It Begins----Bilked Chinese Investors Urge Nationwide Uprising Against Ding Ning's Ponzi

By Tyler Durden at ZeroHedge

Well, don’t say we didn’t warn you.

Just yesterday, in the course of documenting the largest ponzi scheme the world has ever known (in terms of number of victims), we remarked that if China’s beleaguered masses needed yet another excuse to rise up and stage massive street protests, they got one in the form of online P2P lender Ezubao, which defrauded nearly a million people.

Ezubao’s model wasn’t exactly complicated. Investors, they said, could earn between 9% and 15% by funding a variety of projects presented on the company’s website. When the money came in, management simply absconded with it all and attempted to repay old investors with new investors’ money.

34-year-old Ding Ning - the company’s founder - had a penchant for spending investors’ hard earned money on things like CNY12 million pink diamond rings. "Among gifts that Yucheng Chairman Ding Ning gave his president, Zhang Min, were a $20 million Singapore villa, a $1.8 million pink diamond ring, luxury limousines and watches and more than $83 million in cash," Reuters recounts, before adding that "Zhang, the group president who was marketed as 'the most beautiful executive in online finance', said on state broadcaster CCTV thatDing asked her to buy up everything from every Louis Vuitton and Hermès store in China, "and go overseas to buy more if that wasn't enough."

Well, don’t say we didn’t warn you.

Just yesterday, in the course of documenting the largest ponzi scheme the world has ever known (in terms of number of victims), we remarked that if China’s beleaguered masses needed yet another excuse to rise up and stage massive street protests, they got one in the form of online P2P lender Ezubao, which defrauded nearly a million people.

Ezubao’s model wasn’t exactly complicated. Investors, they said, could earn between 9% and 15% by funding a variety of projects presented on the company’s website. When the money came in, management simply absconded with it all and attempted to repay old investors with new investors’ money.

34-year-old Ding Ning - the company’s founder - had a penchant for spending investors’ hard earned money on things like CNY12 million pink diamond rings. "Among gifts that Yucheng Chairman Ding Ning gave his president, Zhang Min, were a $20 million Singapore villa, a $1.8 million pink diamond ring, luxury limousines and watches and more than $83 million in cash," Reuters recounts, before adding that "Zhang, the group president who was marketed as 'the most beautiful executive in online finance', said on state broadcaster CCTV thatDing asked her to buy up everything from every Louis Vuitton and Hermès store in China, "and go overseas to buy more if that wasn't enough."

“Expect more protests to come,” we warned.

Well sure enough, disgruntled investors are now uniting in a nationwide “rights protection” movement. Their first order of business: to call for three days of protests.

“If we don’t protect our rights, make appeals and take other drastic action within three days, we will recover little,” said a bulletin making the rounds among Ezubao investors. “We need to rise up across the country and let the government know that the people’s bottom line is the return of their capital. If it is not returned our movement will not stop!

Many investors were lured in by the company’s flashy advertising campaigns and gimmicks. “Ezubao expanded rapidly across the country by advertising extensively on Chinese Central Television.” FT writes. “It sponsored a forum about the country’s parliament on Xinhua’s website and sponsored popular events such as the China Open tennis tournament and emblazoned high-speed rail cars with its logo.”

"When you got on the train, there was an announcement saying: "'Welcome aboard Train Ezubao'," a company employee who lost about CNY100,000 yuan in the scheme told Reuters.

Investors who put up at least CNY150,000 were given five-gram commemorative gold bars. "I feel terrible," an Ezubao investor surnamed Liu who said she lost CNY800,000 lamented. "I haven't dared tell my husband yet."

“I gave Ezubao Rmb250,000 because of their association with government activities and news outlets,” one investor told FT. “Of course we invested because of the advertising on CCTV and the high-speed trains,” another said.

“Of course” they invested. They saw an ad on a train.

This mirrors the sentiments expressed by the millions of retail investors who watched helplessly last summer as their life savings were vaporized by the harrowing decline on the SHCOMP.

It also reminds us of what happened to Fanya Metals chief Shan Jiuliang who was kidnapped by a mob of angry investors and dropped off at the police station back in August. Although Fanya was probably less of a fraud than Ezubao, the underlying story is the same: unsophisticated Chinese investors were bamboozled and once they realized they had been had, they were out for blood.

It's not likely that Ding Ning will see the light of day anytime soon, but if he were to go free, he might quickly wish he was back in prison given the fate Shan Jiuliang suffered early one morning last summer...

So stay tuned, because judging from the tone of the "rights protection movement" bulletin excerpted above, the villagers may be about to rise up in China.

Oh, and as for whether there may be other Ding Nings and Ezubaos lurking around in China just waiting to buckle under the weight of their own extraordinary ponzi-ness, consider this from Reuters:

"By November, there were over 3,600 P2P platforms as the industry raised more than 400 billion yuan, according to the China Banking Regulatory Commission (CBRC). More than 1,000 of those were problematic."

Source: "We Need To Rise Up": Bilked Chinese Investors Call For Nationwide Uprising After Massive Ponzi Uncovered - ZeroHedge

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