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April 23, 2012

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Villagers fear for 10m yuan after borrower vanishes

DOZENS of villagers in the Pudong New Area have been left in the lurch after a steel company boss who borrowed millions of yuan from them suddenly disappeared.

Villagers from Tangzhen Town in Pudong said the Shanghai Hangxing steel company promised twice the interest banks paid and had borrowed more than 10 million yuan since 2004.

But after receiving thousands of yuan per quarter for years, villagers recently stopped hearing from the boss, who was not named.

"Money had been lent to the company for years and the interest was always paid on time - until the boss disappeared," according to a villager, surnamed Zhang, one of the creditors.

Hangxing owns a four-story, 5,000-square- meter factory on Chuansha Road.

The company moved away from there several years ago, leasing the premises to a supermarket, a hotel, hardware manufacturers and several stores.

While no Hangxing employees remained on the site, the lending arrangement continued as before, villagers said.

"At the beginning, they borrowed from well-known officials in the village. Some lent them tens of thousands, some lent hundreds of thousands," Zhang said.

"The interest they offered was not low and hearing that officials were paid their interest, I joined them."

Zhang lent the company 100,000 yuan (US$15,852) in 2006 and was paid 1,000 yuan per month in interest over the next four years.

"The interest was even raised once to 1,200 yuan a month," Zhang added, saying he earned more than 400,000 yuan in interest in total.

High interest attracted many other villagers, with some lending 2 million yuan at a time, Zhang said.

Receipts villagers received, while bearing the Hangxing stamp, indicated that this was a private arrangement between the business and residents.

Now, villagers face an anxious wait to see if they can recover the 10 million yuan Hangxing borrowed.

Pudong police said they are investigating the case.


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