Involving thousands of people, with a target of 600 million, Xitou.com—walking right into the trap!
Compiled from: NetEase News
Case review
On August 26, the Futian Branch of the Shenzhen Municipal Public Security Bureau issued a case briefing on Shenzhen Xitou Financial Services Co., Ltd. (the "Xitouwang" platform). With the approval of the People's Procuratorate of Futian District, Shenzhen, the platform shareholder surnamed Huang was approved for arrest on August 18, 2021.
According to the notice, on August 11, 2021, the police submitted requests for approval of arrest in accordance with the law for three individuals: platform shareholders Huang and Gu, and senior executive Zhang. With the approval of the People's Procuratorate of Futian District, Shenzhen, approval for the arrest of platform shareholder Huang was granted on August 18, 2021. The police once again urged borrowers involved in this case to fulfill their repayment obligations in accordance with the law, promptly repay the principal and interest of their loans, and transfer the relevant funds to the special case recovery account of the “Xitouwang” online lending platform, noting the borrower's name and the purpose of repayment.
According to the bulletin, preliminary confirmation by the judicial appraisal institution shows that the platform suspended bidding on February 28, 2020, with approximately RMB 662 million in outstanding net principal owed to lenders, involving 5,635 individuals. Preliminary verification by the accounting firm shows that approximately RMB 659 million has been repaid to lenders, involving 6,068 individuals. The discrepancy between this figure and the data confirmed by the judicial appraisal institution is being further verified by the accounting firm with police assistance. The case is currently under further investigation.
Previously, according to a notice issued by "Futian Police" on July 15, police took criminal coercive measures against three individuals in accordance with the law on July 13, 2021, including platform shareholders surnamed Huang and Gu, and a senior executive surnamed Zhang, on suspicion of illegally absorbing public deposits.
Relevant legal provisions
Article 176 of the Criminal Law of the People's Republic of China: Crime of Illegally Absorbing Public Deposits
Whoever illegally absorbs public deposits or absorbs public deposits in a disguised form, thereby disrupting the financial order, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also, or shall only, be fined not less than 20,000 yuan but not more than 200,000 yuan; if the amount involved is huge or there are other serious circumstances, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years, and shall also be fined not less than 50,000 yuan but not more than 500,000 yuan.
If a unit commits the crime in the preceding paragraph, the unit shall be fined, and the directly responsible supervisors and other directly responsible personnel shall be punished in accordance with the provisions of the preceding paragraph.
Article 81 of the Commercial Bank Law
Anyone who establishes a commercial bank without approval from the banking regulatory authority of the State Council, or illegally absorbs public deposits or absorbs public deposits in a disguised manner, if constituting a crime, shall be investigated for criminal liability in accordance with the law; and the banking regulatory authority of the State Council shall ban such activities.
[1] The author's perspective
As early as 2014, P2P platforms sprang up like mushrooms after rain, and the promotional tactics employed by major platforms were highly diverse. They invested enormous sums in publicity and advertising, with elevator ads, online ads, and major marketing accounts appearing in an endless stream. In order to compete for users, the advertising copy became increasingly exaggerated and mysterious. However, Huang Sheng, the founder of Xitou.com, was somewhat different. He built a massive fan base by sharing knowledge about finance, and then cleverly converted those fans into users of Xitou.com, thereby saving enormous advertising costs. Moreover, because these fans trusted Huang Sheng, their trust in Xitou.com was extraordinary.
However, in 2017, some P2P platforms began to collapse. When people realized the problems with P2P platforms, the industry encountered an unprecedented crisis. Yet at that time, reports still claimed that Xitouwang had achieved profitability in 2017, with profits exceeding 10 million yuan. In previous years, it had basically maintained a break-even position and was able to continuously expand into new markets. Amid such smoke screens, Xitouwang survived for several more years. However, with the latest police notice, it has become an established fact that Xitouwang, once touted as achieving growth against the odds, has collapsed.
The crime of illegally absorbing public deposits is mainly characterized by absorbing funds from unspecified members of the public without approval from the People's Bank of China, either under the guise of absorbing public deposits or not, issuing certificates, and promising to repay principal and interest within a specified period, thereby disrupting financial order. It can be seen that this not only disrupts the national financial savings order but also harms the national financial credit order. Although China's economy is developing rapidly and enterprises are growing quickly, the faster the pace, the more important it is to hold the steering wheel steady; otherwise, once derailed, it harms not only oneself but also the entire society.
