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Shanghai savers sound the alarm as more P2P lenders fail to return funds

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Peer-to-peer lenders operated in a risky arena known inside China as shadow banking. Photo: EPA

China’s ailing peer-to-peer (P2P) lending businesses hit yet another blip after two big platforms in Shanghai failed to repay savers, and as key executives disappeared without explanation.

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Dozens of savers who’ve demanded repayment to no avail, reported to the local police in Shanghai’s Pudong district on Wednesday to file complaints about Yonglibao.com and Jucaicat.com. The value of the claims are reputed to be worth billions of yuan.

On Tuesday, Yonglibao’s senior management team posted a letter online informing savers that the owner and chairman Yu Gang and chief executive officer Zhang Yufeng had disappeared since Monday afternoon,

Xue Liang, founder and CEO of Jucaicat has also disappeared, Chen Shuhao, chief operating officer of the P2P firm, told the Post.

Technically, P2P is an information provider that matches borrowers and depositors via the internet while charging service fees.

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Thousands of mainland P2P firms collected deposits from savers, offering them annualised returns of at least 8 per cent, while lending the funds to cash-hungry businesses such as property developers at lofty interest rates.

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