（中融信托关联企业图）
Produced by | Phoenix Finance and Economics
Author | Chen Wenli
Editor | Wang Tingting
Less than a month after the Evergrande’s 2 trillion yuan debt bomb exploded, another trillion-level private capital “Zhongzhi Department” crisis is imminent.
The most core financial investment platform in the “Zhongzhi Department” capital map – Zhongrong Trust has recently been exposed to multiple hard-core revelations, pointing to the company’s liquidity risk.
The revelation said that Zhongrong Trust has stopped issuing and raising funds for all products (including the fund pool), the Zhongrong Trust fund pool is empty, and all Zhongrong Trust products purchased through Zhongzhi’s four major wealth companies (Hengtian Wealth, Xinhu Wealth, Datang Wealth, and Gaosheng Wealth) have been suspended for payment.
Phoenix Finance and Economics found that in recent years, Zhongrong Trust has successively stepped on the big mines of at least 15 real estate-related companies, including Evergrande Group, Kaisa, Sunac, Sunshine City, Blu-ray Group, Taihe Group, Shimao Group, China Fortune Land Development, Helenberg, Mingmen Real Estate, East Asia Real Estate, Zhenghe Development, Peking University Resources, Qinghai Guotou, and Huangting International.
Due to Zhongrong Trust’s huge corporate association network, this payment crisis will also have a direct impact on 8 listed companies, involving more than 410 million yuan.
Among them, the principal of about 2.57 million yuan of Xianheng International (605056.SH)‘s purchase of Zhongrong-Fengying No. 176, 60 million yuan of Jinbo Shares (688598.SH)’s purchase of Longchen No. 1 and Zerui No. 1, and 30 million yuan of Nandu Property (603506.SH)’s investment in Huiju Jin No. 1 have all been overdue.
In addition, ST Minkong (000416.SZ) announced on March 28 that the accumulated investment of 100 million yuan in Huiju Jin No. 1 (one-year term), Weiguang Shares (002801.SZ) has 2 Huiju Jin No. 1 totaling 50 million yuan (due on August 20 and September 11 respectively), Shuangcheng Pharmaceutical (002693.SZ) subscribed 30 million yuan of Longsheng No. 1 (due on October 17), Anli Shares (300218.SZ) used 20 million yuan of its own funds to purchase Yuanrong No. 1 (due on December 27), and Jinfang Energy (001210.SZ) purchased multiple Zhongrong Trust products in the past year, of which 4 totaling 120 million yuan are still not due.
Not only are companies affected, according to the revelations, the suspension of payment by Zhongrong Trust this time involves 150,000 high-net-worth investors, with creditor’s rights and interests of about 230 billion yuan (another saying is 607.2 billion yuan).
With such a huge impact, it is reported that the Zhongrong Trust’s crisis has already attracted the attention of the regulatory authorities and has launched a special risk resolution team.
The Zhongrong crisis once again reveals the “Zhongzhi Department” scar, and the trillion-dollar private giant enters the “thunderstorm zone”
The predicament of Zhongrong Trust may be just the tip of the iceberg of the “Zhongzhi Department” crisis.
As a well-established capital system in China, the “Zhongzhi Department” has assets of over one trillion yuan, and is widely involved in industries such as finance, real estate, education, technology, and new energy. It currently controls or holds shares in 8 listed companies, including Yushun Electronics (002289.SZ), ST Tianshan (300313.SZ), Kain Shares (002012.SZ), Meijim (002621.SZ), Kang Sheng Shares (002418.SZ), Meiya (600107.SH), Jinhui Technology (formerly known as Zhongzhi Technology, 08295.HK), and Baode Shares (3000023.SZ).
But now, the 8 listed companies are facing the predicament of either delisting, being for sale, or incurring losses.
As one of the core assets of the Zhongzhi Department, Zhunyou Shares (002207.SZ) was officially transferred to the Xinjiang Karamay State-owned Assets Supervision and Administration Commission on August 11; the fund platform “Zhongrong Fund” was also “sold” to Guolian Securities at a high premium of about 2.949 billion yuan on February 7; in March, Yu Dong, chairman of Bona Film Group, took over the Beijing IN Sanli project, which was jointly developed by the Zhongzhi Department and Shimao Group, through his Beijing Jiesheng Shengmao Enterprise Management Consulting Co., Ltd. It is said that Yu Dong, Xu Rongmao, and Xie Zhikun had a close personal relationship, and both were members of his funeral committee.
The investigation into the financial risks of the Zhongzhi Department has never stopped.
Phoenix Finance and Economics noticed that there were previous reports that the four major wealth management platforms of the Zhongzhi Department (Hengtian Wealth, Xinhu Wealth, Datang Wealth, and Gaosheng Wealth) had a funding gap of about 400 billion yuan.
Among them, Hengtian Wealth was rumored that some senior executives were under border control, involving senior executives of the head office and regional heads.
On March 30, “Qingdao Hengtian Ruixin”, which is indirectly wholly-owned by Hengtian Wealth, was also “publicly named” by the Ji’an Municipal Financial Work Office of Jiangxi Province, saying that the Ji’an Branch of Qingdao Hengtian Ruixin Family Office Co., Ltd. had financial risks, no financial business qualifications, and the registered address was empty. Investors, if they accidentally participate in the company’s financial business, please withdraw as soon as possible.
In April this year, Zhongzhi Automobile Anhui Co., Ltd. (hereinafter referred to as “Zhongzhi Automobile Anhui”), a subsidiary of the “Zhongzhi Department”, was fined more than 48.45 million yuan by the First Inspection Bureau of the State Administration of Taxation of Liuan City for failing to withhold and pay individual income tax in accordance with regulations. This administrative penalty is also related to Hengtian Wealth.
According to the administrative penalty letter of Zhongzhi Automobile Anhui, the company raised 18.0387 billion yuan from July 2020 to March 2022. The fundraising was based on a “non-public offering of a targeted financing plan” (fixed-financing wealth management product) implemented in 2019, through registration with Guangxi Jiesuan and other agencies, and the underwriter was Hengtian Wealth.
In addition, other wealth companies of the Zhongzhi Department are also in the eye of the investigation storm. The Securities Times reported that the three wealth companies under the Zhongzhi Department (Hengtian Wealth, Xinhu Wealth, and Datang Wealth) issued pseudo-financial exchange products through Guangxi Jiesuan, with a scale of possibly tens of billions of yuan. However, Guangxi Jiesuan was questioned as a “pseudo-financial exchange”, and the whereabouts of these funds are also unknown.
The “Zhongzhi Department” was once as brilliant as a torch, but now it can be said that there are constant bad news. And all of this is less than 20 months away from the death of Xie Zhikun, the founder and former chairman of the Zhongzhi Department.
The departure of the big boss not only left a trillion-dollar “capital behemoth”, but also left a “unfinished game” of financial and real estate risks intertwined. The 9 major factions that once dominated China’s finance are now left. It is reported that the risk assessment of the Zhongzhi Department has also begun, and where will this well-established “financial behemoth” that has lost its way in capital expansion go in the future?
After stepping on the real estate mine and being trapped, Zhongrong is still acting as a “receiver”
After Xie Zhikun passed away on December 18, 2021, his nephew Liu Yang took over the “power” of the Zhongzhi Department and became the “number one figure” of the group. Liu Yang, who first controlled Zhongrong Trust, has had frequent risks in the past year.
Looking back, it will be found that one of the triggers for the crisis of Zhongrong Trust is real estate.
Phoenix Finance and Economics roughly counted that in the past two years, Zhongrong Trust has successively stepped on the mines of 15 companies, including Evergrande Group, Kaisa, Sunac, Sunshine City, Blu-ray Group, Taihe Group, Shimao Group, China Fortune Land Development, Helenberg, Mingmen Real Estate, East Asia Real Estate, Zhenghe Development, Peking University Resources, Qinghai Guotou, and Huangting International.
For example, in 2021, Zhongrong Trust successively exploded four collective trust plans related to China Fortune Land Development, “Rongyu No. 100”, “Jida No. 11”, “Xiangrong No. 223” and “Xiangrong No. 287”. At that time, Zhongrong Trust revealed that the principal of the debt totaled 5.984 billion yuan.
In 2022, the Heilongjiang Banking and Insurance Regulatory Bureau publicly announced administrative penalty information, and Zhongrong Trust was fined 200,000 yuan for raising funds for collective fund trust plans and investing them in “four-certificate incomplete” real estate projects.
After that, Zhongrong Trust was successively exposed to extend the period of Rongpei No. 231 and Rongzhu No. 421, which are related to Shimao Group, with a total scale of nearly 2.9 billion yuan; and extend the period of Rongpei No. 275, which is related to Helenberg, with a scale of 1.2 billion yuan… In 2022 alone, about 10 or more real estate-related products under Zhongrong Trust either defaulted or extended their period.
Zhongrong Trust loves real estate investment, and its real estate scale once soared to 129.15 billion yuan in 2020. Although the real estate scale has decreased since then, as of the end of June 2022, the outstanding real estate business scale of Zhongrong Trust was still 79.3 billion yuan, and most of the real estate projects involved have been delayed.
A large number of real estate investments have caused Zhongrong Trust to suffer from the real estate explosion in the past two years, so that the Zhongzhi Department, in addition to financial investment, began to “gradually shift its development focus to industries such as semiconductors and new energy.” However, Phoenix Finance and Economics noticed that the real estate map of Zhongrong Trust does not seem to have been significantly reduced.
Even on March 17, Zhongrong Trust successively took over 100% of the equity of Changsha Xiandao Zhendi Real Estate Development Co., Ltd. and Sanya Guomei Travel Co., Ltd. from Huang Guangyu; took over 100% of the shares of Tianshui Guangheng Real Estate from Sunshine City and other real estate companies; and took over Lanyu Yishan Real Estate from Zhenshui Ecology… The actions of taking over real estate are continuous.
However, at the moment when Zhongrong Trust’s products have completely stopped paying, the future of these real estate companies and related buildings that it has taken over may become uncertain again.
The emerging industries that the Zhongzhi Department has high hopes for still need to be tested by the market, so when can it jump out of the financial storm and real estate maze, it can only wait for time to give the answer.
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