The promised return was too good to ignore: 13.7 per cent a year for anyone who invested in some metals that few had ever heard of.
When it proved too good to be true, angry investors tried to grab their metal from an airport warehouse in southwest China. After that failed, they nabbed the company boss instead.
As he checked out of a plush hotel in Shanghai at dawn on Saturday, Shan Jiuliang, a metal trader, found himself surrounded by dozens of protesters. Some wore T-shirts accusing Mr Shan’s Fanya Metals Exchange of fraud and “trampling on the law”.
He was the one trampled. Desperate investors, some of whom had flown in from across China to recover their stake in the £4 billion scheme, wrestled him to the ground, then forced him into a car and delivered him to a police station.
Their dramatic citizen’s arrest, captured in photos shared on Chinese social media sites, ended with Mr Shan’s release, without charge, and a mere promise from police to work with the authorities in southwest Yunnan province, where the exchange is based, to investigate why the investors’ funds had been frozen.
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The episode underscores the risks that China faces at a time of extreme volatility in the stock market and slowing economic growth. The furious reaction of Fanya’s customers reveals the public anger that Chinese authorities may have to placate in the weeks and months ahead.
For the out-of-pocket Fanya investors, the prospects look bleak. They told the Futures Daily newspaper that Fanya had “kidnapped local government” in Kunming, the Yunnan capital, where lawyers dared not represent them, and the provincial authorities and police refused to accept or register their case.
Collusion between government and business is par for the course in China. The investors have now joined the massed ranks of China’s “petitioners”, considered troublemakers by those in power, and are likely to have been condemned to a long, hopeless search for justice. Fanya has responded by accusing the protesters of illegal and violent acts, including Mr Shan’s detention inside a car for six hours.
His middle-class customers — who said they stood outside in the rain while he was dry inside — should have been enjoying the fruits of their hard work and China’s economic miracle. However, China keeps its savings deposit rate so low, and stops its citizens from investing abroad, that rising numbers of people opt for risky, new wealth management products instead of the volatile property or stock markets.
The Fanya protests are unlikely to be the last.