A woman considered to be China's version of Martha Stewart has been detained for her alleged involvement in a 230-million-yuan (US$33.69 million) illegal money-raising scheme.
Xie Bing, board chairman of Sichuan Hantang Industrial Co and a member of the National People's Congress, was in custody in Dazhou City, Sichuan Province, Beijing News reported yesterday.
Dazhou police froze her company on August 25, a day after the Beijing Olympic Games closing ceremony. Xie had been an Olympic torch bearer, the report said.
Xie, a former textile worker, set up Hantang Co in 1997 as the agency of a famous sausage brand. She then entered the retail industry, opening her first supermarket on March 15, 2000. It was the first private supermarket in Dazhou.
Xie won several government awards for charity work. She also hired more than 300 laid-off workers, sponsored 10 college students and donated large amounts of money to support people in disaster-hit areas.
Xie's supermarket chain expanded to 30 outlets in Dazhou, the report said.
Xie ventured into the hotel and tourism sector in August 2004. She bought a local hotel and planned to develop 2,667 hectares of forest into a scenic site. The Dazhou government gave her exclusive rights for 70 years to the site in November 2006, the report said.
As she couldn't borrow enough money from banks to support her project, Xie began to raise money among employees, relatives and the public. She promised up to 3 percent monthly interest, the report said.
While many people joined her scheme, panic withdrawals started in September 2007 after the local government clamped down on illegal fund-raising schemes and announced that the practices were not protected by law, the report said.
The Dazhou government asked local banks to help Xie weather the crisis, the report said. She was re-elected as a delegate of National People's Congress in March.
Suppliers resumed their business with Xie, who began to provide private lenders 10 percent interest monthly.
However, Xie was not able to repay the loans or her employees, the newspaper said.
Hantang stores and distribution centers are waiting for a takeover bid to pay Xie's employees and suppliers.
(Shanghai Daily November 25, 2008)