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Ant-breeding scheme brings 55 to court

FIFTY-FIVE people are on trial over an ant farming scheme in northeast China's Liaoning Province.

Shenyang Intermediate People's Court began the hearing yesterday, the Xinhua news agency reported.

Wang Fengyou, the former president of Liaoning Yilishen Tianxi Group, and the other 54 suspects face charges including contractual fraud.

Wang launched the group in January 2003 with a capital of 100 million yuan (US$14.6 million). The group's nine subsidiary companies were engaged in manufacturing and selling the Yilishen branded ant-based tonic products, the court heard.

The tonics were described as "Chinese Viagra" and the ants were spruiked as being aphrodisiacs and ideal for use in liquor and herbal remedies.

The company organized thousands of ant farmers to supply it with insects on the condition that they paid contractual bonds. But it stopped paying its suppliers in November 2007.

Thousands of farmers fearing they would lose their bonds and wages gathered at the company offices to demand payment. But Wang then allegedly paid company executives and employees to organize protests outside government buildings, according to previous Xinhua report.

The group entered bankruptcy on November 30, 2007.

Prosecutors became involved and filed charges against Wang and the other 54 suspects.

Yesterday's hearing lasted more than five hours. Because of the large number of defendants on trial, yesterday's hearing simply focused on facts including the formal identification of the defendants.

The trial continues.

The Yilishen group is not the first company involved in ant farming schemes that have gone wrong.

Wang Zhendong, board chairman of Yingkou Donghua Trading (Group) Co Ltd in Liaoning, was sentenced to death in February 2008 for running a bogus ant-breeding project that defrauded investors of 3 billion yuan.

His 15 company managers received jail sentences of between five and 10 years.


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