The head of a wealth management firm, allegedly on the run with $150 million of investors’ money from a city in eastern China, appeared in an online video on Monday, saying he would be “right back”.
Police in the eastern China city of Hangzhou launched a manhunt last week for Yang Weiguo, chairperson of the Wangzhou group, a conglomerate of companies, after he is said to have fled with 1 billion Yuan or $ 153 million.
According to state media reports, Wangzhou Group has more than 200 subsidiaries in commerce, automobiles, health and wealth management, including Wangzhou Fortune. It employs some 7,000 people in 70 cities.
As teams of police personnel fanned out across the country, Yang unexpectedly and dramatically appeared in a video posted on the website of the business magazine, 21st Century Business Herald.
“Hello everyone, it’s me,” Yang said, adding: “Don’t worry, I will be right back.”
Yang asked investors not to worry.
According to a report in the official news agency, Xinhua, investors in Wangzhou Fortune had been reporting problems with the company’s cash flow since April 18.
“More than 20,000 people have invested a total of about 2.2 billion yuan in the company, which has dozens of branches in major Chinese cities,” Hangzhou police told Xinhua on Sunday.
“The conglomerate Wangzhou Group, parent of Wangzhou Fortune, confirmed its chairman Yang Weiguo’s disappearance on Thursday. Wangzhou Group also closed its shopping mall in Hangzhou after the scandal emerged,” the report added.
Quoting a statement from the company, the report said that to repay investors, Wangzhou Group will retrieve about a billion Yuan after receiving principal and interest payments from its lending. “It will try to cover the 1.2 billion Yuan gap by selling properties, the statement added.
Cases of financial embezzlement are becoming common as the second largest economy slows down after decades of frenetic growth.
“Earlier this month, police detained more than 20 managers of the Zhongjin group of finance companies, including its head, at the airport as he apparently tried to flee the country on a chartered plane,” an AFP report said.