LUOHU police have arrested 92 people linked to an investment company that allegedly cheated people out of 37 million yuan (US$5.7 million) by getting them to invest in a chemical fertilizer factory.
The company s head office in Dongmen was searched by police and the finance authorities last week. Fourteen premises were raided and 92 people arrested, including the man in charge of the firm. Authorities estimated that more than 37 million yuan was involved in the alleged fraud. A total of 64 accounts were frozen.
In one case, a 51-year-old Hong Kong man signed a share subscription form to invest 1.5 million yuan by buying 250,000 shares.
In another case, a 73-year-old woman whose identity was not disclosed gave the firm more than 60,000 yuan. Shenzhen police said she had lost almost all her life savings.
According to the city authorities, the firm had illegally raised funds from around 50 people, most of them aged 50 or older.
The firm had been running since June and was based in a commercial building in Dongmen. In the alleged scam, the company claimed investors could enjoy as much as 42 percent returns a year if they invested in the fertilizer factory in neighboring Huizhou.
They also said the factory had been planned for nine years and construction would be approved soon.
When recruiting staff, it said they could be rewarded with 8 percent of investors input.
The firm s Web site said it belonged to a bio-fertilizer group and it owned a number of patents. It also claimed to co-operate with many research organizations and universities abroad.
(SD-Agencies)
