(Yicai Global) Aug. 28 -- Qbao.com denied media reports that it had absconded to defraud investors, saying yesterday its current operations are all normal.

The reports are seriously inaccurate and constitute defamation and Qbao.com will brandish the weapon of the law to safeguard its legitimate rights, it said.

Qbao.com is an online e-commerce platform and 'financial services' provider whose website promises investors up to 40 percent returns. Prospective users pay to register in a manner reminiscent of the early US Amway, and thus the arrangement displays the hallmarks of a classic Ponzi scheme. Its Shanghai headquarters have now been vacated, with only strewn garbage remaining on the premises. Investors have discovered they are unable to withdraw funds via the Qbao app. Screenshots one investor provided show an account containing millions of yuan frozen by the Qbao system because of 'abnormal operation,' as reported by Financial Practitioner, an account on China's popular WeChat messaging and payment platform run by Tencent Holdings Inc. [HK:0700].

Jiangsu Qianwang Intelligent System Co. originally founded Qbao, but Chengdu Qiankun Intelligent System Co. now operates it. The similarity in name between the two companies suggests a connection, possibly an alter ego, but no confirmation on this point is yet forthcoming.

Qbao's registered users have reached 200 million, and the platform's turnover exceeds CNY50 billion (about USD7.5 billion), Qbao claimed on its official WeChat account. If the reports of fraud are true, this would make it the largest illegal deposit and fundraising platform in China after the notorious case of peer-to-peer lending platform Ezubao run by Jinyirong (Beijing) Network Technology Co.