China asks Interpol to arrest businessman for illegal fundraising

BEIJING - Chinese judicial authorities have asked Interpol to issue a Red Notice for the arrest of Liao Rongna, a Chinese businessman suspected of raising billions of yuan illegally and who has fled the country, the official Xinhua news agency said on Monday.

Liao, 58, is the chairman of Zhengling Group, a private auto and machine manufacturer based in China's southwest Guangxi Zhuang Autonomous Region. Liao was once listed among the wealthiest individuals in China by Hurun's Rich List.

Chinese authorities have also asked the international police organisation to arrest Liao's wife, Xinhua reported.

Liao is the latest example of a Chinese businessman being sought by police for illegal fundraising. Private fundraising, which includes gathering deposits and selling loans outside the formal banking sector, is common but illegal in China as it escapes regulation.

In March, the owner of a troubled property developer in China's coastal Zhejiang province was detained after amassing loans of 3.5 billion yuan (S$710.84 million).

Local media reports saying Zhengling Group had problems repaying its borrowing emerged earlier this year, but the company as late as May characterized the reports as "rumour" and"speculation" intended to "mislead the public." The company was not immediately available for comment.

Zhengling Group raised more than 7 billion yuan in illegal bank loans and another 3 billion yuan in individual loans, according to local media reports published in April and May, which would make it the largest case of illegal fundraising in the region.

Xinhua said police found more than 1,500 loan contracts, involving about 3.2 billion yuan, as part of its investigation. As many as 600 creditors have registered with local public security agencies, and more creditors are expected to emerge, the news agency said.

Zhengling Group said its total assets reached 26.54 billion yuan as of July 31, 2013, while group debts amounted to 8.52 billion yuan.

Interpol uses red notices to inform its 190 member countries that an arrest warrant has been issued for an individual by a judicial authority. The notice seeks the location and arrest of wanted persons with a view to extradition or similar lawful action.

Liao appears on Interpol's website as "wanted by the judicial authorities of China for prosecution/to serve a sentence."