China starts criminal probe on Evergrande-linked wealth manager Hywin for illegal fundraising
Two suspects surnamed Han and Wang have been detained for illegal fundraising, Fengxian’s public security bureau said in a statement
The public security bureau in southern Fengxian district said it has taken “coercive measures” against at least three Hywin employees, according to a statement on Wednesday. The investigations would be expanded to protect investors, it added.
“The police force is collecting criminal evidence on all fronts, making all-out efforts to deepen the investigations to recover losses and protect investors’ interests to the maximum,” the bureau said. Two suspects, surnamed Han and Wang, have been detained for illegal fundraising, although the sum was not disclosed.
In mainland China, prosecutors can be involved in criminal cases if police request them to support further investigations.
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This crackdown comes nine months after Hywin failed to repay investors when some of its wealth management products matured, sparking a crisis of confidence as thousands of depositors worried about the safety of its bets on property projects after the nation’s housing market crashed.
Hywin, once the largest distributor of real estate wealth management products, is controlled by Nasdaq-listed Hywin Holdings. Its 2021 listing prospectus contained remarks about its good business relations with Evergrande and Sunac, and funds it raised were invested into their property projects.
