The poor farmer has hardly slept for weeks, and when he does he has nightmares. The source of his anxiety? A tower of cardboard boxes in the next room. Filled with ants.
After more than four decades of backbreaking work tilling the soil, Li Fanghai, 62, and his wife had managed to save $11,000, which they invested in ant farming.
These ants were far more than uninvited picnic guests, the couple were told. When ground into a powder, they become an aphrodisiac, a kidney purifier and general cure-all, the Yilishen Tianxi Group declared. The ants would earn them a 30 per cent annual return.
In reality, critics say the ants apparently were little more than the bait for a vast pyramid scheme. Over an eight-year period, the company recruited as many as one million would-be ant farmers, collecting about $1.2 billion. In mid-December, it filed for bankruptcy.
The story of Yilishen illustrates the get-rich-now mentality in Yaozhaizi, China, the constant search for a new angle by people struggling to make a go of it with the Communist economy having all but given way to private enterprise.
Most of the victims say they invested with Yilishen because of its close ties with the government and endorsements by prominent officials.
Some analysts add that since the 1989 Tiananmen Square massacre, which put an end to political reform, an obsession with money has supplanted a sense of solidarity and idealism.
Before his fall from grace, Yilishen Chief Executive Wang Fengyou, 45, was something of a folk hero. Born poor, he sold potatoes and made bean curd to support his family before moving on to bottling, a slaughterhouse and a taxi business. He founded Yilishen in 1999 and started recruiting ant farmers two years later. In 2006 he received the government’s prestigious “model entrepreneur” award.
In return for their money, ant farmers were given the boxes, ants and a list of strict instructions: The ants need a spritz of water mixed with white sugar or honey at 9 am and 4 pm every day. They should be fed cake and egg yolks every three to five days. And they should be kept indoors. In return, the company would come and pick up dead dried ants every 74 days.
In retrospect, there were warning signs. In November 2004, when the company attempted to export its health products, the Food and Drug Administration barred them from the US, ruling that they contained prescription-strength sildenafil, the active ingredient in Viagra. This apparently killed Yilishen’s plans to list on the Hong Kong Stock Exchange.
Before Yilishen shut down, its website claimed the company had moved well beyond ants to encompass a high-tech marriage of traditional Chinese medicine and modern technology.
When it started missing payouts, Yilishen announced that new funds from investors in Kuwait would allow it to pay everyone by Nov 20, 2007. That didn’t happen, and thousands of anxious ant farmers descended on the company headquarters. Authorities claim irate investors overturned cars and blocked rail lines. But one witness said the crowd was peaceful and that the real aggressors were the hundreds of riot police officers who detained and roughed up victims.
Los Angeles Times
