BEIJING: Chinese speculators who claim to have lost money on risky investments mounted a rare protest in Beijing on Tuesday, a uncommon sight in the capital despite plunging prices on the country’s stock exchanges.
Several dozen investors—surrounded by police—stood outside the office of China’s top anti-graft agency complaining they were tricked by the Fanya metals exchange.
Many Chinese financial institutions offer high return investment schemes based on increasing asset prices, but slowing growth has heightened fears that such products could go bust, potentially sparking social unrest.
The Fanya exchange in southern China offered investors a bet on increased metal prices, promising some double-digit returns on their investments.
But with commodities plunging worldwide, metals prices have fallen this year and some of the exchange’s reported 220,000 investors say that they are not able to withdraw funds as promised.
The problems date back to mid-April, reports said, predating the Chinese stock market plunges that began in June.
China’s main financial institutions are government-run, and many expect the state to step in when the investments they have chosen go bad.
One protester named Peng Yuan told Agence France-Presse he invested more than one million yuan ($160,000) in the product, using family savings and credit card debt.
“I’m in debt—hundreds of thousands that I put in were borrowed money,” said Peng, who is unemployed and in his 50s. “This is outright fraud and robbery.”
Zhou Yuanyue, a retired woman from Jinggangshan in Jiangxi province, said she poured more than three million yuan into Fanya, including from her siblings and her parents’ pensions, who trusted her to manage their investments.
“They took our money and it’s gone.”
Investors wore white t-shirts calling Fanya a “scam” and appealing for a police investigation into the exchange, pictures posted online showed, with officers far outnumbering protesters.
On its website, Fanya has blamed “macro-economic conditions and policy factors” for difficulties traders were having “getting their cash back,” adding it was taking “measures to restore market liquidity.”
Tuesday’s demonstration was the latest in a series by Fanya investors, and followed a larger one on Monday, when several hundred gathered outside the office of China’s top securities regulator, according to images online which were rapidly censored.
Large-scale protests are rare in the tightly policed capital.
Last month, investors seized Fanya’s chairman Shan Jiuliang at a Shanghai hotel and handed him over to police, reports said. He was later released.