A court in China has issued a life sentence to the founder of a tech startup and his brother on charges of “fundraising fraud” according to reports published in the local media in the country.

Ding Ning, founder of Chinese online peer-to-peer lender Ezubao and his younger brother, Ding Dian, were served the sentence this week by the Beijing No. 1 Intermediate People’s Court.

It has been alleged that the company had promised investors returns of 9 to 14.6 percent against the deposits that they make. But according to investigators of the case, more than 95 percent of the borrowers of the money were fictional entities created by Ezubao, as confessed by a former executive of the firm. It is alleged that the duo gad cheated about $7.7 billion of investors’ money and is amongst the biggest financial scams of the country.

Ezubao is one of the largest player in the informal finance industry in China and the Chinese authorities have allegedly allowed the flourishing of this industry by not according enough oversight in the last decade so that smaller entrepreneurs who are unable to get debts from large banks can get capital for their business ventures. But the slow economic growth in recent years has seen a failing of a number of such lenders which has resulted in huge degree of investor protests and anger.

The court also issued prison sentences ranging between three to 15 years for 24 other executives of the company.

The media reported that a total of 1.9 billion yuan ($291 million) in fines were levied on two companies affiliated with Ezubao. There was also o\conviction for some of the defendants on other charges of such as smuggling precious metals and illegal gun possession.

Ezubo was seized by regulators in December 2015 on charges that the firm was taking in deposits without a license. The reports also said that the assets of the company have been acquired by the authorities to repay the investors but no details of the value of the assets were provided.

The relaxed attitude of Chinese regulators to this finance industry segment was aimed at creating more jobs and wealth by supporting entrepreneurs who are mostly not in a position to avail loans from the state-owned banking industry. This industry had a value of about to 1.5 trillion in 2015 according to estimates of the national bank regulator.

Media reports painted Ding, (34) as a high school dropout who gained experience in running online sales by working at his mother’s hardware factory. Ezubao was launched in July 2014 with multiple marketing offices throughout China even though Ding possessed no technical or financial training.

The court order read that Ding and the other convicts “inflicted huge losses on investors in many parts of China and disrupted the national financial management system,” according to media reports.

Courts in China had on two earlier occasions served death sentences to two businesswomen from southern China for “illegal fundraising” in 2012 and 2013.

(Adapted from TheIndianExpress.com)