Nanshan police started an investigation into an online investment app that is suspected of swindling investors, the Southern Metropolis Daily reported.
The company, Niuniutongbao, began soliciting investors for its app selling automatic vending machines last year.
Investors were promised profits by investing in the vending machines. However, the investors found that they could no longer withdraw the profits from the app by mid-June.
One of the investors surnamed Wu said he invested 5,000 yuan (US$770) in an entry-level investment project to purchase an automatic vending machine, along with a 198-yuan machine maintenance fee, in March.
Two days after signing an electronic contract with the company to buy the vending machine, Wu started to earn a 0.3 percent profit on a daily basis.
Although Wu had never seen the machine in person, the company sent him a picture that showed his machine had been placed outdoors to sell products.
According to the investment rules, Wu could only withdraw the profits he earned every Monday, and the investment platform would charge him 8 yuan for every 100 yuan he withdrew.
The app promised to help Wu gain back his investment within five months, but he did not see that happening and this month the app starting requiring that investors withdraw their earned profits through an overseas virtual coin channel, which was almost inaccessible for investors without overseas bank accounts.
The Niuniutongbao company released a public notice on its official portal June 12, stating that the company must actively explore more channels of trade to reach the goal of long-term sustainable development.
Since then, investors have not been able to earn profits as promised, or withdraw their money from the app.
Suspecting that the app had swindled them, a lot of investors went to the company’s headquarters in Dachong.
The investors urged the company to return their money, although 10 percent of the price of the vending machines would be charged for maintenance, plus an 8-percent commission fee.
A person in charge at the company promised that all investors would get back their money, but the process would take six months.
Nanshan police are investigating if the company was involved in illegal fund-raising.