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P2P lending platforms report a growing number of disappearing executives

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2015-12-01 09:16Global Times Editor: Li Yan

China's P2P lending industry has been plagued by a recent spate of disappearing managers. The industry is also struggling with its share of problems, such as the accuracy of credit databases and the lack of a risk management system. These deficiencies highlight the urgent need for specific rules to regulate the industry. Although the industry remains immature, it has a promising future as more companies take steps to go public.

Two photos showing empty offices were posted on the website of Shandong-based peer-to-peer (P2P) lending company xlyp2p.com on November 23, claiming that the company's management had disappeared.

The disappearance took place just three months after the company launched its P2P lending platform, the Beijing Business Today newspaper reported on Thursday.

On Friday, the company issued a denial on its website that stated its executives had not run away. It called the previous day's statement an "act of revenge" perpetrated by ex-employees involved in labor dispute with the company.

However, it seems unlikely the denial will conceal the poor situation of the P2P lending platform.

Data from the company's website showed that the platform had 1,390 investors and 20 borrowers as of Monday. The investors had lent a combined 3.5 million yuan ($548,347.29) at annual interest rates varying from 8.88 percent to 18 percent.

In September, Beijing-headquartered rating company Dagong Global Credit Rating Group blacklisted xlyp2p.com for failing to disclose vital information to its lenders and borrowers, the Xinhua News Agency reported on Thursday.

Disappearing management

On the same day of the rumor that the management of xlyp2p.com disappeared, another P2P platform, Guangdong-based hongliangcf.com, shut down after several of its executives became unreachable, the Beijing Business Today reported.

The company was under investigation after the executives' disappearance. Its platform had about 880 investors and capital worth 24 million yuan.

Earlier this month, Chen Jian, president of a P2P lending firm in East China's Zhejiang Province, also reportedly disappeared with 60 million yuan in capital. Police have begun to investigate the case, according to media reports.

Experts said that the end of a year is usually the peak season for disappearing P2P lending firm executives, and a flood of runaway bosses could be just around the corner.

There are currently 3,445 P2P lending firms in China, Xinhua reported, citing data from Beijing-based Internet financial data center data.01caijing.com.

There are 40 newly added problematic online P2P platforms in November. A total of 29 reported disappearing managers, 12 more than that in October, according to the P2P finance portal wdzj.com. From January to October, there were 711 problematic platforms.

"Most of these platforms are small and medium-sized P2P lending firms," said Shen Zhongxiang, industry analyst at the Beijing-based market research firm Analysys International.

"They were only open for a short period of time and usually offered short-term lending to their borrowers," Shen told the Global Times on Friday.

  

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