Zhongjin, an asset management company launched in 2003, has been seized recently. 20 core members were arrested. The outstanding debts is reportedly at least 4 billion RMB.
Zhongjin owns great brand awareness in Shanghai. It is a platform of 10 million RMB registered capital. It owns several top grade office buildings and you could find advertisements everywhere in prime locations of Shanghai. It input huge effort on online and offline marketing, even inviting a famous Chinese billiard player Xiaoting Pan and sponsoring a local TV show.
According to the police, Zhongjin attracted investors by fake projects, fake performance and high returns that Zhongjin promised. Zhongjin promised investors an annual return of 8%~16%, and some even reached over 20%. There is even a permanent contract which offers 50% annual profit with the investment not returning. It turns out that Zhongjin is only a fraud of self-financing.
Up to February 2016, Zhongjin had absorbed 3.4 billion RMB, and the number of investors had reached to 130,000. Among them, more than 20,000 investors are over 60 years old. Many investors are the families of Zhongjin’s employees, since the employees can receive huge kickbacks.