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Proletariat Loses Money Investing in Ponzi Scheme Supported by Chinese Communists



(p. B1) HONG KONG -- At every turn in his improbably rapid rise, Ding Ning, 34, went to great efforts to convey the image of strong government backing for his Internet financing business.

There was his company's lavish annual meeting and banquet last year in Beijing's Great Hall of the People, where China's legislature meets and where top government leaders host official functions. Adding a splash of celebrity to the event were Zhou Tao, a nationally famous actress and host on the government's main television broadcaster, and several mid-ranking officials, bureaucrats and lawmakers.

There were the positive profiles in state-controlled media, as well as the company's advertising on official TV. There was the section of his company's website devoted to building Communist Party spirit.

But it all came crashing down in dramatic fashion for Mr. Ding this week, when the police alleged that his financing business, Ezubao, was a $7.6 billion Ponzi scheme and announced 21 arrests, including of Mr. Ding. The company was shut down.


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(p. B7) In interviews, former staff and investors described the signals of strong state support as one of the keys to Ezubao's rapid rise.

"Many people joined Ezubao because they saw the support from the government and from some government officials," said Feng Zhe, 36, a Beijing resident who worked as a salesman at the company from June of last year until December.

Mr. Feng said a number of his friends and family members invested in Ezubao's products and suffered losses. "Many people bought their products because the government has lent the company credibility," he added.



For the full story, see:

NEIL GOUGH. "Feeling Twice Victimized." The New York Times (Sat., Feb. 6, 2016): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the article has the date Feb. 5, 2016, and has the title "Ponzi Scheme in China Gained Credibility From State Media.")






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