(Yicai Global) Oct. 10 -- Hangzhou Municipal Public Security Bureau has enforced criminal compulsory measures against 52 suspects involved in Xinhehui's alleged illegal absorption of public deposits.

Police have frozen CNY131 million (USD18.4 million) in 472 bank accounts involved in the case, the PSB said on WeChat yesterday. Authorities have also frozen CNY245 million in 26 stock accounts and seized 57 properties and 57 vehicles, it added.

Launched in 2013 by Hangzhou Xinhehui Internet Financial Services, Xinhehui is an online wealth management platform targeting individuals. It has been struggling to repay its customers since the second half of last year and the police began probing the company after controller Chen Hangsheng surrendered himself to authorities in April this year.

The company said in August 2018 that it planned to repay CNY2.9 billion (USD48 million) to investors in four phases but as of February this year had repaid only CNY619 million and could not afford to pay off the rest, leaving some 17,000 clients out of pocket.

Hangzhou-based Meidu Energy, its second-largest shareholder with a 34 percent stake held via a subsidiary, denied participating in Xinhehui's daily operations when the scandal came to light, but admitted improper information disclosure. The listed backer's shares [SHA:600175] rose 0.5 percent today, closing at CNY2.01 (28 US cents) with a market capitalization of CNY7.2 billion.

Editor: James Boynton