Abstract: "My idol is Tesla's Musk." "The entrepreneurial idea is to use the convenience of the Internet to change people's financial life." Zhang Lei, a "financial talent" who lives in the detention center, is still trying to liquidate the company prematurely. Confession, bluntly that "the things that were done before was like a gamble" - but his "cheap" of gambling is the net worth of investors who have been deceived.

 

 

[Direct Press Beijing, May 16] (Changchao News) “Because we could not reduce costs through scale advantages, the company finally decided to make business adjustments. Today, it officially stopped operating the Lingbird platform and entered the business settlement process.” 1 On the 23rd of the month, Zhang Lei (a pseudonym), the actual controller of the Lingbird Internet Lending Platform, stated in a statement that he “liquidated the company”, leaving investors who previously trusted him to be caught in a dilemma that costs and benefits cannot be recovered.

 

Zhang Lei founded the Lingbird Network Lending Platform in 2016, and has opened official online websites, mobile APP clients and other online investment and wealth management channels, using online advertising diversion, telephone sales, etc., with an annualized income of 5% to 18%. Bait, external sales of various types of financial products. Less than two years later, Lingbird platform has illegally raised a total of more than RMB 3 billion.

 

"The entire operating model of the Lingbird Network Lending Platform is actually 'Lending New to Old', repaying the new investors' money to repay the principal's principal and old debts of the previous investors, and the projects they invest in have very little money and operating costs. It took up nearly 70% of all investment funds.” Cao Yang, chief investigator of the Shanghai Public Security Bureau’s Economic Investigation Corps, introduced that Lingbird has essentially changed from an “Internet lending platform” to a “wealth management investment company.” The old and new operating model is unlikely to make money, and investment projects are also rarely profitable: “Don't say 18% of revenue, the company’s balance of payments is an idiot's dream. The crash of Lingbird Company is only a matter of time.”

 

Anatomy of the "sparrow" of Lingbird Company can give a glimpse of the P2P and wealth management platforms that have successively "bursted" in China in recent years. "Investors don't know what the borrower is doing with the money, and how it pays back; investors don't know if the platform has actually loaned the money to the borrower and it's easy to run the money." The platform in question often attracts investors to invest money by advocating high yield returns. It is actually difficult to find investment projects that generate such high returns, and then evolve into a Ponzi scheme that “returns the old and the old”.

 

Many investors who are in it have also changed their mindset. Some people trust the investment and financial platform as "blind": "Only looking at high returns, regardless of the risks behind them. Some people even know the risks, but also imagine that they are lucky to escape before the collapse."

 

Online Financing Wealth Management Platform Created Only Half Year Risk Frequently: Monthly Loans 40 Million Recover Only 10 Million

 

Born in 1987, Zhang Lei was a student of academic finance and worked for several well-known capital management companies. In 2014, Ningbo Longji Investment Management Co., Ltd. was established to carry out private equity fund business. In December of the same year, he established Kunpeng Investment Management Co. in Ningbo, which is mainly engaged in bridging of second-hand houses.

 

“We estimated that during the peak period, Shanghai’s 'bridge loan' demand for a month has 3000-500 billion yuan. This method is short and fast, Shanghai cycle is generally 40 days, and small cities are 20 days. Using house as a medium, to some extent, The risk is controllable.” According to Zhang Lei’s description, from Ningbo to Hangzhou to Shanghai, he has established investment management companies one after another, mainly engaged in the “bridge loan” business.

 

During this period, Zhang Lei had traveled to Stanford University in the United States where he "deepened contact" with concepts such as P2P and mobile internet. In 2015, after returning to China, he saw the domestic Internet finance rise and fall, and he also wanted to get a share from it.

 

There was a deeper reason for him to make this decision. Due to the turmoil in the stock market, Zhang Lei’s private equity fund had a floating loss of 50-60 million in the second half of 2015. On the other hand, the second-hand housing “bridge loan” is restricted by supervision and cannot continue to operate.

 

On January 15, 2016, Zhang Lei officially founded the “Songbird Network Lending Platform” to launch online financing and wealth management services. "The benefit has just begun to be good," recalls Zhang Lei. It feels like "absolutely sewn up."

 

However, in less than half a year, the company encountered risks. “In addition to the basic risk control, the Internet P2P loan also has moral hazards. For example, customers are cheated of loans and cannot repay. There are also some internal employees who have obtained false information for the customer to obtain transactional approvals. As a result, the company's bad debt ratio has been continuously raised and the funds have been tight." Zhang Lei told reporters that by the second half of 2016, the company had released 3,40 million a month, and may only recover 10 million. "Not only is the principal loss, but also the proceeds of this part of the principal can not be realized, but the operating costs of the company are still there, and there has been a situation where the ‘can’t be paid.”

 

Although he was exposed to operational risks, Zhang Lei relied on his own contacts in the financial circle for many years to continue to pull investors into capital injections. There are still many funds in the company's accounts. At that time, he had already begun to figure out another thing. At the beginning of 2017, Zhang Lei’s private equity fund settled at the end of his life, with a huge loss of over 100 million yuan. "I used the money of LingBi investors to cover the losses of private equity funds, a total of 80,000,000,000, to redeem investors for private equity projects."

 

This move will allow LingBi’s funding hole to expand again. According to Zhong Hong (a pseudonym), the chief financial officer of Ling Bird Co., Ltd. at the time, when Zhang Lei proposed to use LingBi’s money to repay the losses of private equity funds, she strongly opposed it. "He promised me again and again that we always have to earn back. You have to help me. If you say it well, he is the chairman of the board. I can only listen to him in the end for a finance."

"Lending a New, Old" Formula to Vicious Circles: 70% of Income Used in Cost Expenditure

 

"The 11% annualized income" and "rapid, safe, stable and transparent" are all attractive tidbits and the secret of the rapid rise of the "niche" platform. According to investigation by the police, the Lingbird platform uses low-risk and high-yield baits to continue to absorb large amounts of funds from new users and to redeem old customers' principals and proceeds in a way that illegally absorbs large amounts of money from unspecified individuals. By the end of 2017, the number of registered users of the Lingbird platform had reached 430,000, and the accumulated investment funds exceeded RMB 3 billion.

 

“There will be hints and guidance in the propaganda text. The earliest one will say 'how many years' and then change the 'anticipated annualization'. We set it at around 8% to 11%, giving people an expectation of capital preservation. "Zhang Lei is frank and the investment should be earning and paying compensation, but at that time almost all online lending platforms adopted the "implying capital preservation and interest-bearing" publicity means to highlight "low risk and high yield." It will even compare with the bank interest rate for the same period to attract more people to register and invest.

 

Zhang Lei claimed that the operating mode of the Lingbird platform is borrowers to initiate loans, investors "point-to-point" investment loans, the platform to extract part of the commission. But in fact, Sales Director Huang Fei (a pseudonym) knows that Zhang Lei “says a set to do a set”: “Investors’ money does not directly enter the corresponding investment after entering the Lingbird Network Lending Platform. Zhang Lei has established a ' "Super account," is equivalent to a pool of funds. The amount of money in this area will probably be about 70% of the operating costs incurred in the later period, as well as some other investment projects he has called."

 

Zhong Hong once questioned the company’s business model. “I asked him whether the state allowed it. He said that the law is not prohibited, legal non-compliance, industry companies are doing so. From my financial point of view, companies can only make money to grow healthily. They should not be like investment companies. New financing comes in, covering previous losses and operating costs."

 

It is reported that the operating cost of the LingBi includes the rent of the company's houses, the salary of more than 240 employees and the commission, but the greater cost is to redeem the principal and interest of the old investor. The two pieces of cost add up to more than 9 million expenditures every day.

 

With such a huge expenditure requirement, Lingbird adopts the “new and old” method—the principal of the new investor to redeem the old investor’s principal and interest—to fill the financial hole and fill in about 5 million every day. This network lending platform, the funds actually lent to the platform borrowers in the later period is less than 10% of the funds invested by investors.

 

The situation that the company’s funds are in short supply is getting worse. On January 22 of this year, the day before Zhang Lei decided to liquidate the company, LingBi had less than 10 million book assets. "In the later period, I personally borrowed from friends who knew private equity to make up for the loss of the company, which was about 30 million yuan. There was a 7 million usury loan, and the interest was 5,600,000 yuan a month." , "He said that his efforts to maintain the company's operations have been exhausted."

3 times the market price to create a "wisdom apartment" to attract further investment only for the front door

 

In the first half of 2017, when Lingbird had been dying for a while, Zhang Lei made a decision to “shock” Zhong Hong and Huang Fei.

 

“Zhang Lei insisted on investing in a smart hotel-style apartment, which cost 67,000 million and used half of the final stack.” Huang Fei felt that the decision was “unbelievable”: “I later learned that he had signed a rental price. Even if the project is completed, it is absolutely impossible to make a profit. The apartment price in the same location is almost one-third lower than ours."

 

Until today, Zhang Lei has revealed his true purpose. “I hope to bring some stable and high-quality users through the apartment project. To put it bluntly, it is to package the strength of the company and “back-end books” for the spirit bird.” He declared that the funds for the apartment project all come from venture capital. "Can't explain it to investors, or it will accelerate the demise of the company."

 

"Support facade" is Zhang Lei's consistent business philosophy. When Lingbird was just established, Zhang Lei had dug many technical personnel from Internet giants such as Ali and Tencent, and the company’s employees responsible for investing were also digging from the banking and financial industries. “These talents are the 'materials' that show the company’s strengths to endorse the company. Many people have paid a salary, and they also want to get a higher expected income through entrepreneurship.”

 

It is because people who have dug big companies are burning more money. It is reported that LingBi has more than 240 employees, of which more than 150 are programmers. The cost of raising these programmers' finances for one year will be close to 60 million to 100 million.

 

“These people, including me, were flickered by Zhang Lei.” The most eloquent Huang Fei “admired” was Zhang Lei’s eloquence: “Including him accepting interviews with some financial media and putting the company’s vision and ideas to a dead end, I was also convinced at the time.” Zhang Lei's pie was bigger and bigger: "A lot of sales will go in April 2017. The reason we left behind is because he said that the platform can still sell 200 million yuan."

 

Huang Fei said that Zhang Lei’s many words later learned that it was a lie. “For example, he bought a Mercedes-Benz AMGs65 sedan and told me that it was used.” According to police investigation, in the second half of 2017, Zhang Lei directly transferred over 3 million from the company’s finances to purchase the Mercedes-Benz luxury sedan. Not only that, Zhong Hong also stated that Zhang Lei spent more than 600,000 to prepare for the wedding and was also recorded on the company's account, including various beverage bureaus in Ningbo, Hangzhou, and Shanghai. They all walked from the company's account, and the income of the company’s accounts was basically the same. All come from investors. On January 18 of this year, Lingbird announced the suspension of the payment on the basis of the need for government filing. Zhang Lei also asked the company's financial affairs to directly transfer him to 3.8 million yuan, which he said was used for emergency repayment.

 

"My idol is Tesla's Musk." "Entrepreneurship is to use the convenience of the Internet to change people's financial life." ... Zhang Lei, a "financial talent" who lives in the detention center, is still repenting for premature liquidation. Saying "What I did before was like a gamble" - but his "cheap" of gambling is the net worth of investors who have been deceived.

 

“In fact, the company does what it does to sell dog meat. Its external publicity is regular financial management, current financial management, but there is no license, which is absolutely prohibited.” Cao Yang told reporters, Ling Bird Company in addition to take new investors When the money is returned to the old investor's account, the actual operation is not the same as telling the investor. “The investor’s money is actually in the hands of the company’s controller, and he is looking for another way to invest. But he actually does not have the appropriate investment ability and it is impossible to generate any revenue. The investor’s money is spent. No longer can I get it back."

 

Cao Yang said that in the face of such high-yielding investment and wealth management projects, although investors have high psychological expectations, they actually face very high risks. “Regardless of what you invest in, what you have to make clear is that what you invest is what you do, and what can you do to earn you back? If you don’t have a clear, credible answer, then it’s still not good.”