NEO Group (NEO Capital Management Group Co., Ltd.), a mainland Chinese financial services institution primarily engaged in internet finance, wealth management, and investment management, was established in Shenzhen, Guangdong in 2013. Its legal representative and controlling shareholder, Peng Tie, has been sentenced to life imprisonment and lifetime deprivation of political rights, along with the confiscation of all personal assets. Peng Tie was found guilty of illegally accumulating CNY 102.6 billion (equivalent to USD 15.9 billion) from approximately 13.1 million individuals through online lending platforms and other means.
On Friday, the Intermediate People’s Court of Shenzhen publicly announced the first-instance verdict of the illegal fundraising case involving 26 individuals, including Peng Tie, the main responsible person of NEO Group. The court found that from January 2013 to January 2021, Peng Tie and others established NEO Group and its subsidiaries such as “NEO Investment,” “NEO Wealth,” and “NEO Fund.” They illegally accumulated CNY 102.6 billion from 13.1 million individuals through peer-to-peer (P2P) online lending and private wealth management products. Of this amount, CNY 12.6 billion remained unpaid.
During this period, Peng Tie, Peng Gang, and six others knowingly continued their illegal fundraising activities despite significant funding gaps and high default rates within the group. They mainly used the raised funds for personal purposes, including repayment of debts and personal expenses. The total amount involved in the fraudulent fundraising reached CNY 8.934 billion.
The court concluded that the criminal acts of Peng Tie and others caused substantial property losses and seriously disrupted the country’s financial regulatory order, with particularly severe circumstances and consequences. Based on the crimes committed, their nature, circumstances, and the degree of social harm, Peng Tie was sentenced to life imprisonment for fundraising fraud and illegal absorption of public deposits, with the deprivation of political rights for life and the confiscation of all personal assets. The other 25 defendants, involved in the fundraising crimes, received sentences ranging from eleven years to two years in prison, along with fines.
After Peng Tie and others were arrested, the public security organs made full efforts to recover assets related to the case, including funds, stocks, equity, and real estate. The assets that have been recovered will be returned to the participants in the fundraising scheme according to the law after the judgment takes effect.
According to public information, NEO Group’s online platform, “NEO Online,” was launched and operated in 2013 and was one of the largest P2P platforms in Guangdong Province. As of April 30, 2020, NEO Online had accumulated over 6 million registered users, with a total transaction volume of CNY 117.1 billion and an outstanding loan balance of CNY 10.42 billion. On May 9, 2020, NEO Online announced its exit from the online lending industry and stated its intention to gradually settle its existing online lending business.
On May 6, 2021, the Nanshan Branch of Shenzhen Public Security Bureau released a situation report on the case of NEO Capital Group Co., Ltd.’s alleged illegal absorption of public deposits. They reported freezing 663 related accounts, recovering over CNY 140 million in funds, sealing 1,056 properties involved in the case, and freezing 99.91 million shares of related companies. Source