Investors in China’s famed “straddling bus” are asking for their money back after questions arose over its fundraising methods.
The transit elevated bus (TEB) was professed to be China’s solution to traffic jams. It was designed to straddle cars on the road so it can carry commuters above normal traffic in an elevated cabin. Designed to run on rails, the project conducted its first road test in Qinghuangdao, China, on Aug. 2, reported state news outlet Xinhua.
A high level executive at the company Huaying Kailai, an online financing platform that raises money for the TEB, told Chinese media outlet Jiemian that 200 people went to the company’s headquarters to request their money back on August 9 alone, but the firm’s chairman was able to convince them otherwise at the time.
The project’s fundraising methods have been questioned by mainland media, who revealed that the chairman and actual controller of the Huaying group is also a controlling shareholder and a supervisor of the company behind the TEB.
Huaying Kailai’s TEB fund went on sale after spring festival this year, promising annual returns of 12 per cent or higher, reported Jiemian.
The project also faces questions from mainland media. An editorial in state-owned paper China Daily called for an investigation into the financing of the project. “More importantly [than technical faults], the bus may involve financial fraud, and that must be investigated,” it said.
A law professional told Xinhua that the promised return of 12 per cent is “questionable and might be misleading, as TEB is still being tested and far away from actual application.”
According to Xinhua, TEB Technology, the company behind the bus, is required to return the 300 metre section of road used in the test to its original state, meaning the rails will be dismantled. A strategic cooperation agreement between the company and the city government will expire on Aug. 31. An employee from the Qinhuangdao government told the Global Times tabloid on Monday that their agreement will be terminated at the end of August.
The feasibility of the vehicle as also been widely questioned. A transport official told Xinhua that the bus faces restrictions due to its weight, height, and maneuverability – it could tip over because of its weight and high centre of gravity, he said.