Officials blamed in ant-potion scandal

PUBLISHED : Friday, 14 December, 2007, 12:00am
UPDATED : Friday, 14 December, 2007, 12:00am


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The Liaoning government should take the blame for the controversy surrounding the bankruptcy of a company that produced and sold a well-known aphrodisiac made from ants in what officials are calling a pyramid scheme, victims and rights activist said yesterday.

The scheme is believed to involve at least 10 billion yuan and a million investors.

The arrest of Wang Fengyou, president of the bankrupt Yilishen Tianxi Group, for allegedly instigating social unrest has furthered angered investors, who believe they have been conned.

Many also accused the province of trying to divert public focus from Wang's alleged illegal money-raising by charging him over causing social disturbance, not scamming.

Wang allegedly paid employees and executives about 1.4 million yuan to protest outside provincial government offices in Shenyang last month, early reports said. But reasons behind the demonstrations are still unclear.

Shenyang-based activist Sun Haiyang said nearly 30 police cars had been stationed outside the government offices since last month to prevent further protests.

'The Yilishen incident has caused social unrest. Most of the victims are rural people living near Shenyang,' Mr Sun said. 'Many of them had put every penny they made from selling their land [into the scheme].'

Li Decai, a 56-year-old from the Xinbin county, invested 30,000 yuan in the scheme but only got 13,000 yuan back during the six months he invested.

He blamed the government for his loss, saying authorities were fully aware of Yilishen's business from the start but still allowed it to operate for eight years.

Mr Li said he had thought the company was trustworthy because of the endorsement by celebrities and political figures.

Well-known comedian Zhao Benshan made a commercial, and Mr Li said investors received a calendar featuring photos of Wang with officials.

'The commercial was run on television every day and I heard the scheme had been going on for eight years,' Mr Li said. 'I thought it was a guaranteed investment.'

Wang has been a delegate of the People's Political Consultative Conference since 2002. He was praised as an outstanding philanthropist by the state media.

The advert claimed the aphrodisiac potion was a pure Chinese herb prescription. But in 2004, the US Food and Drug Administration warned consumers not to use Yilishen after it was found to contain prescription-strength sildenafil - a key ingredient in Viagra.

But the US warning failed to reach the mainland media. The company was among the first to be offered a direct sale permit by the Ministry of Commerce last year.

Yilishen promised its investors a dividend of 3,250 yuan for every 10,000 yuan they invested in the ant-breeding scheme. However, the group twice delayed dividend payments since October.

The Shenyang Municipal Intermediate Court declared Yilishen bankrupt last month, sparking panic among investors that they could lose all their money.

Ant farmers across Liaoning were told to inform local government about their involvement and that they would receive further information in March. The farmers are hoping that the government will offer them compensation.