Sting in the tail for ant aphrodisiac scheme

Sting in the tail for ant aphrodisiac scheme
BEIJING (Reuters) - A Chinese company that raked inbillions of yuan raising ants to make an aphrodisiac tonic hasfiled for bankruptcy, an official Web site said.
Thousands of angry investors took to the streets ofShenyang, capital of Liaoning province, last month to demandhelp getting their money back from Yilishen Tianxi Group,besieging government offices and disrupting traffic.
Yilishen, which began making ant tonic in 2001, had filedfor bankruptcy and was undergoing liquidation, theEnglish-language report on www.china.org.cn said.
The ant business appears to be fraught with risk. InFebruary, a Chinese man was sentenced to death for conningpeople out of 3 billion yuan (199 million pounds) in anant-breeding scam also based in Liaoning.
The chairman of Yilishen, Wang Fengyou, has been arrestedon charges of instigating social unrest, the Web site said. Heis suspected of paying employees and company executives toorganise counter-protests outside government offices.
The investors said Wang's cosy ties with the government hadadded to the scheme's credibility. Wang was named a modelprivate entrepreneur in 2006.
The investors -- many of them laid-off workers or farmers-- put their savings into a scheme in which they bred ants toprovide ingredients for a tonic promising an aphrodisiac boost.For every 10,000 yuan investors paid Yilishen as a bond, theywere promised a dividend of 3,250 yuan.
Since October, the group twice delayed payment ofdividends, fuelling investor fears that it was on the brink ofbankruptcy or that the government might have frozen its funds.A third delay stoked anger.
"The firm stopped paying last month and the angry antfarmers feared they would lose their bonds and payments," theWeb site quoted police as saying.
Chinese media have said the scheme collected more than 10billion yuan from hundreds of thousands of Liaoning residents.Some reports dismissed the whole project as a scam.
Residents have said police had set up checkpoints and takenother steps to keep a close eye on potential trouble. Breedersheading to provincial capital Shenyang were stopped.
Underlining the sensitivity of the issue, almost all onlinediscussions about the case have been censored and the Beijingcity government has asked lawyers in the capital not torepresent any breeders to ensure "political stability",according to a notice on the Web site of the Beijing MunicipalLawyers Association (www.bmla.org.cn).
Lawyers were also advised not to accept interviews byChinese and foreign media.
Phone calls to Yilishen went unanswered and the company hasmade no public statement.
(Reporting by Benjamin Kang Lim, editing by Nick Macfie)