CreditEase CEO denies loan default in letter to employees

The CEO of CreditEase, one of China's leading peer-to-peer (P2P) lenders, said that allegations about the firm defaulting on 800 million yuan ($128.77 million) in loans stem from deceptive competitors, according to a copy of an internal letter obtained by the Global Times on Monday.

As the government is committed to supporting the development of inclusive and Internet finance, CreditEase has embraced unprecedented opportunities for growth, Tang Ning, CEO of CreditEase, said in a letter to the company's employees late on Sunday.

Tang said in the letter that during the rapid development of the sector, there will occasionally be noises [criticisms], immoral and nonstandard competition and business practices. The incident [the rumor of default] is one such practice, the letter said.

CreditEase's alleged 800 million yuan default of projects in Northeast China was intensely covered in the past week by Chinese mainland and Hong Kong news outlets. Guangzhou Daily, for example, reported on Thursday that bad loans at CreditEase may have reached 1 billion yuan, involving projects such as real estate, energy and bulk commodities, citing an unnamed source.

The CEO's letter said that CreditEase has only three projects in Northeast China involving 264 million yuan in loans which are all operating well.

The company only allocates 13.1 percent of the nearly 50 billion yuan of assets it manages each year to real estate projects, which are backed by high-value collaterals, the letter said.

Tang said he is confident about the company's prospects.

CreditEase on Thursday denied news claiming the default, adding that the risks of its projects were controllable.

P2P lending companies match people who want to invest money with individuals who seek loans, usually via online auctions, while promising higher return for investors.