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BREAKING NEWS

China arrests 62 suspects abroad, $1.5 billion seized in P2P crackdown

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(Reuters) - China has arrested 62 suspects abroad and seized 10 billion yuan (1.16 billion pounds) in assets from 380 fraudulent peer-to-peer (P2P) lending platforms since June as part of a crackdown on online finance, the public security ministry said.

The arrest of P2P suspects hiding overseas is a top priority of Operation Fox Hunt, part of President Xi Jinping's war on corruption that includes bringing back government officials and business executives who have fled abroad with assets.

The ministry said their teams "successfully brought back 62 criminal suspects from 16 countries and regions, including Thailand and Cambodia."

The suspects are accused of crimes related to illegal fundraising, the ministry said on its website.

P2P platforms gather funds from retail investors and loan the money to small corporate and individual borrowers, promising high returns. At its peak in 2015, the sector had about 3,500 businesses in China.

The P2P industry had outstanding loans of 1.49 trillion yuan ($217.96 billion) last year, far larger than the combined sector outside China.

After Beijing moved to defuse debt bubbles and reduce risks in the economy, including the shadow lending sector, a wave of company collapses hit the P2P sector and triggered protests by angry investors who had lost their life savings.

The latest investigations found that many fraudulent P2P operators had lured investors with the promise of high returns, but had falsified investments and embezzled funds, the ministry said.

(Reporting By Shu Zhang; editing by Darren Schuettler)

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