The celebrated founder of Shanghai-listed Anhui Huaheng Biotechnology Co. Ltd. (688639.SH) has been officially arrested on charges related to a now-defunct peer-to-peer (P2P) lending business she had invested in, forcing her resignation from the biotech company and halting its planned listing in Hong Kong.
The arrest of the Guo Henghua highlights the lingering legal risks for Chinese entrepreneurs who jumped on the P2P and microlending bandwagon in the previous decade, as the charges against her relate to a years-old scandal that resulted in 243 million yuan ($36 million) in investor losses.
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