Rarely are confessions on live television seen, but senior executive Xu Qin from Chinese investment firm in Shanghai, Zhongjin Capital Management, implicated himself on state television on Monday, confessing to operating a typical Ponzi scheme, and according to reports by Reuters.
Police had accused Zhongjin in April of ‘illegal fundraising’ and Qin was arrested along with twenty other executives with ties to the firm, leading him to confess on TV, “The way we operated our fund was with a Ponzi scheme method.”
He said, in front of the cameras, “we used money from investors who came later to pay the interest owed to earlier investors,” and added, “It was actually an extremely typical Ponzi scheme.” Qin had been arrested in connection with the case while en route to be married in Italy, according to prior media reports, halting more than just his financial activity.
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While rights activists say that confessions are often forced in China, it’s not clear if this one was voluntary or if the accused man’s rights to due process were violated, as Xu had not been formally tried in Court, as per Reuters coverage.
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In addition, the media exposure may have been timed with the announcement of a new financial crime enforcement unit for securities that was unveiled on Monday by Shanghai Police, according to reports by China’s Wenhui Daily.
In China, the term ‘illegal fundraising’ can vary because of the opaque nature of the country’s shadow-banking sector, hidden within the alternative and traditional finance industry.
Yet, authorities are trying to crackdown and detect such activity, as related systematic financial fraud is sought out to be eradicated by Chinese regulators.
The confession was recorded by China Central Television (CCTV), the country’s official state broadcaster, where Xu Qin was described as a high-roller (i.e. Wolf of Wall Street).
China’s police also strengthened in other areas recently, after one of its members literally broke a new Guinness world record on Sunday with a tremendous muscular endurance feat, after holding a plank position for over eight hours – making it the longest held to-date. With regard to the Ponzi scheme, it’s not yet clear how many clients of Zhongjin Capital Management have been affected and to what extent.