BEIJING Chinese authorities vowed on Tuesday to step up a crackdown on illegal funding scams, after reporting 5,197 new criminal cases last year involving 251.1 billion yuan ($36.5 billion), state-run Shanghai Securities News reported.
More than 30 percent of illegal fundraising cases were related to private investment and financial intermediaries, including unlicensed investment advisers and providers of third-party wealth management products, the report said.
The cases severely destroyed the order of financial markets, Yang Yuzhu, director of the joint-meeting for anti-illegal fundraising was quoted as saying, threatening China's financial and social stability.
Authorities are now weighing a ban on organizations and individuals, except financial institutions, from publishing investment-related advertisements, the report said.
Although the number of new cases and the total amount of funds involved edged down from 2015, the government is facing heightened pressure due to the complexity of the new cases, which is slowing down their resolution, according to the report.
Moreover, financial fraud spread last year from China's east to rural areas, where funds approached unsophisticated Chinese farmers, the office of the joint meeting said.
Last year China approved the arrest of 9,441 people on suspicion of illegal soliciting public deposits and prosecuted 14,745, according to a separate Shanghai Securities News report on Tuesday.
While regulators embarked on a campaign against online finance fraud last year, focusing on peer-to-peer (P2P) lending platforms, the rampant growth of the sector has created risks that will take time to resolve, the office said.
Ezubao, once China's biggest P2P lending platform, folded last year after it turned out to be a "Ponzi scheme" that solicited 50 billion yuan in less than two years from more than 900,000 retail investors through savvy marketing.
Another case where illegal fundraising took place was at the Fanya Metals Exchange in southwestern Yunnan province, where hundreds of angry investors hit the street and complained of government inaction after losing more than 40 billion yuan in investment products that had promised an annual return of up to 14 percent.
"The total number of cases is still at a historic high level," the anti-illegal fundraising office said, according to the report.
The office also said it will ask provincial governments to examine potential illegal funding activities from May to July.
Targets for checks will include a variety of companies such as investment and financing intermediaries, P2P platforms, third-party payment services, crowd-funding platforms, private schools and rural organizations.
($1 = 6.8863 Chinese yuan renminbi)
(Reporting By Shu Zhang and Matthew Miller; Editing by Kim Coghill)