Business / Markets

Investors lose out in gold investment

By Zhang Yu ( Updated: 2015-02-04 14:33

Company's assets frozen, its head arrested as investigation continues

Tens of thousands of private investors contacted police when an investment company in Langfang, Hebei province, failed to deliver the returns it promised through an investment in gold.

The company, Huangjinjia Investment Group, is suspected of illegally taking 5.39 billion yuan ($875 million) from 36,000 investors, according to the city's micro blog on Saturday.

Xiao Xue, the head of the company, and other major suspects have been arrested, and the matter is being investigated by procuratorial authorities.

Xiao and some of her relatives allegedly used the money to purchase real estate and luxury vehicles, according to the government's website.

The public security body in Langfang has frozen Huangjinjia's assets of 2.8 billion yuan, more than 700 kilograms of gold and silver products, 66 vehicles, 191 residential properties and 211,000 square meters of land.

According to official statements, all the property involved in the case will be returned to investors in accordance with the law.

One of the alleged victims who gave her surname as Zhang said she spent 300,000 yuan on one of the company's products that promised investors high returns, and the ability to withdraw their money whenever they wanted to.

Zhang, of Xi'an, Shaanxi province, said she searched the Internet before investing. She found that Huangjinjia was a large, licensed company approved by the government.

"How could I know such a big and legitimate company as this would have problems?" Zhang asked.

Wang Shaoguang, a lawyer from Beijing Shengyun Law Firm, said people like Zhang lack awareness on how their money is used.

"Most private investors only pay attention to how much they can earn," Wang said. "Few ask about the way their money will be used."

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