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Restaurateur charged with theft after illegal fund-raising

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A man who launched a fast food rival to McDonald's has been charged with stealing 23 million yuan (about HK$21.5 million) from the public after illegally offering annual interest rates of 25 per cent on loans to fund his restaurant chain, according to reports.

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According to Legal Daily, Qiao Ying got the idea for the scheme when he went to Beijing in 1994 and saw the success of McDonald's on Wangfujing, the city's main shopping street.

He decided to launch a Chinese rival, Red Sorghum, but served noodles, not hamburgers.

The first restaurant opened in his native Zhengzhou, capital of Henan province, in April 1995, and was a success.

The next year, Qiao opened another branch near a McDonald's in Beijing.

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The media soon took up the subject, saying Red Sorghum was challenging McDonald's for supremacy in the Chinese market. Qiao announced that, by 2000, he would open 20,000 branches worldwide - 70 per cent in China and 30 per cent abroad.

Needing money to fund such an ambitious expansion, Qiao and his two top associates began raising capital from the public, offering annual interest rates of 25 per cent.

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