China nabs woman in suspected investment scandal

BEIJING, June 23 (Reuters) Police in eastern China have detained a young woman on suspicion of illegally raising 300 million yuan (39 million dollars) amid promises of high returns, state media said.

Dong Lixiong, 29, amassed funds from relatives and members of the public starting in May last year after pledging to deliver returns of up to 25 per cent on their investments, the official Xinhua news agency said in a report seen today.

State media have said that Dong began her investment scheme after racking up business debts of 100,000 yuan in her native Jinhua city, located in the booming coastal province of Zhejiang.

Xinhua, which described Dong as a ''billionairess'', cited a local official as saying that many investors had suffered huge financial losses and that some had even attempted to commit suicide.

Over 20 people had gone to the police to complain about Dong, who still needed to repay around 53 million yuan worth of investment outlays to investors, it said.

The case follows the detention earlier this year of Wu Ying, a billionairess nicknamed ''Wealthy Miss Dongyang'', who was suspected of illegally raising funds to create a business conglomerate spanning real estate, tourism and entertainment.

State media have said that Wu faced up to 10 years in prison, if convicted.

REUTERS GP MIR RAI1118