Authorities in Inner Mongolia have taken over a series of timber plantations that were at the centre of one of the mainland's biggest financial scams, giving some hope to the nearly 40,000 people, mostly retirees, who sank 1.3 billion yuan into the scheme.
The government of the Inner Mongolia autonomous region, where the giant Wanli Forestation ponzi scheme was based, said it had taken control of the 'million-hectare' plantation after the company's 'lawful dissolution', Xinhua reported yesterday.
The decision comes as increasing international attention focuses on China and Beijing appears concerned about resolving issues of social stability.
Analysts said endorsing Inner Mongolia as administrator of the plantations was a pioneering, exemplary step.
Former TV actor Chen Xianggui, who made his name playing a dependable, honest and entrepreneurial village cadre, and Wanli manager Liu Yanying are accused of duping 40,000 investors out of 1.2 billion yuan. Investors paid about 24,000 yuan per hectare to buy into the tree-planting scheme on promises that they would quadruple their money within a decade.
All cities, townships and even villages must assume complete financial and managerial responsibility for the plantations.
If there are massive or unnatural die-offs of trees, village or township heads will be held responsible and face punishment. The government has also assumed ownership of the plantation land, which Wanli bought from farmers.
In two years the company set up more than 100 branches and attracted thousands of investors until newspapers in Jilin and Heilongjiang investigated the scheme.