Photo: IC

The New York Stock Exchange (NYSE)-listed Chinese financing solution provider Weidai is being investigated for suspected illegal collections of public deposits, police from Hangzhou, capital of East China's Zhejiang Province, said on Saturday.

The Hangzhou police department's Weibo account issued a statement, urging borrowers on the website to pay back money in order to minimize the losses of lenders on the platform.

According to chinanews.com, the number of peripheral risks of the company is as high as 4,029 and its own risk is up to 497. Its own risks involve disputes over recourse of bad financial creditor's rights, service contracts and private lending.

On May 31 The company announced that it would quit the online lending business, aka peer to peer lending (P2P) business on June 30, due to government policies and industrial trends. And according to Weidai's 2019 financial reports, the company was set to stop offering new online-lending starting from February this year.

As of February, there were outstanding loans worth 8.58 billion yuan ($1.2 billion), accumulated lending was 298.67 billion yuan.

  

Founded in 2011, the auto-backed financing solution provider in China went public on the NYSE in November 2018. 

Weidai's stock price went as high as $13.2 per share in February 2019 from the IPO price of $10. But since then the price has seen a declining trend and the price on Thursday was $1.33 per share.

The case of Weidai - the largest online lending platform in Hangzhou city- is the latest development of a campaign launched by Chinese regulators to crack down on P2P frauds.

According to China Economic Net, as of the end of March, the number of P2P platforms was 139, down 86 percent from the beginning of 2019. The number of lenders also saw an 80 percent decrease while borrowers dropped 62 percent.