By C.Custer for Techinasia.com
Before the lunar new year holiday, China’s massive online P2P lending market was somewhat in disarray. A cloud of doubts were crystallized when a police investigation of Ezubao, previously one of the scene’s top companies, discovered it was a Ponzi scheme. Banks started cutting off ties to the sector, and regulators were circling. The holiday offered a brief respite, but the return to business in China has brought with it more bad news for the sector.
On Sunday, Alibaba subsidiary Ant Financial posted to its Weibo account that P2P lender Jiedaibao has been falsely using Alibaba-related names to mislead customers. Example screenshots posted by Ant Financial show WeChat accounts promoting Jiedaibao products by saying they are recommended by and/or created by Alibaba founder Jack Ma. That, of course, is not the case.
Jiedaibao, for its part, says that the posts didn’t come from it, its employees, or any of its third-party marketing firms. But many commenters don’t believe Jiedaibao, citing the company’s history of WeChat-related intrigue.
Shortly after its launch last year, it was accused by some users of using what amounted to a WeChat multi-level marketing scheme. Then in January, an anonymous WeChat account posted that it had reported the CEO of Jiedaibao’s parent company to China’s Central Committee for Discipline Inspection because of crimes related to Jiedaibao. There’s no real evidence that’s true, but it still reminds observers of the rumors about Ezubao (Ezubao was rumored to be under investigation for fraud months before the official news broke).
Regardless of whether Jiedaibao actually posted the misleading “Jack Ma” messages, the incident is more bad news for China’s P2P lending startups. The holiday, it seems, was not enough to take the heat off of China’s P2P lending industry.
Photo by Asia Society,
the article first appeared in techinasia magazine.