Handan Farm Cooperative Goes Bust; 100,000 Rural Households Invested Over ￥140 million; Boss Has Fled

There will no doubt be English coverage later today or tomorrow. Here's the Google Translation of the Chinese story. Same themes popping up in this story, but mixed to create different results. For example, if you're following the trust default you know coal mines are in deep financial trouble. One of the cooperative's schemes was to haul coal from Inner Mongolia and then return with vegetables grown by Handan farmers. There also may have been a Ponzi aspect, as the cooperative was paying dividends double that of banks, and its investments failed quickly.

邯郸伟光合作社敛10万农户上亿元 突然倒闭

Handan City, Hebei Province, villagers Fengyuan Cheng Guang County held their "capital stock certificate", in black and white above the words "maturity dividend" 660 yuan, the maturity date of September 3, 2013. Until now, however, he not only did not get this interest in a deposit of 10,000 yuan before the principal had not been able to return, leaving the hands of this marked "widely County Weiguang vegetable cooperatives" Seal 'capital stock certificate ", but the above legal" high head loss "has disappeared, disappeared. In Handan City, the same holding as Fengyuan Cheng Weiguang cooperatives' capital stock certificate "few farmers, they are now faced with the same dilemma, investment funds into nowhere to repay with interest. According to the Morning News reporter Diao Cha throughout Handan City, there are nearly 10 million households joined the Weiguang cooperatives, has invested over 140 million yuan capital stock. With Weiguang boss running, how to recover the money become a problem.

Shockingly like Weiguang this farmer cooperatives in Handan has been everywhere, as many as one thousand names of tricks, but much the same way: the establishment of co-operatives to high rebates as bait, a large number of farmers to absorb funds' shares. "

Indeed Morning News reporters investigation learned that the vast majority of cooperatives are dressed in "Farmer Cooperatives" legitimate coat, and the exercise of real illegal fund-raising, the steady stream of hard-earned money to squeeze the farmers. Once empty, the farmers will lose everything.

Higher interest rates tempted farmers join a company

Speaking Weiguang, more than three years to fame in Handan City, especially in rural areas is almost known to everybody. From the end of 2010, Weiguang worked in Handan City, more than a dozen counties and the city, offering a "Weiguang vegetable cooperatives."

Weiguang issued on promotional materials, the Home was printed and the National Order of the President of the State Council, namely the "People's Republic of China Farmer Cooperatives Law" and "Farmer Cooperatives Registration Regulations." Weiguang stressed that it is based on these two regulations, registration of industrial and commercial administration departments approved the establishment.

In Weiguang outreach, the establishment of vegetable cooperatives are a perfect complement to the entire Weiguang Group's development. High Yingwei boss started to operate coal transportation, there's a fleet. "Inner Mongolia's coal sales pulled Handan, Handan then returned the vehicle pulled Inner Mongolia vegetable sales." Weiguang vegetable planting cooperatives will therefore result.

But Weiguang not join a cooperative to attract farmers relied on the blueprint, the most important is that it opened bank interest rates much higher than the so-called "bonus." Reporters got a 2011 "Weiguang cooperatives join a share cash dividend calculation table" shows that as long as farmers voluntarily join a company with funds, you can schedule dividends, capital stock cooperative financial institutions interest rates than deposit rates twice . Under such a high bonus temptation farmers have "join a company," Branch Weiguang Handan cooperatives also open up a home. According Weiguang brochure called, to 2012 just over a year's time, join a number of cooperatives Weiguang reached 80,000 people, a total of 27 branch. To 2013, join a number already exceeded 100,000.

Grassroots agents into every village

Morning News reporters Diao Chale and Jie Dao, from Weiguang headquarters to the bottom of each "join a" farmer, the middle is "Head Office - Branch - agent point" three-tier system, a level transmission, farmers' funds as they like blood from under and the convergence to Weiguang headquarters.

Weiguang headquartered in Handan City School District, the 28th Army Street revival, under which each county has in a cooperative branch, branch below the point that the agency, the agency points are distributed to every village.

In Weiguang cooperatives throughout the funding process, the most basic level, but also plays the most important role is to agency staff. Almost every village has an agency staff, who are responsible for dealing directly with farmers, farmers absorb capital shares by way of becoming members. In general, the identity of agents who are relatively specific, they either have more prestige in the village villagers either have experience in the credit union before work, more trusted by the villagers.

Weiguang method is very simple, with a high commission way to make these agency staff members for the Weiguang development. Development agency staff members available to the commission, the commission in accordance with the amount of capital stock and join a deadline to count to 10,000 yuan as the base, join a company for a period of one year, to mention became twenty ten thousandths; join a company for a period of six months, to mention become eight ten thousandths. Agency staff to absorb the various village funds to farmers branch confluence, and then handed over to the headquarters of the branch, and thus, from the most basic level of funds absorbed by the hands of farmers, three transmission, eventually converge to the hands Weiguang headquarters.

A message after the boss is gone

Started more than a year after the establishment of cooperatives, running fairly normal, "shares" of farmers basically got back in time to the "bonus" to the second half of 2013 the situation began to change. Many agency staff found Weiguang no longer be paid on time, "bonus", and then the situation is getting worse, unable to pay the money directly. In the end, the boss of high head loss are gone! "Dear agent and savers, loans I'm trying to run, will you be patient and be assured that the money down to who the money is not owed, bringing to you say sorry!" In agency staff Zhang Tai Shan's phone, keep the high head loss of such a message, the time is January 7, 2014, which is the high head loss last contact with him. Zhang Tai Shan told reporters that he was member of the Nam Theun Village agents help Weiguang join a company raised 3.8 million of funds, the money is in the village more than 100 farmers hard-earned money, but from the start of last year in July and August Weiguang default interest. He has been looking for a high head loss, but the other has not answered the phone, people do not show up, all the rumors that he had run away, and now the money did not get back to the principal and interest.

[Weiguang operational status]

Even the door seal tank have been posted

High Yingwei disappear, then how Weiguang vegetable plantations and coal field operating conditions? Morning News reporters Sui Houzou and Fang Liao Weiguang located in Guangping County of cooperatives and coal yard.

Kwong Yuen Wai Kwong Hua Yingcun County's new vegetable planting base, where three years ago had been a grand ceremony, so has changed the facade. Mr. Wang told reporters at work here, where the base 1000 acres of greenhouses have been contracted, he and another farmer in September last year, no longer belongs Weiguang. He told reporters that the market is good, the annual income per acre for growing vegetables can have the million or so, if the species is more quarters. Weiguang no longer operating mainly management too confusing, and employing poor, no professional staff planting techniques.

Guangping County Weiguang cooperatives insiders told reporters, in fact, Weiguang from land to build the greenhouses, growing vegetables really less than a year, received only a quarter of the land spend, build greenhouses and other costs more than more than 3000 yuan, basically lose everything, even the second half of last year, 800 yuan per mu of land acquisition costs are unable to pay, the government resumed planting base, subleased to other operators.

County wide flat located in Town of another solid vegetable planting base Weiguang same 1,000 acres of land, but there's no built greenhouses even finished it abandoned midway due to lack of funds. In the next base Weiguang also built a coal yard, previously parked Weiguang fleet, now deserted, leaving only a pile of coal plants. Guard told reporters that this pile of coal in the last year has been a high head loss to the bank mortgage, now the entire coal field has not a penny of the assets belonging to Weiguang, two cylinders are connected to the door of the seals affixed by the government.

Almost overnight, Weiguang professional cooperatives once popular instant Handan wither. Headquarters but not people, each county branch closed down one after another, and even some utilities have defaulted branch for several months, and only on the numbers, "Weiguang" signs also prove that it ever existed. Boss running, employees laid off, and some even more than a year did not get wages. The most direct pressure to bear, is agency staff groups. At first, they help farmers develop Weiguang "join a company", and now the farmers took the contract for the "capital stock certificate" They want to come back the principal and interest, but they have no money to repay.

According to statistics, there are nearly 10 million farmers Handan Weiguang cooperatives in the capital stock, the total amount has not been repaid to reach more than 140 million yuan. Reporters learned that the Handan City Public Security Bureau has already Weiguang incident investigation.

Morning News reporters Zai Handan and Cai Fang also found that "cooperative model" has become a common approach at the local farmers to absorb funds. In Handan, a variety of specialized cooperatives everywhere, methods are similar, both with high interest as bait to attract funds to farmers to become members. Throughout the Handan City, the number of farmer cooperatives have established many thousands. In just one county, walking down the street, can see a cooperative brand. Reporters had a street in Guangping County, saw signs seven cooperatives.