(Yicai Global) Aug. 13 -- A peer-to-peer finance unit under Zendai Wealth Management has suspended all lending and terminated all of its labor contracts in response to new regulatory requirements.

Shanghai Zendai Investment & Consulting will still be collecting dues as normal, ChinaFund reported yesterday, citing a Zenda Wealth Management email to employees.

The requirements likely refer to the Shanghai Municipal Office of Finance Service's rules for peer-to-peer lending platforms, one industry professional said. It began cracking down on unlawful P2P lenders last year, with Bench Wealth Management the first to be culled in late 2018 as it had insufficient cash.

Founded in 2011, Zendai Investment has about 125 branches in more than 70 Chinese cities. It was managing CNY6 billion (USD849 million) in loans during August 2017 and had as many as 8,000 workers, mostly sales staff. Zendai Group founder Dai Zhikang controls the firm.

Laocaibao, another P2P platform under Zendai, also announced yesterday that it would stop adding new businesses due to compliance requirements. It will also have to stop its top-up and claims services as it is closing down its payment channels, but cash withdrawals will still be available.

Laocaibao had CNY5 billion in outstanding loans as of July, after racking up as much as CNY29.6 billion since its establishment five years ago.

Editor: James Boynton