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Senior home chain probed for 'illegal fund-raising'
01.19.2018

    A local company is under investigation for alleged illegal fund-raising through a senior home it funded.

    Shanghai Civil Administration Bureau said yesterday that the company, Kaichen, together with the senior home chain, Kanglefu, has charged 239 people a total of over 28 million yuan (US$4.4 million) so far this month for alleged “membership for reservation of senior care services,” — but no service has been delivered.

    The 239, who only received a receipt that didn’t state what the payment was for, were allegedly promised annual returns of 9 to 12 percent of the money they invested.

    They were also promised preferential treatment for consideration of a place at a senior home at a future date — the city currently has a shortage of senior home places.

    The 239 paid up to 700,000 yuan each to the company, the bureau said, adding that some large payments were directly transferred to the private account of Xia Yuqiu, the legal representative of the company. Xia is the wife of Zhong Decai, legal representative of the senior home.

    Investigation started this month after suspicions were raised at the bureau from a regular inspection of the service quality and business operation of city senior homes.

    The bureau said it has demanded the company return all the investment monies paid to it, and that so far about 90 percent has been returned.

    Police in Putuo District have been investigating the case, and district market inspectors will hand out administrative punishment to the company if further investigation proves irregularities in its operation, according to the bureau.

    The Kanglefu chain of senior homes is headquartered in Putuo District, with branches in the Pudong New Area, Jinshan District and some cities in neighboring Zhejiang Province, according to its website.