Life sentence for the founder of Neo Capital for misappropriating billions

A court in the southeastern Chinese city of Shenzhen has sentenced the founder of peer-to-peer (P2P) lending platform Neo Capital to life in prison, Peng tiefor embezzlement of 102,600 million yuan (12.775 million euros). According to the economic news portal yicaiPeng captured that amount in deposits from 1.3 million clients, and about 12,600 million yuan (1,569 million euros) remains to be returned.

The problems of Neo Capital, which has become the most important company in its sector, began when in 2017 the Chinese government launched campaign against this type of lending platformfor which he pointed out the high risk, which led to a high rate of bad debts and a significant gap in financing.

Peng and five other people involved in the case then decided to “use fraudulent methods” to raise up to 1.108 million euros, an amount they used to pay debts and interest, as well as cover their own personal expenses.

The court also condemned another 25 people were sentenced to sentences ranging from two to eleven years in prisonand ordered that Peng be stripped of his political rights and that all his property be confiscated.

Digital P2P lending platforms began to proliferate in China in the mid-2000s, with more than 10,000 companies populating the sector, which recorded annual transaction volumes of up to €373,535 million) at its peak.

However, the Hong Kong daily South China Morning Post He indicated then that many investors have not yet managed to recover funds for a common value, according to data from Chinese regulators, of about 800,000 million yuan (112,028 million dollars, 99,609 million euros).