A WEEK after he received a flyer from Danxia Jiada Agricultural Technologies Co. which promised returns of at least 25 percent annually, Chen Hua invested 500,000 yuan (US$74,627) in the company in March.
It sounded like a perfect investment, but the hasty decision by Chen, 81, was not supported by his family.
He didn t know much about the company, yet he invested a large sum, said Chen s wife, identified only as Wu. He wouldn t listen to us and insisted on investing in the company.
Chen is one of thousands of senior residents in Shenzhen who have been targeted by many companies.
Another resident identified as Lou also told the Shenzhen Evening News that his father had also invested 300,000 yuan in January in a spirits distillery which also promised high annual returns of up to 30 percent.
Lou said his father received the distillery s flyer on the street and had attended a banquet at the invitation of the company. He decided to invest in the company after returning from the banquet.
The manager of the Jiada company told the News that about 600 individuals had invested in his company since March with the largest single investment topping 13 million yuan. He refused to identify the investor, saying only that they were quite confident in the company business, which he said would involve growing olive trees for the production of olive oil.
There were many companies such as Jiada which were aggressively pursuing individual investment in Shenzhen. I can tell you that the number is 104, said the Jiada manager in his office in the International Trade Building in Luohu District. The paper did not name the manager.
The manager said he was quite sure of the number because: I ve done my homework to get a picture of the market in the business I m in.
He said competition (for investors) was fierce. We don t really have specific client targets, but seniors are the majority.
The paper said senior residents were targeted by these companies because they had accumulated a certain amount of wealth when they retired. And, they have time to attend our promotions, an unidentified manager of the distillery told the News.
The paper said most of the companies were branches or subsidiaries of companies in other cities and provinces and were unlicensed.
They can t wait even though they haven t registered with local authorities, said an unidentified lawyer whose client has sued a company which failed to produce the 35-percent returns promised. The investor cannot get her money back.
The woman, who refused to be named, invested 20,000 yuan in an Inner Mongolian wine company in December last year. The company promised an annual return of 28 percent.
Managers of the wine company, Wang Jinglan, Wang Weifeng and Li Guisheng, were convicted of unlicensed business by the Futian District Court in July and sentenced to up to three-and-a-half years in jail, the News said. (SD News)
