Police Arrest Major Shareholder of Nekpun, a Car Loan Company Involved in 'Investment Fund Recycling' Scheme
Nexfun Investment Funds of Over 25 Billion Won Not Returned
More Than 2,000 Victims Expected
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[Asia Economy Reporter Yoo Byung-don] The major shareholder of the online peer-to-peer (P2P) lending company Nekpun, who had been under police investigation for allegedly using new investments to pay off old debts, has finally been arrested.
On the 3rd, the Seoul Bangbae Police Station announced that they had arrested Lee Mo (46), CEO of Nexrich Holdings and major shareholder of Nekpun, on the 31st of last month on charges including fraud and violation of the Act on the Regulation of Similar Credit Transactions.
According to the police, Lee is suspected of using funds received from new investors to repay principal and interest to existing investors, effectively engaging in a Ponzi scheme.
Nekpun, which has been selling investment products that lend money for purchasing cars to used car dealerships, attracted investors by emphasizing that it dealt with "cars" that could be used as collateral for mortgages. However, it was revealed that the company actually provided "unsecured loans" to used car dealerships.
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According to its own disclosures, Nekpun's outstanding loan balance amounts to 25,145,670,000 KRW. It is known that there are about 2,000 victims nationwide, with hundreds among them planning collective legal action.
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