Hundreds in Shanghai demand action on alleged Ponzi scheme

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SHANGHAI: Hundreds of protestors gathered in Shanghai on Monday demanding that the government investigate an investment company that has failed to pay them since last year.

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Police tried to clear the crowd from in front of the Shanghai city hall, where around a dozen people handed out pamphlets accusing the Dada Group of making off with their money.

Police froze the group’s accounts in December, when respected business magazine Caixin said 29,300 people had invested a total of 190 million yuan ($28.4 million) in its online products. It also had several offline offerings.

China’s consumer investment sector is poorly developed and regulated, and Ponzi schemes have become common in recent years as cash-rich investors, burned by stocks and real estate, search for alternatives for their money.

At Shanghai’s prosecutors’ office, where a second group of demonstrators gathered on Monday, Shao Tiejun, 35, told Agence France-Presse he had invested more than 200,000 yuan through Dada Group after the company promised him a 7 percent return.

His suspicions were only aroused when the accounts were frozen.

“This money is basically my life savings. I’m 35 and I have kids and parents to support,” he said, adding he now only hoped to get his principal back.

“Even if there is one thread of hope, I will keep fighting for it.”

He had traveled over eight hours by bus to attend the protests, he added.

According to Caixin, Shanghai’s economic investigation unit detained Ma Shenke—the “actual controller” of Dada’s parent company, Shanghai Shentong Group—in connection with an investigation.

In June, prosecutors said that police had brought charges against Ma and an additional 19 people for “illegally absorbing public deposits and fraud”.

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