far local police have frozen more than 85 million yuan (US$12 million) involved in the case and are still retrieving more illicit funding.

Police have obtained data from the company and invited a judicial auditor to confirm the amount of money received from each investor as well as track the money's whereabouts.

The return of retrieved money will be conducted later by the court.

Investors can register on the economic police's online platform for victims involved in illegal fundraising, or file a police report in person with their identity card and relevant documents.

Those who borrowed money from Huaxia Finance should return the funds to bank accounts designated by police.

The case is still under investigation, police said.