PPMiao, the online peer-to-peer (P2P) lender in China, faced protests from investors in the company at its offices on Monday (Aug. 20), as the P2P lending industry continues to be plagued with problems. According to a report in Reuters, 243 P2P companies or more have gone under in China since the start of June, which prompted investors to withdraw money from multiple P2P companies and sparked protests saying that the government didn’t do enough to regulate the P2P lenders.
Reuters noted that around 300 investors in PPMiao were packed into the lobby of the International Finance Centre (IFC) in Shanghai, home to HuaAn Future Asset, which is registered as a shareholder for the P2P lender’s former operator Hangzhou Fuqian Network Technology. HuaAn, its shareholders including government-owned companies such as Shanghai Electric Group and Shanghai Trust, said it had registered as a stakeholder in Hangzhou Fuqian on a client’s behalf, but that it never made money off the platform, reported Reuters.
Earlier in August, PPMiao said the company could no longer continue operations because of investor withdrawals. Protesting investors are concerned that they won’t get money back from PPMiao. At the time, China ordered a lockdown of Beijing’s financial district to prevent individuals from protesting a crisis in the P2P lending marketplace.
According to the Financial Times, hundreds of police officers and security guards gathered near the offices of banking and securities regulators, as well as the entrance to the underground train stop for the financial district. Police were checking identity cards of anyone entering the area to prevent organized demonstrations by groups of investors that lost money as P2P lenders went under. Only a handful of protesters showed up during the morning rush hour. Those that did show up were taken away or placed on buses by the police.
With the collapse of the market, many are left wondering why the platforms were able to say they were government-approved, and why local authorities couldn’t do more to recover their money.