The test site of China’s fantastical traffic-straddling bus was dismantled in June, and now the peer-to-peer financing company that backed the project is being investigated for illegal fundraising.
Following reports of unlawful conduct, a total of 32 suspects at Beijing-based Huaying Kailai Asset Management Co. Ltd. have been arrested, according to an announcement Sunday by Beijing police on their Weibo microblog.
Huaying Kailai operates a peer-to-peer lending platform that allows individual users to invest in financial products. Police have asked investors who are owed money by the company to report to the authorities. “The investors’ legal interests will be protected as much as possible, in accordance with the law,” the announcement said.
The company came under media scrutiny following the unveiling of the first prototype of the Transit Elevated Bus (TEB), a vehicle designed to glide over cars passing beneath it. A test drive of the bus was held in August 2016 on a public road in a northern Chinese city, and accusations that Huaying Kailai had used the headline-grabbing project to attract customers soon followed, with media calling the TEB a scam. The company raised some 4.9 billion yuan ($721 million) for financial products connected to the bus.
According to the police announcement, one of the arrested suspects is a 47-year-old person surnamed Bai from Xingtai, a city in the northern province of Hebei. Media reports have speculated that this is company president, Bai Zhiming — also known as Bai Danqing — who fits the profile.
Bai has called himself “father of the TEB” in media interviews. He had promised to pay the bus’s inventor, Song Youzhou, 500 million yuan to purchase the bus’ patent, Sixth Tone’s sister publication The Paper reported. However, Song still hadn’t received any money by December, by which time the TEB’s prototype had seemingly been abandoned and sat covered in a layer of dust.
In June 2017, the TEB’s testing site was demolished, and the bus was moved to a nearby parking lot.
Neither Song nor Huaying Kailai could be reached for comment on Monday. The official website of TEB Technology can no longer be opened, and the company’s public account on messaging app WeChat last published a post in November 2016.
P2P lending and other online financial products are massively popular in China, but the industry is regularly plagued by scandals. In 2015, the online lending industry’s then-leader, Ezubao, was exposed as a massive Ponzi scheme that sold fake financial products to around 900,000 investors, scamming them out of around 50 billion yuan. In 2016, online loan sharks demanded young women send them nude photos as collateral, threatening to publish the pictures if the clients fell behind on their payments.
Editor: Kevin Schoenmakers.
(Header image: A scaled-down model of the ‘straddling bus’ at an exhibition in Beijing, May 19, 2016. Jin Wen/VCG)