The authorities in southern China have released details of riots by people who lost money after the government banned pyramid selling schemes.

The ban was introduced last week in an attempt to prevent people being cheated by unscrupulous and often bogus companies.

Local officials in the province of Hunan said around 1,000 people, who had been working as agents for the pyramid companies, took part in violent clashes in the town of Zhangjiajie on April 24.

Beijing banned the pyramid selling schemes

Police reinforcements were called in to neighbouring Hengshan county, where several thousand people converged on the offices of a pyramid sales company, demanding repayment.

One report has spoken of at least 10 deaths in riots in two towns, though officials contacted by the BBC denied this.

The protestors are said to have bought goods from the firms in order to re-sell them with a high commission.

But when the ban on direct selling was introduced, the firms initially refused to buy back the products.

Officials say some money has now been refunded, but resentment remains among the estimated 10m agents - more than a quarter of a million of them in the city of Shanghai alone.

The BBC correspondent in Beijing says the Chinese Government has long been concerned at the inspirational nature of rallies organised in private homes and meeting places by the operators of the schemes.

There have been several cases of thousands of people being cheated of their savings by bogus companies.

But the ban has also provoked criticism from the US government, as some American companies invested significant amounts in what was, until last week, a legal trade.
 

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