Yilishen Tianxi Group

Infobox Company
name = Yilishen Tianxi Group

type = Private
genre =
foundation = Liaoyang, Peoples' Republic of China (1999)
founder = Wang Fengyou
location_city = Liaoyang
location_country = Peoples' Republic of China
location =
locations =
area_served =
key_people =
industry = Health care, Pyramid scheme
products = Traditional Chinese medicine
services =
revenue = 15 billion yuan
operating_income =
net_income =
assets =
equity =
owner =
num_employees =
parent =
divisions =
subsid =
slogan = Developing health enterprise, offering human beings health
homepage = http://www.tianxigroup.com/
footnotes =
intl = The Yilishen Tianxi Group is a Chinese company established in 1999 which sold traditional Chinese medicine products made from ants.cite news
last = O'Neill
first = Mark
coauthors =
title = A Chinese Pyramid Scheme Built on an Anthill
work = Asia Sentinel
pages =
language = English
publisher = AsiaSentinel.com
date = 2007-12-03
url = http://www.asiasentinel.com/index.php?option=com_content&task=view&id=910&Itemid=32
accessdate = 2008-02-22 ] More than one million people invested money in the company, purchasing and raising boxes of ants with the promise that they could sell the ants back for a profit, before it was exposed as a ponzi scheme in 2007.cite news
last = Ewing
first = Kent
coauthors =
title = Ants and pyramids: China scams abound
work = Asia Times Online
pages =
language = English
publisher = Asia Times Online (Holdings), Ltd.
date = 2008-01-12
url = http://www.atimes.com/atimes/China/JA12Ad01.html
accessdate = 2008-02-22] cite news
last = Reynolds
first = Wilma
coauthors =
title = Breaking News - Ant breeders call for help in Liaoning Province as CCP experts take control over Power Ant
work = Speaking of Asia News
pages =
language = English
publisher = SOH Radio Inc.
date = 2007-12-17
url = http://sohnews.com/2007/12/17/breaking-news-ant-breeders-call-for-help-in-liaoning-province-as-ccp-experts-take-control-over-power-ant/
accessdate = 2008-02-22]

History

In 1999, Wang Fengyou, a Liaoning businessman, set up the Yilishen Tianxi Group to make health products whose main ingredients were ants, including a version of Viagra. In addition to advertising the products under the name Yilishen on television (endorsed by Bao Xishun, China's tallest man, and Zhao Benshan, China's most prominent comedian celebrity), investors were offered a significant return if they bought boxes of black mountain ants from the company and raised them to maturity.cite news
last = Hilsum
first = Lindsey
coauthors =
title = Chinese ant farmers left with crumbs
work = Channel 4 News
pages =
language = English
publisher = Channel 4
date = 2008-02-22
url = http://www.channel4.com/news/articles/world/asia_pacific/chinese+ant+farmers+left+with+crumbs/1631247
accessdate = 2008-02-22] Buyers, most of whom were unemployed factory workers or peasants, were instructed to feed the ants sugar water, egg yolk and cake, with the promise that after three months, they could sell them back to the company. Returns on investment were reported to be anywhere between 30 and 60 percent,cite news
last = Hilsum
first = Lindsey
coauthors =
title = Anger of the ant farmers
work = New Statesman
pages =
language = English
publisher = New Statesman
date = 2008-02-21
url = http://www.newstatesman.com/200802210022
accessdate = 2008-02-22] cite news
last = Xinhua
first =
coauthors =
title = Man sentenced to death for ant-breeding swindle
work = China Daily
pages =
language = English
publisher = China Daily Information Co
date = 2008-02-04
url = http://www.chinadaily.com.cn/china/2008-02/04/content_6441805.htm
accessdate = 2008-02-22] and many investors used the profits to buy more ants.cite news
last = Hilsum
first = Lindsey
coauthors =
title = The magic power of ants
work = Channel 4 News
pages =
language = English
publisher = Channel 4
date = 2008-02-22
url = http://www.channel4.com/news/articles/world/asia_pacific/the+magic+power+of+ants/1622547
accessdate = 2008-02-22] Yilishen Tianxi built a factory to produce pills and wine made from the dead ants; Yilishen products were sold in more than 50,000 Chinese pharmacies, and the company's annual revenue was 15 billion yuan.

The company was endorsed by Chinese government officials, and Wang, now the chief executive, was photographed with the former Minister of Commerce of the Peoples' Republic of China, Bo Xilai. In 2007, the company received a direct marketing license, seen by many as a government endorsement; Wang was also listed as one of "China’s Top 10 Entrepreneurial Leaders".

In May 2007, the business began to fail; sales of the health products had decreased and Yilishen Tianxi was using investors' money as income. In addition, Wang had made donations totalling $1.4 million to charity and to the 2008 Summer Olympics, to pay for infrastructure such as a subway system in Liaoyang which had boosted the company's public image. It was also alleged that the company had spent a large amount of money bribing corrupt government officials in return for favourable treatment. In November, Yilishen Tianxi was unable to pay profits to its investors, and 200,000 protesting investors were met by riot police in the provincial capital Shenyang.

On date|2007-12-07, Wang Fengyou was arrested by the public security bureau in Liaoning for disruption of public order after thousands of ant farmers staged public protests outside government buildings which it was alleged he instigated. His arrest and confession was shown on local television, and he admitted that he had been responsible for the protests. The company has since gone into liquidation.

Many of the investors have lost their family's life savings or their retirement pensions; several have committed suicide. One man set fire to himself in Tiananmen Square. Many of the ant farmers believe they are being monitored by the government, particularly after suggestions that they may disrupt the 2008 Summer Olympics in Beijing. Lindsey Hilsum, a British correspondent for Channel 4 News, reported investors were too frightened to show their faces on camera; several were briefly arrested after she interviewed them, and others had been beaten by police for protesting. Investors had been told to register with the local government, but there are reports that compensation will not be paid.

In February 2008, another man was sentenced to death in the same province of China after defrauding investors of three billion yuan (US$417 million) in a similar ant-breeding scheme.cite news
last = Staff
first =
coauthors =
title = Death penalty for ant fraudster
work = Shanghai Daily
pages =
language = English
publisher = Shanghai Daily Publishing House
date = 2008-02-05
url = http://www.shanghaidaily.com/sp/article/2008/200802/20080205/article_348026.htm
accessdate = 2008-02-22]

References

External links

* [http://www.tianxigroup.com/pc03index.html Company website] en