A high-profile entrepreneur in Erdos in the Inner Monglia Autonomous Region is under investigation after collecting a total of 2.6 billion yuan (US$410 million) from private lenders, according to the China Business Journal.

Li Pengfei, chairman of Inner Mongolia Xinyuantai Investment (Group) Co Ltd, an industrial conglomerate in the city whose businesses cover thermoelectric power plants, waste-water treatment, toll operations and real estate development, is currently under surveillance at home as the local public security bureau investigate claims of illegal fundraising.

The case is said to involve some 1,600 creditors, according to the newspaper.

It said Li had been having difficulty in paying interest on loans since April last year, but because of the company's large business portfolio, no action appeared to have been taken until earlier this month.

On August 9, more than a hundred investors approached local government officials demanding an investigation into the state of Li's company and its assets.

Li's group has 14 subsidiaries, and most of the money raised from private lenders was used to fund the daily operation of those subsidiaries, the newspaper said, citing an unidentified source.

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