SHANGHAI, July 2 (Reuters) - A court in the southwestern Chinese city of Kunming has completed a two-day trial of officials connected with the scandal-hit Fanya Nonferrous Metals Exchange, which collapsed in 2015 owing more than 40 billion yuan ($6.03 billion) to investors.
State news agency Xinhua said late on Sunday that 21 suspects - including Fanya’s chairman Shan Jiuliang - were in court on Saturday and Sunday on charges of embezzlement and the illegal collection of bank deposits.
According to the indictment, Shan and the other defendants were also accused of violating national financial management laws and regulations, and of causing “major economic losses”. A verdict will be reached at a later stage, Xinhua said.
The trial has been held under tight security, with some local investors even forced to leave the city ahead of the proceedings.
One investor told Reuters that the court building in Kunming on Sunday was “like in a state of martial law”, with police blocking access for both vehicles and pedestrians.
The investor said that despite promises from the local government, none of the alleged victims of the scheme were permitted to attend the trial.
The Fanya exchange was launched in 2011 with a mission to stockpile 14 rare metals, including indium, and thereby secure greater Chinese control over global prices. It also offered annual returns of 13.68 percent to individuals who invested in a financial product run by the exchange.
But all transactions and accounts were frozen in April 2015 amid “liquidity” problems, prompting a series of protests outside the exchange in Kunming and at the offices of China’s financial regulators in Beijing and Shanghai, with investors accusing chairman Shan of running a Ponzi scheme.
Kunming police confirmed in 2016 that “illegal activities” had taken place at the exchange and that further investigations were underway. ($1 = 6.6321 yuan) (Reporting by David Stanway; Editing by Michael Perry)