The 135 people involved in the network are put on trial on Thursday. — VNA/VNS Photo

A Chinese-led network has been accused of operating illegal loan apps in Việt Nam, charging exorbitant interest rates and engaging in aggressive debt collection tactics.

The 135 people involved in the network, led by the 36-year-old Chinese national Li Zhao Qiang, were put on trial on Thursday. Qiang is believed to have fled Việt Nam, and a warrant has been issued for his arrest.

The case, heard by the Hà Nội People's Court, centres on allegations that Qiang entered Việt Nam in 2017 and created a score of lending apps targeting Vietnamese borrowers.

These apps, including Cash VN, Ovay and Vaynhanhpro, offered loans at staggeringly high interest rates, ranging from 1,570 to 2,190 per cent annually.

Qiang allegedly enlisted Nguyễn Quang Vũ, a 35-year-old Vietnamese national in Hà Nội, and others to establish and run a series of front companies.

Qiang also recruited two Chinese nationals—Zhang Min, 38, and Liu Dang Yang, 32—to recruit Vietnamese employees. These employees were tasked with attracting borrowers, appraising loan applications, and collecting debts.

The network's intricate structure involved two key companies - Newstar Vietnam Technology LTD and Vietstar TM Services LTD - which oversaw the operations of all the front companies.

Vietstar TM Services LTD was crucial in distributing loans via intermediary electronic payment companies, primarily Vietnam Yoopay Information Technology JSC.

Prosecutors allege that Yoopay Information Technology JSC, established and financed by Qiang, operated without the necessary licences in Việt Nam.

Chinese nationals were reportedly hired to develop and maintain its electronic payment system, facilitating the lending and collection process.

Qiang allegedly funnelled money into Vietstar TM Services LTD's bank accounts to finance the lending operation.

Potential borrowers were instructed to download the apps and create accounts, providing personal information. The appraisal department then verified this information before approving the loan.

If the borrowers missed payments, Qiang's employees allegedly resorted to ruthless debt collection tactics, including relentless calls and texts filled with threats and insults and even public shaming through doctored photos posted on social media.

Prosecutors allege that the network issued over VNĐ1.6 trillion (US$64 million) in loans to about 121,000 borrowers between January 2019 and May 2022, reaping illegal profits of more than VNĐ700 billion ($28 million).

Li Zhao Qiang is believed to be on the run. Hà Nội police have issued an arrest warrant and are working with the Ministry of Public Security to initiate international arrest procedures. — VNS