A total of 19 people connected to a troubled Chinese metals exchange have been arrested, authorities said, after repeated protests by disgruntled investors and as the number of cases of financial fraud rise. Shan Jiuliang, chairman of Fanya Metals Exchange, which managed around 40 billion yuan ($6.2 billion) in assets and claimed to be the world's largest minor metals exchange, was among those accused of illegal fundraising, said a statement on the city government's news portal in Kunming, where it is based.
Fanya offers investors the chance to bet on increasing metal prices, promising some speculators double-digit returns on their investments. But with commodity prices plunging world-wide, some of the exchange's reported 220,000 investors say they have been unable to withdraw funds since April 2015. The crisis sparked protests in Beijing and Shanghai, with police detaining hundreds of people in the capital. Nearly 28,000 Fanya investors have declared 7.8 billion yuan of funds unpaid on a national police website set up in response to widening fraud cases in the country, the statement late Wednesday said.
The platform was first activated after peer-to-peer lending firm Ezubao bilked 900,000 investors out of $7.6 billion by offering high interest rates which it was unable to pay, in what one executive described in a televised confession as a "typical Ponzi scheme".
In May police also arrested 35 executives and employees of Shanghai-based Zhongjin Asset Management after it failed to make payments of 5.2 billion yuan to its 25,000 investors.
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