Beijing halts approvals of investment companies amid crackdown

Beijing: Beijing suspended approvals for new investment companies as the Chinese capital steps up a crackdown on illegal fundraising activities, two representatives at the Beijing Administration for Industry and Commerce’s official inquiry hotline said on Monday.

The city since January 9 has suspended registration for new companies in categories including equity investment, investment management, project management and investment consultancy, one of the representatives said, citing an internal notice.

Businesses with words including investment, asset, capital, fund and wealth management in their names won’t be registered, and the purpose is to maintain order in the city’s financial market, according to the representative, who asked not to be named citing agency policy. The news was earlier reported by the 21st Century Business Herald.

Beijing started a crackdown on illegal fundraising in April last year after such activities jumped, with investors affected rising sixfold to 21,000 in 2014 from the previous year, and money involved surging more than 50 times, the local government said at the time. Private-equity funds and peer-to-peer lending platforms were identified as among main areas where such practices jumped, according to a government statement.