Demonstrators fear their money will be lost if the scheme shuts down. Photo: Kyodo
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https://scmp.com/news/china/economy/article/2104294/sixty-seven-held-after-big-pyramid-scheme-protest-beijing China
Sixty-seven held after big pyramid scheme protest in Beijing
Protesters staged rare demonstration in the tightly policed capital after the authorities took action to close the fund down
Demonstrators taking part in the protest on Monday. Photo: Kyodo
Beijing police have detained 67 members of a pyramid fund scheme for disturbing social order after thousands of investors staged a rare protest in the Chinese capital earlier this week.
They staged the demonstration on Monday over the government’s decision to call the scheme illegal and arrest its ringleader, Zhang Tianming.
State media reported that Shanxinhui, which means Kindness Exchange, has at least five million members and claims to help with poverty reduction.
Police quickly dispersed the protest, highlighting the authorities’ sensitivity to any sign of social disorder ahead of the Communist Party congress this autumn, which will oversee changes in the leadership.
Sixty three people were detained on criminal charges, police said in a statement. Four others were held for administrative offences, meaning they will not face criminal charges.
“Police have released some who created minor harm, but made good confessions. However there will be a crack down on those plotting and inciting the gathering,” the statement said.
It was not the first time the pyramid scheme members have staged a protest in China.
Pictures posted on Weibo, China’s equivalent of Twitter, show a demonstration held in Yongzhou in Hunan province last month after police froze more than 100 million yuan (US$14 million) in Shanxinhui funds. The government’s crackdown has fanned fears among people paying into the scheme that their money would be lost.
Shanxinhui lured investors with a promised return of 10 per cent to 30 per cent within weeks and offered “bonus payments” to those who recruited new members, the police said.
The lack of financial knowledge and awareness among the general public, as well as the country’s fragmented financial regulatory framework and a decade of low interest rates, have helped fuel the proliferation of fraudulent investment schemes in China, according to analysts.
China’s public security minister Guo Shengkun stressed action against fraudulent financial schemes to curb unrest after financial stability was highlighted at a national financial work conference earlier this month.
Some members of Shanxinhui remain convinced it is a genuine investment scheme.
“I’m just an ordinary member, I just know that we are helping the poor and the disabled,” one member from Hunan province told the South China Morning Post.
“At the bottom of the social class, I’m a beneficiary as my living conditions have improved. I don’t feel that I was cheated … I hope this platform serving the masses can be preserved,” she said.