During the period of the Fifth Inspection Team of the Central Committee of the Chinese Communist Party(CCP) visiting Tianjin, the Ex-Chairman of the Board of “Northern Trust” Liu Huiwen killed himself on April 19th. Then on April 21st, 3,000 victims of the “Tianjin Private Fund Scam” gathered at Tianjin Municipal Bureau for Letters and Appeals, appealing against “the disaster of private fund” and have been oppressed by the police. The comments suggested that the suicide of Liu Huiwen might be related to Zhang Gaoli, the Deputy Premier of CCP’s State Council. When Zhang Gaoli took the position of the CCP Head of Tianjin City, he at once called for mainland people and even overseas investors to invest in Tianjin. At present, a lot of Private Funds were punished as illegal raising of money and sealed up. The investors cannot get back the
100 billion RMB. The victims thought, Zhang Gaoli must be fully responsible for the case.
From March 28th, the CCP’s Fifth Inspection Team started a two month’s inspection mission in Tianjin. Nearly three thousand victims across China of the “Tianjin Private Fund Scam Case” gathered at Tianjin Municipal Bureau of Letters and Appeals. The police forced them to get on a bus and some of the appealers were illegally detained.
According to the appealers, when the Inspection Team came to Tianjin, the reporting telephone could not be connected. There was no one from the Authorities to really solve the concerns of these people.
Ms Bai is a victim of the scam case and she says: “Some 3,000 victims were oppressed and beaten with injuries. Many of them were forced to get on a bus and taken away. We provided the money for the private fund, but we were framed with a crime called “illegal collecting of funds”. As a matter of fact, the government was involved in the case. We have appealed the case for five years and reported to the Tianjin Municipal Government, and we also received replies. But the problem is still not yet solved and is deferred. So now we have no doubt there must be a stronger and higher level backstage supporter behind, who might be involved and hence causes the postponing of the case.”
The current Member of the Standing Committee of the CCP Politburo, Zhang Gaoli had taken the position of the CCP Head of Tianjin City from March of 2007 to the end of 2012. During that five years, the Tianjin Government issued a series of concessional policies on finance and tax for largely promoting private funds. The officials of both Municipal and District levels actively pushed the private fund and raising money. According to the information of Tianjin Municipal Bureau of Industry and Commerce Administration, by the end of 2011, the registered private equity fund companies dramatically soared to 2396 companies with registered capital of 440.9 billion RMB.
Scam victim Ms Zhang: “Our case is connected with a District Government,…But later it is not that thing. Where is the money? This is the question. We tried to find its assets, but we were told there are no assets. Let us try to find it. We have looked for it so many years. But we were treated like a ball to be kicked from this department to another. So is there any inside blackbox manipulation?”
From the end of 2010 to the October of 2011, all levels of Tianjin Governments called for all investors to invest in Tianjin by responding to the policy “Pilot and trial raising funds and ensuring the return of the raised funds”. Guaranteed by the credit of governments, investors without hesitation gathered here for the dream of becoming rich by investing in private equity.
But when a large number of private equity funds in Tianjin were declared as “illegally raising funds” and seized, the victims across China persistently appealed to Tianjin Municipal Government and asked for answers.
Mr Wang Zhongxiang was once an independent candidate as a representative of the Tianjin People’s Congress. He says: “such an incident identified as an illegal raising of money has dissatisfied many victims. Because illegal raising of money means the investment itself is illegal, the assets are not legally protected… it was definitively promoted and pushed by the government. If the government don’t take the responsibility for a problem with such serious assets, this cannot be explained. Zhang Gaoli should assume political and legal obligations.”
Till now, around several tens of private equity companies in Tianjin have been seized and sealed up. Among them, some companies have involved tens of billion RMB or even more. The victims reached 100,000 and it is one of the largest private fund scam cases in China.
It is reported that, in order to “become a member of the Politburo Standing Committee of 19th CCP Central Committee” and produce so-called political achievements, the scandals of Tianjin private funds have been covered up and none of the official medias have spoken up on this incident. Last New Year, a large number of victims protested in front of the Municipal Government and shouted “Return my money, Zhang Gaoli”.
Another victim Ms Zeng: “the invested money was collected from relatives and friends. I invested all the money I could raise. My son was unable to get married without money. I sold a property and invested here to make more money and improve my standard of living. But once I put the money in the funds, then I had no property, was divorced, and cannot afford another property. There are even investors dying due to this scam.”
In addition, when Zhang Gaoli took power in Tianjin City, he also widely promoted property development. At the beginning of January this year, the direct debt of the Tianjin Government was 224.6 billion RMB. This is as much as 1.28 of last year’s financial revenues of 207.8 billion RMB. In the February of 2014, Wang Yang presided at a conference with all principal heads of all departments of the State Council and said the “Tianjin Government owed a debt of more than 5 trillion RMB and is actually going bankrupt. If we are going to trace the responsibility, it is too late.”