EVERYONE knew about the murder and subsequent stand-off with Tianjin police, but most investors had thought the patriarch of China's richest village, Daqiuzhuang, was untouchable. Mr Yu Zuomin, 63, had been a long-standing member of the Chinese People's Political Consultative Conference and was rumoured to have good relations with the family of senior leader Deng Xiaoping. It was even said that Mr Yu would regularly have dinner with Mr Deng when he was in Beijing. So when Mr Yu's arrest for shielding criminals and obstructing police in their line of duty was announced in the official media last week, the effect on the Tianjin black market stock exchange was dramatic. Internal shares issued by Daqiuzhuang companies crashed in just one day from a high of 5.8 yuan a share to just 0.4 yuan. One investor who had bought 10,000 shares in the Wanquan Shareholding Co at 2.4 yuan a share said: ''It's a disaster. I lost 20,000 yuan [about HK$27,120 at official rates]. ''I knew a long time ago about that business over there but I really didn't think it would have any economic effect,'' the middle-aged man was quoted by the Beijing Youth Daily as saying. Wanquan, part of the group where the murdered man Wei Fuhe was said to have worked, issued 9.9 million individual internal shares with a face value of two yuan each last August. The previous month, another Daqiuzhuang company, Yao-Shun Development, had issued 12 million individual shares, again with a face value of two yuan. It is doubtful if the two companies actually had permission to issue internal shares and it was certainly illegal for them to be traded on the open market. But at that time Daqiuzhuang was such a hot ticket that everyone was looking for a piece of the action and company employees would have been fools not to sell their shares for as much as they could get. The share prices rapidly shot up to about four yuan a share and were soon trading on Tianjin's ''Wall Street'' - the city's unofficial financial centre on Liberation North Road - at up to 5.8 yuan. Even when the murder took place on December 13 last year, investors continued to pour their money into the village. It was only in February when Tianjin police tried to investigate Mr Wei's death and were met by a heavily armed militia dispatched by Mr Yu to defend his kingdom did some investors begin to get worried. ''Some people started to get nervous when these stories of about 1,000 police surrounding Daqiuzhuang started to filter out but very few thought the village's economic growth would be affected,'' said a Beijing businessman who travels frequently to Tianjin. Despite the danger signs, many large companies continued to put their faith and their money into Daqiuzhuang. The village had achieved a gross domestic product of 4.55 billion yuan the previous year and there seemed no end to its spectacular rate of growth. But without Mr Yu at the helm, the village is rapidly going to seed and it seems almost certain that Daqiuzhuang will record nothing like the economic growth in 1993 it has seen over the past five years. Daqiuzhuang was largely Mr Yu's creation and its future will depend on how leniently the authorities decide to treat him. If, as seems likely, Mr Yu is let off with a strict warning, the village could well recover some of its former glory. But if Beijing decides it really wants to make an example of the chain-smoking peasant entrepreneur turned bad, then that will be the end of China's richest village.
