A man in Shanghai was given five years in prison and fined 50,000 yuan for running an illegal money-lending company that collected over 26 million yuan of deposits from people, Shanghai Daily reports.
About 10 years ago, the man, surnamed Gong, set up a consulting firm specializing in borrowing and lending money. Profits came from spreads between deposits and loan rates. From 2007 to 2009, Gong ran short on funds, and he’d tried to raise more money to cover interest payments to existing investors, but he found himself in deep debt.
He raised around 26 million yuan from people by offering monthly interest rates between three and six percent. In September of last year, he handed himself into police.
Around 10 people ended up losing a combined total of 16 million yuan, the Jing’an District People’s Court said.