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AboutShijiazhuang Tonghe Electronic Technology Co., Ltd. is a high-tech enterprise dedicated to technological innovation, product innovation, and management innovation in the power electronics industry. It integrates R&D, manufacturing, sales, and service in the power electronics sector, providing customers with comprehensive energy solutions. -
ProductAfter more than two decades of rapid development, the company has established an industrial structure centered around three major business segments: smart grids, new-energy vehicles, and aerospace. Its sales network covers over 30 provinces, municipalities, and autonomous regions across China, and its products are exported overseas, earning unanimous praise from both domestic and international customers.
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PartnerIn the future, the company will continue to uphold its corporate mission of “embracing an entrepreneurial spirit, focusing on power electronics, efficiently utilizing energy, and serving global users,” while adhering to the core values of “contribution, mutual benefit, gratitude, efficiency, and innovation” to provide users with high-quality products and services.
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BlogsCommunicate with sincerity and courageously take responsibility; keep the customer at the center of our focus, continuously optimize the company’s management systems and processes, consistently identify and meet customer needs, deliver and enhance customer value, and maintain the company’s rapid growth.
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Join usThe company consistently upholds a talent philosophy centered on “people first,” actively fostering an atmosphere of respect, understanding, integrity, and friendliness. We provide a robust platform for talent development, enabling our employees to become powerful pillars of the company’s sustained growth and achieving mutual growth and shared success between the company and its talents.
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InvestorDisclose information relevant to investors’ decision-making in a truthful, accurate, complete, timely, and fair manner; strengthen communication and engagement with investors; and enhance and improve investor relations management.
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ContactWith a spirit of self-respect, self-reliance, and relentless self-improvement, coupled with an open mind, we focus on customer needs based on continuous learning and absorption. We dare to take risks, keep exploring, and steadily build management models and technological products that reflect our unique characteristics.
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No. 350, Lijiang Road, Shijiazhuang High-tech Zone
A Comprehensive Look at Preventing Illegal Fundraising
Release time:
Apr 28,2021
I. Definition and Characteristics of Illegal Fundraising
Definition: Refers to the act of raising funds from the general public by legal entities, other organizations, or individuals without obtaining approval from the relevant authorities. Currently, China’s Criminal Law stipulates four types of crimes related to illegal fundraising, namely the crime of illegally absorbing public deposits, the crime of fundraising fraud, the crime of fraudulent issuance of stocks and bonds, and the crime of unauthorized issuance of stocks, corporate bonds, and enterprise bonds.
Main characteristics: ① Fundraising that has not been legally approved by the relevant authorities, including fundraising approved by departments lacking the authority to do so, as well as fundraising approved by departments with approval authority but exceeding their authorized scope. ② Committing to repay the principal and pay interest to investors within a specified period. The forms of principal and interest repayment include, in addition to monetary payments, also repayment in kind and other forms. ③ Raising funds from unspecified members of the public—that is, raising funds from the general public. ④ Using legal forms to conceal the illegal nature of the fundraising activity.
II. Main Forms of Illegal Fundraising
Illegal fundraising activities cover a wide range of areas and take many different forms. Based on current cases, they mainly fall into four major categories: debt rights, equity investments, commodity marketing, and production and business operations. 1. Raising funds illegally under the guise of agricultural cultivation, animal husbandry, project development, estate development, or ecological and environmental protection investments; 2. Conducting illegal fundraising by issuing—or disguisedly issuing—securities such as stocks, bonds, lotteries, or investment funds, or by using futures trading or pawnbroking as a pretext; 3. Raising funds illegally through share subscription, equity participation with profit distribution; 4. Raising funds illegally via membership cards, membership certificates, seat certificates, discount cards, or consumer cards; 5. Raising funds illegally by means of commodity sales combined with lease-back arrangements, buyback and transfer schemes, member recruitment, merchant franchising, and “fast points systems”; 6. Utilizing informal “hui” groups, community associations, or underground moneylenders to carry out illegal fundraising; 7. Employing “virtual” products created using modern electronic network technologies—such as “electronic shops” or “electronic department stores”—and engaging in entrusted management or buyback at maturity to raise funds illegally; 8. Dividing property and real estate assets into equal shares and raising funds illegally by selling the right to dispose of these shares; 9. Raising funds illegally through signing commodity distribution contracts or similar agreements; 10. Conducting illegal fundraising via pyramid schemes or clandestine networking; 11. Raising funds illegally by establishing investment funds via the internet; 12. Raising funds illegally through “electronic gold investment” schemes.
III. Typical Methods of Illegal Fundraising
The methods of illegal fundraising are constantly evolving, and the following six typical approaches are particularly common:
(1) Using the guise of a private bank, they take advantage of the government’s policy supporting the establishment of financial institutions by private capital, falsely claiming that they have already obtained or are in the process of applying for a private bank license. They then fabricate the identity of a private bank to issue initial public shares or attract deposits.
(2) Non-financing guarantee companies illegally raise funds under the guise of conducting guarantee business, primarily through two main channels: first, by issuing fictitious wealth management products; and second, by fabricating borrowers and illegally absorbing funds under the pretext of providing loan guarantees.
(3) Using the guise of overseas investment and high-tech development, these individuals set up websites impersonating or fabricating well-known international companies, and post online information about selling overseas funds, initial public offerings (IPOs), overseas listings, and high-tech development projects. They falsely claim promising prospects for equity appreciation or offer guarantees of exceptionally high returns, thereby luring the public into transferring funds to designated personal accounts. Once they have collected the money, they shut down the websites and abscond with the funds.
(4) Under the guise of “elderly care,” this takes two main forms: First, using the pretext of investing in retirement apartments or joint elderly care programs in other locations, they lure elderly people into “joining and investing” with promises of high returns and the provision of elderly care services. Second, by organizing so-called health seminars, offering free medical checkups, providing free tours, and distributing small gifts, they entice elderly individuals to invest their money.
(5) Illegally raising funds under the guise of repurchasing collectibles at high prices. Using so-called collectibles—such as commemorative coins, commemorative banknotes, and stamps that are either worthless or low-priced—as tools, these fraudsters claim that these items have enormous potential for appreciation and promise to repurchase them at high prices after a specified period, thereby luring the public into making purchases and then absconding with the funds.
(6) Illegally raising funds under the guise of P2P. This involves leveraging the concept of internet-based financial innovation to establish so-called P2P online lending platforms, using high interest rates as bait and employing tactics such as fabricating borrowers and funding purposes, as well as posting false tender information, to attract public funds. The websites are then suddenly shut down, or the operators abscond with the funds.
IV. How to Identify and Prevent Illegal Fundraising Activities
The general public should pay attention to the following four aspects when identifying and preventing illegal fundraising:
First, we must clearly understand the nature and dangers of illegal fundraising, enhance our ability to identify such schemes, and consciously resist various temptations. We should firmly believe that "there’s no such thing as a free lunch" and conduct a sober analysis of investment projects promising "high returns" or "rapid wealth," thereby avoiding falling victim to scams.
Second, it is important to correctly identify illegal fundraising activities. The key factors to consider include whether the entity involved holds a legal qualification and whether its fundraising activities have obtained the necessary approvals; whether funds are being raised from unspecified members of the public; whether the entity promises returns—illegal fundraising typically involves offering a guaranteed rate of return on investments; and whether the entity uses legal-looking forms to conceal the illicit nature of its fundraising activities.
Third, we must strengthen our awareness of rational investing. High returns often come with high risks, and irregular economic activities pose even greater risks. Therefore, it is essential to enhance our awareness of rational investing and protect our rights and interests in accordance with the law.
Fourth, we must strengthen our awareness of the principle that participants in illegal fundraising bear their own risks. According to China’s laws and regulations, any losses incurred as a result of participating in illegal fundraising activities shall be borne by the participants themselves. Moreover, any debts or risks arising from such activities may not be shifted onto state-owned banks, other financial institutions, or any other entities that did not participate in the illegal fundraising. Therefore, when certain organizations or individuals tout high-interest deposits, stocks, bonds, funds, or development projects with promises of exceptionally high returns, you must carefully identify these offers and invest prudently. The state stipulates that loan interest rates exceeding four times the benchmark rate are not legally protected; this can serve as a useful reference for determining whether the promised returns are excessively high. There’s no such thing as a free lunch—high returns invariably come with high risks, and the goal of criminals is to defraud people out of their money. High-yield investment returns are very likely to be accompanied by illegal fundraising activities.
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