Authorities in the southeastern Chinese province of Fujian sent in riot police to disperse dozens of disgruntled creditors of the Lantian Department Store, which has been accused of illegal fund-raising, after they protested outside local government offices on Monday.
Around 50 petitioners gathered outside the offices of the Nanping municipal government on Monday, carrying banners which read "Congratulations on the 18th Party Congress from the wronged people," and "Huang Wenshan, give us back our blood and sweat!"
Huang was managing director of the now-bankrupt Lantian Department Store when the company reportedly raised funds illegally, but Lantian's creditors say they have never been compensated or repaid.
The protesters blocked the road outside the government buildings, bringing traffic to a standstill for nearly 20 minutes and prompting the authorities to send in riot police who beat up the assembled creditors, protesters said.
"There were about 40 or 50 of us," said petitioner Wu Linxiang, who was present at the scene for another reason. "Most of us were women, and we held up the traffic ... for about 20 minutes."
"They called out the riot police, who dragged us and pulled our arms behind our backs, as if they were restraining criminals," Wu said. "There were three or four of them dragging away each woman."
She said police also snatched away her camera after she started taking photos of the confrontation.
"I heard them saying that the Lantian department store had gone bust, and that the boss wasn't giving them their money back," Wu said. "I heard that they had taken it to court and to the complaints office, but that nothing had been done to resolve the problem."
"They say that the money was divided up among the powerful people."
Former Lantian boss Huang confirmed that his company was declared bankrupt at the end of 2011.
"The whole process has been very long-winded and troublesome, and we can understand the strong feelings of the creditors from Nanping," Huang told RFA's Cantonese service on Monday.
"We are working hard to pay back our creditors as soon as possible."
He said that a total sum of 30 million yuan (U.S.$4.7 million) was available to pay off private creditors, according to his understanding.
A court in Fujian's Yanping city, which oversees Nanping, said in a statement on a government website that it had received 40 applications from creditors of the Lantian department store in Nanping totaling more than 30 million yuan.
Meanwhile, Shanghai-based creditors of the city's Shanghai China Commercial Plaza shopping mall gathered on Monday outside the state-run municipal television station, calling on the broadcaster to cover their own story of having been similarly cheated on investments.
An employee who answered the phone at the television station said the creditors eventually left after talking with employees.
"They came to report a problem, much as media [in the West] get appeals from people," he said. "They left after we had a discussion with them."
Shanghai-based lawyer Du Yueping, who is representing some of the Nanping creditors, said the collapse of Shanghai China Commercial Plaza last year had alerted many people to the dangers of illegal fund-raising.
"I suspected them of illegal fund-raising right from the start," he said of the Shanghai China Commercial Plaza. "After that, the police got involved, which proved I was right."
China's leaders have vowed to crack down on unauthorized lending networks and on rampant real estate speculation, which has put the price of residential property out of reach for many Chinese.
Earlier this year, an appeals court in the eastern Chinese province of Zhejiang suspended a death sentence handed down to former billionaire businesswoman Wu Ying for fraud, putting the spotlight firmly on unofficial credit networks.
Wu was found guilty of raising 770 million yuan (U.S. $122 million) in funds through one of China's off-the-books, illegal lending networks and of promising her investors huge returns on their investments through the then-booming property market.
Her case has sparked widespread calls for the legalization and regulation of the shadowy private money markets, which have sprung up as a way around China's state monopoly on bank loans.
Reported by Grace Kei Lai-see for RFA's Cantonese service, and by Fang Yuan for the Mandarin service. Translated and written in English by Luisetta Mudie.