(Beijing) – Police probing a financial holding company that ran a popular investment service online have found evidence that it illegally raised some 40 billion yuan from 800,000 people, sources close to investigators say.

Yucheng International Holdings Group Ltd. and a subsidiary that managed Ezubo – a peer-to-peer lending platform that claimed to let individuals lend billions of yuan to companies – have been the subject of a police inquiry since December 8, the sources said. Ezubo has been closed since then.

Investigators said they had detained some of the firms' executives, but did not reveal what they were accused of doing wrong.

Ding Ning, chairman of Yucheng, was among the detained, people close to the matter said.

Police in the southern city of Shenzhen said on social media on January 11 that they were probing Ezubo and several other Yucheng subsidiaries related to it due to suspicions they raised funds from the public illegally. Prosecutors in Guangdong said the next day that they approved the arrest of nine people who managed Ezubo's operations in the southern province on the same charge in December.

The sources close to investigators said that more than 1,000 employees of Ezubo and other Yucheng subsidiaries are suspected of wrongdoing that fall into the category of "illegally taking deposits from the public," which according to the Criminal Law is punishable by up to 10 years in prison.

Several of Yucheng's executives are also suspected of fraudulent fundraising, and police were still searching for two of them, they said. That charge was punishable by death until November, when a legal amendment changed the maximum sentence to life in prison.

Roughly 800,000 people had invested nearly 40 billion yuan in Ezubo, the sources said, adding that the firm's tally of 73 billion yuan was exaggerated. They said the police had frozen 15 billion yuan worth of assets owned by Yucheng and its subsidiaries.

Yucheng was known to have sent nearly 10 billion yuan to Myanmar's Wa State, a conflict-torn area bordering the southwestern province of Yunnan. It is not clear yet how the company spent that money.

Yucheng has said it would invest 40 billion yuan to develop a free-trade zone in Wa State, but people close to the police said it spent only about 1 billion yuan toward that end.

Investigators have found that Ding, who was born in the eastern province of Anhui and later became a citizen of Myanmar, led an "extremely luxurious" life and had relationships with several women who worked for him, the sources said.

He gave Zhang Min, Ezubo's president, several hundred million yuan worth of real estate and cash, according to the sources. Xie Jie, who headed a corporate committee in charge of preparing for the establishment of the FTZ in Myanmar, got properties worth tens of millions of yuan from Ding, they said.

Investigators were also probing the links between Yucheng and government officials in Bengbu, the city in Anhui where the firm was headquartered until moving to Beijing last year, the sources said.

In an odd demonstration of its power, Yucheng founded what it called a "militia group" in Bengbu in April, according to state news media. Officials from the People's Liberation Army in the city and the local government reportedly attended a ceremony founding the group.

Wherever Ding went, his bodyguards followed, with a haul of cash to "lubricate relationships," the sources said.

(Rewritten by Wang Yuqian)