JYS Group has announced its collapse after raising $180 million from investors, prompting an investigation by Shenzhen authorities.
Announcement of Collapse and Its Consequences
Lin Chunhao, chairman of JYS Group, announced from the UK that the Chinese investment firm has collapsed, affecting thousands of investors. This announcement triggered immediate investigations in Shenzhen.
Investment Schemes and Personal Losses
JYS Group, operating under Shenzhen Haiboxin Project Management Co., Ltd., raised approximately ¥1.34 billion from retail investors. Lin Chunhao stated his personal losses of $96 million. The company's schemes promised annual returns of 6% to 9%, but funds were allegedly used for interest payments and operational costs.
Authorities' Investigation and Market Response
Shenzhen authorities are investigating potential fraudulent activities and misrepresentation. Investors now face significant uncertainty as the Shenzhen Public Security Bureau leads the inquiry into financial wrongdoing.
The collapse of JYS Group highlights regulatory challenges and the need for tighter control of financial schemes in China. The consequences may lead to new regulatory reforms aimed at preventing similar occurrences.
