The USD 589 M fundraising scandal behind China’s straddling bus revealed

The founder of China’s once known high tech transportation solution – the straddling bus dubbed as Batie – was arrested on Sunday for illegal fundraising.

The straddling bus or the Transit Elevated Bus (TEB) was once a popular concept. Huaying Kailai, the company which invested in the bus, said that it was a significant original China invention. TIME praised it as “The 50 Best Inventions of 2010”.

Photo from Sohu.com
Photo from Sohu.com
Photo from Sohu.com
Photo from Sohu.com

The so-called revolutionary transportation invention was aimed at solving city traffic problems. In May 2010, Batie came into public view at the 13th Beijing International High Tech Expo. It claimed that each vehicle could carry 1,200 passengers to reduce 25 to 30 percent of the main road congestion. It also claimed that the time taken for construction of the bus was about one-third the period of a subway construction, and would only cost one-tenth of subway construction costs. Thereafter, it garnered the attention of several international media outlets including BBC, CNN, CNBC which reported on it. The world had seen the project as a potential solution to solve mega city traffic jams.

According to public reports, Huaying Kailai sold a series of financial products in order to raise funds for Batie. The lowest price of its financial product was sold at RMB 1 million (USD 147,267) with an annual return rate of 12 percent. Huaying Kailai raised more than RMB 4 billion in total.

Photo from Sohu.com
Photo from Sohu.com

The public raised questions of Batie being a financial fraud shortly after a quick test run in Qinhuangdao located north of Beijing last August. Soon, the bus’ fake patents were exposed. Last November, state media China Central Television (CCTV) pointed out that Huaying Kailai was suspected of illegal fundraising.

Photo from Sohu.com
Photo from Sohu.com

Bai Zhiming, known as the “father” or founder of the straddling bus, was reported to be under police investigation. According to CCTV, the fundraising fraud sucked more than USD 589 million from 40,000 individual investors.

In end June, the Qinhuangdao government requested for the removal of the straddling bus test line so that the road will return to its normal condition.

(Top photo from Sohu.com)

Good news for samaritans: Alipay insures against “old-man scam”

Jing Gao

Chinese online payment system, Alipay, has introduced a new type of insurance, claiming it can shield good Samaritans in China from scams and their legal repercussions.

Under the so-called “Senior Helpers Insurance” policy, a policyholder pays three RMB for a year’s coverage of up to RMB 20,000 in litigation costs and free legal advice. If the policyholder unwittingly helps out a senior citizen injured or incapacitated in an accident and is later wrongfully accused of having caused the accident, he is entitled to a claim.

Sinosafe Insurance currently fully provides the policy to residents in 12 Chinese provinces and municipalities. Residents in 19 other provinces can also buy the insurance, although claim support will be limited.

fulaoren2

The “Senior Helpers Insurance” policy is commonly interpreted as the insurance industry’s answer to the growing number of roadside traps that have made national headlines.

In 2013, when an elderly man in Dazhou, Sichuan province fell on the street, three schoolchildren stopped to offer assistance, only to find the man had set them up for monetary compensation by alleging they “knocked him over and caused his injury”. Subsequent police investigation cleared the children’s names.

This August, two schoolchildren in the southern city of Guangzhou were sued for damages by an old man they went out of their way to help on the street. By declaring the “accident” a sham, the court ruled in favor of the two children, who said they felt deeply saddened by what had transpired nevertheless.

While those who fake accidents in China come from all age groups and both genders, a majority of them are seniors, which can be partly explained by a lack of financial income or social security on the part of offenders. Seniors also tend to have a higher success rate in duping unsuspicious strangers and extorting compensation, thanks to their seeming guilelessness.

The prevalence of good Samaritans falling victim to planned setups in China has led to a worrisome bystander effect, where people are reluctant to intervene and would rather walk away for fear of getting into trouble and being framed. The debate about whether or not passersby should help strangers in distress has become so heated it was raised during the official civil servant exam in Henan province in 2015.

This newly invented insurance policy has prompted another round of soul-searching online. “In today’s China, you have to take out insurance before you can do any good deeds. It is beyond pathetic,” one commenter wrote on Sina Weibo, the Chinese Twitter.

fulaoren

Photos from Baidu Image