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Billionairess arrested for illegal money raising

(Xinhua)
Updated: 2007-06-22 22:24

HANGZHOU - Another billionairess in east China's economically booming Zhejiang Province has been detained on charges of illegal fund raising and fraud, local police said on Friday.

Dong Lixiong, 29, a native of Hutou Township, Wucheng District, Jinhua City, allegedly collected more than 300 million yuan (37.5 million US dollars) between May 2006 and March this year by promising investors high returns, a spokesman with the Jinhua Municipal Public Security Bureau said.

Dong promised investors lucrative returns ranging from 10 to 25 percent. Investors lent money hand over fist, with sums ranging from hundreds of thousands of yuan to tens of millions of yuan, the spokesman said.

Most of the victims were Dong's relatives and friends, in addition to private business bosses, farmers, workers and civil servants, he said.

"Many of them suffered huge losses, and some even attempted to commit suicide by jumping from high-rise buildings," he said.

Dong's maternal uncle was the first victim to report her illegal activities to police on March 29. He lent 10 million yuan to his niece in November last year but one million yuan has still not been paid back, the spokesman said.

"When police arrived at Dong's residence that day, there were more than 20 people there demanding she repay debts," he said.

So far, 21 victims have informed the police about Dong's fraudulent activities, with around 53 million yuan of principal yet to be returned.

Dong is the second billionairess in Zhejiang to be detained on charges of illegal money raising.

Wu Ying, 26, head of the Bense Holding Group, allegedly also collected funds illegally by promising high returns to her creditors, Dongyang City police said in Februray.

She had promised investors lucrative returns ranging from 3 to 10 percent per month, and attracted many investors to channel funds into her company.

Wu, born to a farming family in Dongyang City in Zhejiang, started her business career in beauty parlors in 1998.

The woman made a high-profile investment of about 300 million yuan to establish 15 companies within three months from August 10 to October 12 in 2006.

Her businesses included a mall, a car service shop, building material stores, hotels and coffee shops, according to the local industrial and commercial bureau.

Local police said the amount of money she amassed was probably "formidable" but did not reveal the exact amount as the investigation is still underway, and she could face 10 years in prison if convicted.



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