The quiet before the storm is the most dark and depressing.
Since the first half of June, the directional financing plan financial products (hereinafter referred to as "fixed financing products") offered by China Plant Enterprises Group Co. The situation has not improved significantly so far. Historically, in June and July each year is the most tight liquidity of the group, the past part of the fixed-financing products have been postponed for more than 10 working days to pay, but the amount involved and the length of time can not be compared with the same day.
Over a month's time, four wealth management companies under the CPSC Group's sales staff in the circle of friends frantically forwarded to support the development of the private economy of the policy documents, the CPSC Group is busy releasing various types of disposal of assets, to appease the people's announcement. With reference to the experience of wealth management companies that have exploded in the past few years as a result of broken capital chains, a crisis process has been unfolding; usually, the process starts with sales teams struggling to raise funds to fill liquidity gaps, and ends with investors reporting to the police en masse.
Zhongzhi Group, which claims to have "nearly one trillion yuan in assets under management" and "more than 10,000 employees," has stakes in more than a dozen listed companies, as well as in Zhongrong International Trust Co. ("Zhongrong International Trust"), Everest Property and Casualty Insurance Company Limited ("Everest Property and Casualty Insurance"), Hengqin Life Insurance Company Limited and Zhongrong Fund Management Company Limited.
The financiers of the fixed-financing products are all members of Zhongzhi Group, and the counterparties involved are all related parties. Despite holding shares in Zhongrong Trust and Zhongrong Fund, the fixed-financing products are not sold through these two licensed institutions, but are instead handed over to Hangtian Wealth Investment Management Co. "("XHF"), Datang Wealth Investment Management Co., Ltd ("Datang Wealth") and Gao Sheng Wealth Holding Group Co.
Because of the huge volume and practitioners, these four companies are often referred to as the "big four" in the field of wealth management.
The industry is generally pessimistic about the future of CPSG. But for the independent operation of the settlement, stay out of the fixed-financing products outside of the Zhongrong Trust, the industry is relatively optimistic; a practitioner said, Zhongrong Trust and Zhongzhi Group "cut more thoroughly", and "liquidity problems in the product has long been transferred to the four big", so "Zhongrong should not be able to do anything. So "Zhongrong should not be affected".
Core assets all pledged
A former industry insider working for the Big Four said to not ware financial, the predecessor of the fixed-financing products can be traced back to 2013 before the beginning of the use of the channel is a limited partnership in the form of private equity funds, and later diverted to the contractual private equity funds, the "new rules on capital management" promulgated by the Fund Industry Association prohibit contractual private equity funds to do Association prohibited contractual private equity funds to do fixed income products, through the local JSE issued fixed income products with the abuse.
And there is a conscious cut between Zhongrong Trust and Zhongzhi Group. Before that, the Big Four underwrote most of Zhongrong Trust's pooled trust plan products. Zhongrong Trust began to set up its own sales team, Zhongrong Wealth; and after that, it handed over products such as political trust and real estate to Zhongrong Wealth for sales; but some of the pooled trust products were still underwritten by the Big Four, and the Big Four is still selling Zhongrong Trust's pooled trust products.
The New Regulation on Capital Management issued in 2018 became a watershed in the relationship between the two. Starting that year, salespeople at the Big Four were banned from printing the words "Zhongrong Trust" on their business cards, and they could not call themselves Zhongrong Trust employees during the sales process.
In March 2018, the first largest shareholder of Zhongrong Trust, Jingwei Spinning Machinery (000666, sz), issued the "Suspension Announcement of Major Asset Reorganization", in which it planned to acquire 32, 9864% of the equity of Zhongrong Trust held by Zhongzhi Group; if the transaction was completed, Jingwei Spinning Machinery would hold 70, 4562% of the equity of Zhongrong Trust, realizing absolute control, while Zhongzhi Group would withdraw from Zhongrong Trust's Shareholder directory. However, with the warp and woof spinning machine major shareholder Hengtian Group Chairman Zhang Jie fall, since then this acquisition again no one mentioned.
In addition to standardizing the sale and transferring the stake, Zhongrong Trust has also made efforts to reduce the occurrence of contact with Zhongzhi Group in public information. According to the information disclosed by the National Enterprise Credit Information Public Disclosure System, the number of businesses in which Zhongzhi Group and its member companies pledge equity (a business usually related to financing loans or guarantees and assurances) to Zhongrong Trust ranges from one to three each year.
However, the trend was fundamentally reversed when the actual controller of Zhongzhi Group, Xie Zhi Kun, died suddenly.
Central plant group members have pledged 11 equity stakes to Zhongrong Trust, which are:
1. Huzhou Zhongzhi Rongyun Investment Co. pledged 94.97 million shares of Guangdong Wancheng Wanchong Electric Vehicle Operation Co.
2, Zhonghai Shengtai (Beijing) Capital Management Co., Ltd. pledged 147,000,000 shares of Zhongzhi New Energy Automobile Co.
3, Huzhou Mingdao Asset Management Co., Ltd. pledged 596 million shares of eight horse new energy technology Co.
4, CPSC Group pledged 346.2 million shares of Everbond Property and Casualty Insurance Co.
5, Jiangyin Fengming Jiutian Investment Center (limited partnership) pledged 22.22 million shares of Beijing Jingpeng Investment Management Co.
6, Rock Energy Capital Management Co. pledged 10,000,000 shares of Beijing Jingpeng Investment Management Co.
7, Huzhou Mingdao Deli Asset Management Partnership (Limited Partnership) pledged 78.4 million shares of Anhui Jingzhong Environmental Technology Service Co.
8, Shanghai Kexin Investment Co., Ltd. pledged 70,000,000 shares of Ningbo Meishan Free Trade Port District Chuangjie Asset Management Partnership (Limited Partnership).
9, Chongqing Beijiang Huaan Investment Center (limited partnership) pledged 17,000,000 shares of Guizhou Zhongyao Mining Co.
10, Qingdao Xinhuihe Investment Management Co., Ltd. pledged 379.83 million shares of Qingdao Zhongzhi Hengchuang Investment Co.
11, Zhuhai Hongxin Dingtong Enterprise Management Co. pledged 253.22 million shares of Qingdao Zhongzhi Hengchuang Investment Co.
Six of these 11 equity pledges took place in just five days, showing that Zhongzhi Group still maintains strong control over Zhongrong Trust after Xie Zhijun's departure.
At the same time, it is worth noting that all of these enterprises pledged are the highest quality core assets of Zhongzhi Group in recent years. Among them, Ningbo Meishan Free Trade Port Area Chuangjie Asset Management Partnership (limited partnership) is the main body of Zhongzhi Group's participation in XCMG Machinery's mixed ownership reform.
Zhongzhi New Energy Vehicle Co., Ltd, Anhui Jingzhong Environmental Technology Service Co., Ltd, Bapima New Energy Technology Co., Ltd, Guangdong Wancheng Wanchong Electric Vehicle Operation Co. At the same time, they also have a **** the same identity, Zhongzhi Group and its affiliates issued by the financing or counterparty of the financing products.
In addition, the equity pledge ratio of the above business is close to 100%. Except for Huzhou Mingdao Deli Asset Management Partnership (Limited Partnership), all the other pledgers pledged all the equity of the subject assets held to Zhongrong Trust. Pledging so many core assets in a very short period of time.
The strange coincidence
Trust is a financial sector with more internal differences than inter-industry ones. Flexible institutional arrangements allow different trust companies to specialize and focus on different business models even more than the differences between the trust industry and the banking and insurance industries. The uniqueness of Zhongrong Trust, among 68 companies in the whole industry, is reflected in the large number and impressive volume of pooled trust plan products without specific fund investment.
Taking "Zhongrong Yuanrong No. 1 Pooled Fund Trust Plan" as an example, the investment scope includes "bank deposits, money market funds, bond funds, bonds on the exchange and inter-bank market as well as fixed-income products (including those with maturities of less than one year)", "bond reverse repo", "bond repurchase", "bond repurchase", and "bond repurchase". The investment scope includes "bank deposits, money market funds, bond funds, exchange-traded and inter-bank market bonds and fixed income products (including maturities of less than one year)," bond reverse repurchase, trust plans or trust beneficiary rights.
Additional repurchase of bonds or rights to the proceeds of claims and other fixed-income products recognized by the principal)" of the pooled trust plan with a term of up to 10 years, and at the point of time of September 30, 2020, the size of its stock is as high as 16.5, 17 billion yuan.
16.5 billion yuan scale is what concept?
According to the 2020 Annual Report released by Zhongrong Trust, at the end of that year, the net assets of Zhongrong Trust's headquarter amounted to 19,0,610 million yuan, and the net capital was 16,252 million yuan. Without taking into account the premium for the trust license, if the "round" series of defaults can not be paid, the Zhongrong Trust sold will just be able to pay the principal of the pooled trust plan.
However, the "Round Rong" series is only one of the many pool products issued by Zhongrong Trust. In addition to the "Yuanrong" series, the larger and more well-known ones include the "Tang Sheng" series, the "Hongdian" series, the "Hongrong" series, the "Hongrong" series, the "Tang Sheng" series and the "Hongrong" series. series, "Long Sheng" series, "Bao Sheng" series, "Xin Rui" series, "Ze Xin" series, etc. "series and so on.
Some of these products do not have any description or agreement on the investment of funds, such as "Zexin 1".
Some give a general description of the industry in which the funds are invested. For example, the investment direction of "Hongdian 1" is mainly to "directly or indirectly invest in high-quality enterprises in new infrastructure, new energy, e-sports game development, high-tech, biomedical and other industries";
"Xinrui 1" is to "directly or indirectly invest in high-quality enterprises in new infrastructure, new energy, e-sports game development, high-tech, biomedical and other industries. The funds of "Xinrui No. 1" are invested in "high-quality enterprises and projects in high-quality industries such as livelihood projects, energy and cultural industries";
Tang Sheng No. 1" invests in "industries with unique competitive advantages and are the best in the industry. The funds of "Tang Rise 1" are invested in "enterprises with unique competitive advantages and leading brands in the industry ------ enterprises engaged in strategic emerging industries, such as energy conservation and environmental protection, new generation of information technology, biology, high-end equipment manufacturing industry, new energy, new materials and other pillar of the national economy, leading industries; enterprises engaged in the consumer industry, such as automotive, trade and retail, catering and tourism, home appliances, textiles and garments, pharmaceuticals, food and beverage, agriculture, forestry and animal husbandry industries". fishing and animal husbandry and other industries."
Consolidating the above description of these trust plans for the use of funds to invest in the following industries: new energy (automotive), biomedicine, energy and minerals, energy saving and environmental protection, cultural industries (including gaming), people's livelihood projects, the new infrastructure (a new generation of information technology), consumerism, high-end manufacturing industries, and so on.
And coincidentally, these industries mentioned above are also the key areas that CIIC is optimistic about and has invested a lot of resources to develop. Ltd., one of the most important investment and fund-raising platforms under the Zhongzhi Group, has made a detailed description of the proportion of the industries it invests in a fixed-financing product in its promotional materials, according to the proportion of the following industries: health industry, consumer industry, high-end manufacturing industry, information technology industry, pan-cultural industry, environmental protection industry, education industry and others.
(Zhonghai Shengrong (Beijing) Capital Management Group Co., Ltd. describes the industries it invests in in one of its fixed-financing products)
If Zhongrong Trust is really operating completely independently of Zhongzhi Group, why is there such a high degree of overlap in the industries the two are involved in?
If Zhongrong Trust has access to so many high-quality projects on the asset side, why can't it set up a trust plan in a way that the funds raised correspond to the projects invested in one by one, as we have seen in the real estate or political trust projects set up by Zhongrong Trust, and issue so many trust plans in which the use of the funds has not been specifically agreed upon?
After the fixed-financing products failed to be paid on maturity, some peers began to scrutinize Zhongzhi Group's investments and questioned the "asset relevance" of them.
He said: "a claimed trillion group, there is the strongest wealth end of the fund-raising, the bottom do a throw real estate, do a throw mining, do a throw new energy vehicles, do a throw dental, do a throw early education, do a throw semiconductor chips, do a throw waste recycling, do a throw charging piles, to take a bunch of losses and borrowing money to become a major shareholder of a small listed company, this extremely unrelated diversification, the majority of the company's shareholders, the majority of the company's shareholders. This kind of extremely unrelated diversification, if the quality of the assets is good, it is even greater than Musk".
"Extremely unrelated diversification" is the general impression of the outside world for the projects invested in by CIG; however, few people will follow this path to continue to think: there are thousands of lucrative trades, why did CIG choose these areas?
The answer is because Zhongrong Trust has chosen these fields.
The above mentioned, has been pledged equity in Guizhou Zhongyao Mining Co. The company has a coal mine in Panzhou Zimuga, and on August 6, 2018, an accident at the mine killed 13 people and injured seven. According to the Accident Investigation Report released by the Guizhou Provincial Emergency Department after the incident, the coal mine was formerly owned by Panxian Pannan Coal Industry Investment Co. due to a debt dispute.
In December 2017, the Zimuga coal mine was ruled by the Yunnan Provincial Higher People's Court to be given to Zhongrong Trust to offset the debt; in May 2018, the procedures for the change of the mining right were completed; and in the same month Zhongrong Trust signed a transfer contract with Zhongyao Mining. At the time of the accident, the Zimuga coal mine was already an asset under the name of Zhongyao Mining.
Similar cases abound in which Zhongrong Trust first made a loan, the debtor was unable to repay the debt and was forced to transfer the assets, and the member companies of CPSC Group finally intervened to take over the case.
For example, between January 2014 and August 2015, Fujian Jiahe Sheng Trading Co., Ltd. pledged the equity of Yingfeng Foods Co. to Zhongrong Trust for three times, each time with 128 million shares.
In November 2015, the company was listed by the court as a defaulter executor; three months later, Zhongshi Group's Beijing Zhongtai Chuangying Enterprise Management Co. (hereinafter referred to as Zhongtai Chuangying) took over the 128 million pledged shares even though it knew that the other party had broken faith.
Then again, for example, between December 2014 and June 2015, Shenzhen Deze Shijia Science and Technology Investment Co. Ltd. pledged the equity of Landing Industry (Hubei) Co. Ltd. to Zhongrong Trust 2 times, each time 15588,000,000 shares. in January 2017, Zhongtai Chuangying took over the pledge of 15588,000,000 shares. in July 2019, the Landing Industry became the executor of the breach of trust, and it was Zhongtai Chuangying that took over the pledge. After that, it was again Zhongtai Chuangying who was in court with it.
Also, for example, in August 2015, two natural persons Jia Zhonghu and Cao Shuping pledged 58.8 million shares and 1.2 million shares of Lanzhou Zhenghe Real Estate Development Co. to Zhongrong Trust. in September 2016, the new Runtong International Finance Leasing Co. took over the two equity pledges. The shareholder of the financial leasing company is an entity registered in Hong Kong, but its executive, Lu Haitao, has experience serving in a number of Zhongzhi-series companies, including Zhongtai Chuangzhan, while its industrial and commercial contact phone numbers overlap with those of a number of Zhongzhi Group member companies.
In 2022, CPSC became one of the investors involved in the bankruptcy reorganization of Ziguang Group. That year, Zhongzhi Group utilized this event to market itself fiercely, while also issuing a large number of related fixed-financing products. And from the timeline, it was also Zhongrong Trust with which it first made business contacts in 2020.
In some asset segments that Zhongzhi Group attaches great importance to, such as new energy vehicles, film and television cultural projects and mineral projects, we can find this kind of "Zhongrong advanced, Zhongzhi take over" operation path, Zhongrong Trust and Zhongzhi Group formed a kind of "you have me, I have you", which is a kind of "you have me, I have you", which is a kind of "you have me, I have you". Zhongrong Trust and Zhongzhi Group have formed a kind of "you have me, I have you", mutual dependence, each other ****exist relationship.
Trust loan business is essentially a pawnshop business. The trust company in a certain period of time to lend money and collect interest, the borrower in accordance with the loan amount and discount rate to the trust company mortgage part of the assets as a guarantee. At the end of the period, either the borrower pays back the capital and interest, or the trust company acquires ownership of the mortgaged assets. But for the trust company, the disposal of mortgaged assets to recover funds to pay investors is not an easy and pleasant thing, so the existence of CPSG undoubtedly provides a convenient exit channel.
And for Zhongzhi Group, the collateral assets acquired by the trust company are often high-quality assets such as mining rights, prospecting rights, land-use rights, and stakes in listed companies, whose quality is much higher than that of the collateral that can be acquired by general private equity firms or three-party wealth companies.
Combined with the fact that Zhongzhi Group itself was founded on the disposal of non-performing assets, it has a passion for the industry and is not as tightly regulated as licensed institutions; therefore, under ideal circumstances, it can earn far more than the interest rate on the loan in excess of the return through the way of moving inside and outside the table and exchanging time for space. However, in the current situation, even real estate, coal mining, sand and gravel aggregates, dentistry, early childhood education and these high gross profit industry, it is difficult to resist the high interest rate of more than 10% over the years to draw.
Finally, back to Zhongrong Trust itself. On the one hand, it is difficult to exit the huge volume of real estate projects to realize, on the other hand, it is a huge pool of products to pay the pressure, how will Zhongrong Trust face this double challenge?