Wang Jin felt sure that he could invest in Sichuan Trust, an institution that was part of one of what he describes as the “four pillars” of China’s financial system: banks, securities, insurance and trusts. Promised a return on his investment of 8.3%, he handed over 1.6m yuan (£178,000) in 2019. “The trust had a state licence, so we believed in its integrity,” Wang (not his real name) recalls.
Unluckily for him, in May 2020, the company said that it would be unable to repay 20bn yuan of investments. Protests ensued, with hundreds of middle-aged investors gathering outside the headquarters in Chengdu to demand their money back. By the end of the year, the local government had taken over the firm, which was reported to have a shortfall of more than 30bn yuan on its books, although the company said the sum was closer to 25bn.
Now, Wang is one of more than 8,000 investors who have been given until 5 March to accept a sliding scale repayment plan that would return 80% of capital to the smallest investors, while those who had invested more than 10m yuan would get back 40%. Investors are furious. The offer is “legalised robbery”, one of them says, in chat messages seen by the Observer.
...
