Thousands in Shenyang in protest over financial losses from ‘ant farming’ scam
Last month, thousands of citizens of Shenyang, capital of north-eastern China’s Liaoning province, demonstrated in the streets, surrounding government offices and demanding government aid.
They hoped to obtain help in recovering money they had invested into a pyramid-style financial scheme, based around raising ants which were to be used in the manufacturing of an aphrodisiac drug.
Up to 1,000 anti-riot police and troops were deployed in Shenyang in order to calm the protests and shield the headquarters of the local China Communist Party.
The company behind the scheme, Yilishen Group, reportedly encouraged investors, many of whom have now joined the swelling ranks of unemployed farmers in the region, to put their life savings into the scheme that was claimed to raise ants to provide ingredients for a health tonic which was to be touted as an aphrodisiac.
Yilishen Group’s main product line was banned from being sold in the United States, due to the fact that it contained the active ingredient in Viagra, despite being marketed as a ’health supplement’ rather than as a drug.
Investors into the ant farm were promised a dividend of 3,250 yuan on every 10,000 yuan that they paid into the company as a ‘deposit’.
Last year Wang Zhendong, a businessman behind a similar ant scam, was sentenced to death after scamming investors out of 800 million yuan.
In this case, however, investors believed that Yilishen Group were a legitimate company as they were known to have good contacts with the local communist leadership.
Despite that, Yilishen Group has failed to pay dividends in each of the last two months, leading to speculation that the company was facing imminent bankruptcy, or that the government may have put a hold on their funds.
10 billion yuan scam?
It is believed that up to 3 million residents of Liaoning have deposited money with Yilishen Group, generating funds in excess of 10 billion yuan for the company.
There have been suspicions in the past that the group has been nothing more than a scam operation, though it has survived several probes and investigations. Many overlooked the negative comments though because Yilishen’s ties with the local government, and its commercials on state television, had led many to believe that they must be legitimate.
Since the time of the protest there has been an increase on anti-government comments left on official websites, along with a large number of negative posts being made on personal blogs within China.
Most are censored though and disappear within hours.