Authorities in the northern Chinese province of Shaanxi are probing allegations of missing funds raised by an investment scheme at a private university in the provincial capital, Xi'an, amid allegations that its management has absconded and U.S.$1.2 billion of individual investors' money has gone missing.
Some 170,000 people invested in the privately owned Xi'an United University's expansion scheme during the past 10 years, but they now say there is no sign of the university's highest-level leaders or their capital.
Thousands of disgruntled investors converged on provincial government offices on Tuesday in the hope of pressuring the government to act, investors told RFA.
"At least 10,000 people were there, and there were also army vehicles and soldiers," an investor who asked to remain anonymous told RFA on Wednesday.
"In official speak, they were maintaining social order."
Photos of the protest posted to Chinese social media sites showed a huge crowd outside the gates of the Shaanxi provincial government, holding banners which read: "Give us back our hard-earned cash," and "The government is turning a blind eye."
The boulevard outside the government was crammed full with people, while iron traffic dividers along the street had been turned over and traffic prevented from moving further up the road, the photos showed.
Some online posts said the crowd had swelled to 40-50,000 at its height on Tuesday.
An official who answered the phone at the Shaanxi provincial government offices on Tuesday declined to comment on the details of the case.
"We have accepted their complaint, and we have already set up a working group to look into this," the official said.
Repeated calls to the Xi'an United University rang unanswered during office hours on Tuesday.
The Xi'an United University was founded by former high-ranking municipal and provincial officials, who raised money from ordinary people to finance it, investors told RFA.
"They used methods that were similar to investment companies, in that they brought in elderly people by the busload to look around the university campus, wined and dined them, gave them gifts ... then got their phone numbers," the anonymous investor said.
"Then they called them up ... and told them that if they invested, it would be helpful to their [children's or grandchildren's] prospects, educational and so on," she said.
"They managed to raise 5.7 billion yuan."
After that, the college lured in further investment with advertised rates of return ranging from 10-20 percent, as well as freebies like holidays and gifts, she said.
A second investor, who gave only his surname Yang, said he was at Tuesday's protest with a group of elderly people who had lost their money in the scheme.
He said the majority had sat silently in the road in protests, though some people had been beaten in clashes with police, while an unknown number had been detained.
The university was set up in 1987 with the approval of local education authorities, its official website said.
It currently has more than 10,000 enrolled students, and is run according to "paramilitary management principles," the website said.
The United University protest comes after several thousand people gathered in Xi'an on Jan. 11 to protest losses at the hands of investment companies in the province.
Such protests highlight the financial risks of China's shadow banking system, where high yields are offered by nonlicensed investment schemes and private lending firms to attract individual investors looking for a high return on their savings.
China's shadow banking sector—which comprises licensed banks' off-book lending arms, trust companies, and other informal lenders—had an estimated 31.2 trillion yuan (U.S.$5.03 trillion) in assets outstanding at the end of 2013, consulting firm Oliver Wyman reported this month.
But a wave of recent scandals among private lending firms and investment schemes has prompted mass protests by thousands of people who have lost their savings or who say they are victims of fraud.
Many blame ineffectual government regulation or official corruption as their money disappears into overseas bank accounts, according to former investors.
Reported by Wei Ling for RFA's Cantonese Service, and by Qiao Long for the Mandarin Service. Translated and written in English by Luisetta Mudie.