China cools protests over ant aphrodisiac scheme

China cools protests over ant aphrodisiac scheme
BEIJING (Reuters) - Chinese officials have sought to headoff fresh confrontation after thousands of investors in thenortheast protested to demand help getting money back from aget-rich-quick scheme raising ants to make an aphrodisiactonic.
Several thousand irate investors from across Liaoning, arustbelt province striving to attract investment, demonstratedaround provincial government offices in the capital, Shenyang,in past days.
Provincial officials said they were working to defuse thecomplaints, avoiding the harsh words that wary authoritiesoften use against protests.
"The provincial government has paid great attention to thissituation, and will take appropriate measures within theframework of the law," Zhang Yunqiang, propaganda director ofthe Liaoning provincial government, told Reuters. "Thebesieging of the office has gradually eased."
But residents told Reuters officials had set up checkpointsand taken other steps to keep a close eye on potential trouble.
The investors -- many of them laid-off workers or farmers-- put their savings into Shenyang's Yilishen Group for ascheme in which they bred ants to provide ingredients for ahealth tonic promising an aphrodisiac boost.
For every 10,000 yuan (654 pounds) they paid the company as"deposit", investors were promised a dividend of 3,250 yuan.
But since October, the group twice delayed payment of thedividend, fuelling investor fears that it was on the brink ofbankruptcy or that the government might have frozen its funds.
A third delay on Tuesday stoked anger among investors, theofficial, Zhang, said.
He said the government would "urge the Yilishen Group andthe breeders to reasonably settle their dispute", but Yilishenwas a private company that had "full responsibility for its ownprofits and losses".
Phone calls to Yilishen went unanswered, and the companyhas made no public statement.
Chinese media have said the scheme collected more than 10billion yuan from hundreds of thousands of Liaoning residents.Some reports said the ants were a useless ruse for an illegalfund-raising scam.
While authorities have so far taken relatively mild stepsagainst the protests, they are also wary of another flare-up.
One disgruntled investor surnamed Cong told Reuters thatbreeders heading to Shenyang had been stopped. In the cityitself neighbourhood officials were checking on breeders.
In the small city of Jinzhou, anti-riot police wereguarding against protests, said a resident there.
(Reporting by Beijing newsroom, editing by Nick Macfie andRoger Crabb)