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Chinese police investigate affairs of female tycoon

Chinese police are investigating accusations of illegal money raising against a 26-year-old businesswoman who built a paper fortune in businesses, including coffee shops and construction materials, news reports and the local government said yesterday.

The probe into Wu Ying (吳英) and her assortment of shops and companies underscores a drive against corrupt tycoons and their government helpers that last year brought down the top official in nearby Shanghai, together with a number of businessmen.

The daughter of poor farmers, Wu attracted creditors by offering high returns on investments in her businesses, the Southern Metropolitan Daily newspaper said.

Wu started out in 1998 running a chain of beauty parlors, and last year invested 300 million yuan (US$38.5 million) in 15 companies ranging from a hotel to auto repair shops in her hometown of Dongyang in eastern China.

A notice issued on Saturday by the Dongyang police department said Wu was under investigation for suspected illegal money raising and the companies in her Bense Holding Group were being audited and their debts registered.

Creditors were asked to register with authorities in hopes of recovering some of their money. Spokesmen for the Dongyang police and local government said they had no additional information.

China's Communist rulers are increasingly encouraging entrepreneurs, while trying to curb corruption and white-collar crime, especially pyramid schemes, in which those who invest earliest can enjoy massive profits while the businesses themselves generate little or no income.

Such scams have frequently led to street protests and violent attacks by investors who have little faith in China's weak and overworked legal system.

In an apparent attempt to head off any such actions, the Dongyang police notice said that members of the public had an obligation to cooperate with the investigation and "maintain public order and guarantee social stability."
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