China’s futuristic “car-eating” bus, already dead in its tracks, is now the focus of an investigation.
In theory, the Transit Elevated Bus, or TEB, is an electrically powered, 300-passenger vehicle that moves atop tracks straddling the highway while allowing road traffic to flow below. Billed as a potential answer to China’s notorious traffic congestion and air pollution, the TEB conducted its first road test run last August in the northeastern port city of Qinghuangdao, but has since mostly sat idly as a giant roadblock. Last week, the local authority announced it would remove the 300-meter tracks the bus runs on by the end of this month.
On Sunday (July 2), police in Beijing announced that it had started an investigation into the company behind the TEB for alleged illegal fundraising. More than 30 people associated with Huaying Kailai, an online financing platform that has been selling an investment product to raise money from individual investors to develop the bus, have been held, said Beijing’s Dongcheng district police bureau in a statement (link in Chinese) on microblogging site Weibo. The statement added that the police is working to recover funds from the firm, and advised TEB investors to report their complaints to local police stations. Huaying Kailai couldn’t be reached for comment. The number listed on its website is invalid and a message to the email provided bounced back.
Bai Zhiming, who runs Huaying Kailai and is also chief executive of TEB Technology Development, a Beijing-based company that purchased the patent for the elevated bus, was among those detained, according to the police statement. Bai bills himself as “the father of the TEB” on Weibo. Days after the Qinghuangdao government announced the TEB track’s demolition, Bai told Chinese media that the bus would be relocated to another Chinese city.
Transportation experts have questioned the TEB for its impracticality and the safety risks it brings to regular traffic. Previously state media had also raised concerns (paywall) over the bus’s investment offering, which was sold as a private fund with a starting price of $150,000, and promised an annualized return of 12%.
At least 72 individual investors have filed lawsuits against Bai and Huaying Kailai for private lending disputes, according to the Southern Metropolis Daily (link in Chinese), which searched China’s online verdict database. Citing a police document given by an investor, the paper also reported that Huaying Kailai and its subsidiaries had raised 9.1 billion yuan (around $1.3 billion) by October of 2016. Dongcheng police didn’t reply to Quartz’s queries on the Huaying Kailai investigation on Weibo.
Amid a slowing economy and limited investment options, China’s retail investors are being burned time and again through investments in shadowy wealth management products, especially in the booming but largely unregulated online peer-to-peer lending sector. Many angry investors who failed to recover their losses have taken matters into their own hands, organizing protests and sparking fears of social instability. In a rare talk to China’s top policy-making body this April, Chinese president Xi Jinping called financial security the basis of a stable economy.