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Company faces trial over pyramid scheme
By Wang Xiang |
January 28, 2010, Thursday
|
Online Edition
Online Edition
A COMPANY faced trial in central China today for illegally raising 3.77 billion yuan (US$552.2 million) in six years, causing 62,000 people to lose 1.8 billion yuan.
Chenzhou City Intermediate People's Court in Hunan Province heard the case that lead to 113 arrests in Xiangxi Tujia and Miao Autonomous Prefecture, reported Southern Metropolis Daily today.
The investigation lasted more than a year as the massive scheme reached almost everybody in the prefecture, Gong Jiahe, the head of the provincial prosecutors told China News Service.
The illegal fundraising business started in Xiangxi in 2002. Rongchang Group, the firm on trial, attracted government officials to invest in it by offering high interest rates of up to 12 percent a month, the court heard.
Officials helped persuade residents to put their money in and took commissions for those they signed up. However, in 2008, rumors swirled of the company's collapse, and officials pulled more than 1 billion yuan from the company in less than two weeks.
So far, more than 1.8 billion yuan is missing and thousands of Xiangxi investors attacked government offices and train stations last September asking for their money back.
Chenzhou City Intermediate People's Court in Hunan Province heard the case that lead to 113 arrests in Xiangxi Tujia and Miao Autonomous Prefecture, reported Southern Metropolis Daily today.
The investigation lasted more than a year as the massive scheme reached almost everybody in the prefecture, Gong Jiahe, the head of the provincial prosecutors told China News Service.
The illegal fundraising business started in Xiangxi in 2002. Rongchang Group, the firm on trial, attracted government officials to invest in it by offering high interest rates of up to 12 percent a month, the court heard.
Officials helped persuade residents to put their money in and took commissions for those they signed up. However, in 2008, rumors swirled of the company's collapse, and officials pulled more than 1 billion yuan from the company in less than two weeks.
So far, more than 1.8 billion yuan is missing and thousands of Xiangxi investors attacked government offices and train stations last September asking for their money back.
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