China vows strong punishments for illegal financing activities

BEIJING (Reuters) – China will severely punish people involved in illegal financing activities, especially targeting underground banks and the stock market, after a series of scandals, state news agency Xinhua said on Sunday, citing the state prosecutor.

“Conscientiously follow the demands of the central government, put the prevention of financial risk in an even more important position,” Xinhua said.

“Severely punish the illegal collection of public deposits, fraudulent fund-raising and other economic crimes involving the public, as well as money-laundering, underground banks and online pyramid selling,” it added.

Prosecutors will also step up a crackdown on securities crime, such as market manipulation, insider trading and fake information releases, and crime in the real estate market like tax avoidance, Xinhua said.

The report pointed to several recent scandals, including China’s biggest alleged online fraud – a nearly 60 billion yuan ($8.74 billion) case involving online peer-to-peer lender Ezubao – and last month’s jailing of a Chinese hedge fund manager detained in the wake of China’s 2015 stock market crash.

Xinhua did not say what specific punishments might be meted out as part of the renewed crackdown.

(Reporting by Ben Blanchard; Editing by Nick Macfie)