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Australian brokerage worries for staff held hostage in Shanghai

An Australian brokerage said on Monday it was concerned for the safety of three of its staff at its Shanghai office who are continuing to be held hostage by irate investors who lost money on foreign exchange deals.

Union Standard Group Forex (USGFX) said it was working with Chinese authorities to resolve the situation but added local police had not yet forced an end to the impasse.

“This is a clear violation of the law with intruders holding people against their will. I would have thought that the police would intervene at this stage,” said Justin Pooni, marketing manager for USGFX. “We are continuing to work with the local authorities in an attempt to bring this situation to end.”

The FT contacted the Hunan Lu station, Xuhui bureau, which would normally handle disturbances at the iapm building in which the brokerage is based. Two officers at the station declined to comment on this matter.

A group of investors have blamed USGFX, which is based in Sydney, for losses of about $2.6m in foreign currency trades and want their money back.

USGFX said that up to 50 investors entered their offices Wednesday afternoon, initially taking 20 staff hostage.

Most staff were let go but three staff from China and Taiwan continued to be held in the offices as of Friday, according to USGFX.

Mr Pooni said the actions were disruptive to the day-to-day operations but the company’s primary concern was for the safety of its staff.

“This is a very strange situation for us. We have been in operation for 11 years and nothing like this has happened before,” he said.

An investor occupying the office, who identified himself as Yang Lei, aged 25 and unemployed, said he invested $10,000 dollars with the brokerage since May, and that his friends invested $38,000 dollars. He said they lost all their money.

“We have been here for a week, but get no result,” Mr Yang said.

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