Beijing police have launched a criminal investigation into CreditEase, a Chinese wealth manager, and its affiliated entities. The probe follows a four-month payment freeze on two investment platforms linked to the company.
According to the Beijing Municipal Public Security Bureau, the investigation targets suspected unlawful conduct. Controllers of the relevant enterprises, including Tang Ning, CreditEase’s founder, and Zhao, have been placed in custody.
The police action comes after CreditEase disclosed a material default across fixed-income-like products managed by its asset management platforms. Investor disbursements were halted on May 22, with the company citing contraction and sub-par financial returns in its inclusive finance and wealth management operations.
In a recent circular to high-net-worth investors, CreditEase warned of potential balance-sheet insolvency and a significant debt shortfall. They attributed this to their inability to divest “poor quality” underlying assets in open markets.
CreditEase’s consumer loan arm, Yiren Digital, traded on the New York Stock Exchange, has asserted its operational separation from the parent company. Yiren confirmed that the defaulted vehicles were marketed by affiliates of CreditEase’s controlling shareholder.
As the investigation unfolds, affected clients have been instructed to submit case details to assist the inquiry and asset recovery. CreditEase has pledged to address product exposures in compliance with statutory requirements and pursue an accelerated, equitable disbursement to clients.
The company assures that its loan-facilitation and other licensed businesses will continue to operate stably while it works to expedite recoveries on non-performing loans and divest viable assets.