103. The government shall audit the authenticity of P2P project

4 February 2016

P2P and P2B started to overflow in China since 2013,

Since it is a newly sprouted thing, the government did not supervise.

This created a readily exploitable loophole for the swindle criminals of Ponzi scheme;

Now, the problem exposed is that Ezubao is a pure fraud.

In my opinion, government supervision shall start with the authenticity of supervision project. All financial projects must audit the authenticity in private organisation, fact-finding organ, or government. As a result, the false project financing is illegal fraud in financing, where the business personnel and relevant staff will be sentenced.

Because it is simple to audit project authenticity, it is available for us to judge the operation condition of units through the tax amount of financing unit. The reference is that the tax amount is in proportion to financing amount means authenticity, but the enterprises without tax payment indicate fraud if asking for financing in tens of millions.

The operations of P2P and P2B are different in various enterprises because their investment directions are distinct. Thus, it is difficult to formulate game rules for them; instead of supervising until all rules are implemented properly, government shall start with simple things, with expelling swindlers such as Ezubao from the market. Such enterprises are so many that they occupy about 20 to 50 per cent; some projects are just talking nonsense upon hearing about them.

It is normal and understandable that some enterprises encountered some problems and are in bad management while the projects exist. For the projects in legal operation, the losses can always be redeemed and compensated when encountering difficulties.

Governmental task firstly is to separate the swindle enterprises from those in normal operation. There could be some dirty tricks if government failed to achieve it.