Investors protest at EY Shanghai office over P2P lender

By Liu Tian in Shanghai and Li Xuanmin in Beijing Source:Global Times Published: 2016/10/9 22:48:39

Security guards are seen at the lobby of the Shanghai World Financial Center on Sunday. Photo: Liu Tian/GT

A dozen angry investors gathered in front of the Shanghai office of audit firm EY on Sunday, alleging that the firm had participated in capital fraud involving online peer-to-peer (P2P) lending platform Uprosper Assets.

The protest took place at around 9 am on the first floor of the building where EY has its Shanghai office, building employees told the Global Times on Sunday.

The police and security staff showed up and at around 11 am they took away the protestors, possibly to the local police station, a building employee said. The protestors, most of whom are retirees, were investors of troubled P2P platform Uprosper. The company closed in June following the disappearance of CEO Wang Jian, which left 436 million yuan ($65.38 million) unable to be redeemed, the 21st Century Business Herald reported.

A female investor said that she had invested about 1 million yuan, but had gotten nothing back. "I know many investors have invested millions of yuan, some even as much as 5 million," she said.

Uprosper previously claimed that the platform was involved in "strategic cooperation" with EY, one of the "big four" auditing firms, and the risk management of its financial products was also handled by EY.

Several investors said that EY staff had once told them face to face that their firm had provided all the audit, internal control and risk management services for Shanghai Uprosper Asset Management Co.

"Without the guarantee from EY, I may not have bought Uprosper's financial products," said one.

"But EY is attempting to distance itself from Uprosper, claiming that it only provided services for a small fraction of Uprosper's business," Chen Jianhu, one investor, told the Global Times on Sunday.

The protestors told the Global Times that EY had previously sent representatives to negotiate with them, but after September 30, the representatives refused to see investors and just posted an announcement unilaterally.

However, EY denied it had any strategic cooperation with the troubled P2P lender, according to a statement the company sent to the Global Times on Sunday. The statement was the same as the one published on September 30.

The audit firm was neither "involved in auditing Uprosper's financial reports" nor "provided service related to Uprosper's capital flow or investment," the statement noted. It only "offered advice to certain of Uprosper's internal processes," the statement said, and EY demanded that the P2P lender remove all incorrect and misleading information.

Any statements associated with EY had been removed from Uprosper's website as of press time.

Since the second half of 2015, Uprosper has launched various promotions to boost the sales of its financial products. Investors were guaranteed by the company to receive a return of 500 yuan and an extra reward of 20 grams of gold if they invested 200,000 yuan in a six-month financial product, which the company promised an interest rate of 8 percent, the China Business News reported.

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