Investigation On Cashing Risk Of Private Placement Platform Under Wuhan "Contemporary Department": Investment Of 10 Million Net Worth Returns To Zero

An investor disclosed to the 21st century economic report that the Ruijin No.1 private placement product of Wuhan Ruitong Zhihe Investment Management Co., Ltd. (hereinafter referred to as Ruitong Zhihe) purchased in December 2015 had expired in December 2020. However, at the interim investor meeting held in March, relevant people of Tianfeng securities reported that their investment amount had disappeared.

According to the public information, Ruitong Zhihe was established in March 2015 with a registered capital of 10 million yuan and the legal representative is Feng Xiaoming.

Ruitong Zhihe, formerly known as Tianfeng Ruitong (Wuhan) Investment Management Co., Ltd. (hereinafter referred to as Tianfeng Ruitong), was established with 65% shares held by Tianfeng Tianrui Investment Co., Ltd., a subsidiary of Tianfeng securities private investment fund, and 35% held by Feng Xiaoming.

In February 2018, Tianfeng Tianrui withdrew and transferred its equity to Wuhan Shidai Ruitong investment management company, which is under the actual control of contemporary "leader" Ai Luming. Tianfeng Ruitong also changed its name to Ruitong Zhihe.

"It is stated in the contract that the fund will be used to subscribe for shares of Wuhan Tianfeng Zhixin Investment Center (limited partnership) (hereinafter referred to as" Tianfeng Zhixin ") Investor Mr. Wang told reporters, "the underlying assets are two projects, both of which are assets of Tieniu group, of which 985 million yuan was invested in Zhuo Chengzhao industry project, and 1 billion yuan was invested in Yongkang Zhongtai project."

According to the plan, Zhuo Chengzhao industry project will be loaded into Tongfeng electronics, a listed company of Tieniu, and Yongkang Zhongtai project will also be loaded into Jinma shares, a listed company under Tieniu.

The capital market is changing.

In December 2020, the civil ruling issued by Yongkang court declared the bankruptcy of Tieniu group. Tieniu group was seriously insolvent, and had no ability to continue operation, and lacked the possibility of rescue. Zhuo Chengzhao industry and Yongkang Zhongtai were also in trouble.

It is well known that private equity investors have high risk preference. However, it is puzzling why the net value returns to zero after five years of investment?

The whole story of investment

At a friend's dinner in 2015, Mr. Wang, who had been in the secondary market for many years and made good profits, first heard about the product. Later, through the introduction of friends from Tieniu group, he bought Ruitong Zhihe's private equity fund named Ruijin No.1, and subscribed for 14 million yuan.

According to the fund contract, Ruijin No.1 fund is managed by Tianfeng Ruitong (renamed Ruitong Zhihe after 2018), the fund trustee is Wuhan Branch of China Merchants Bank, the duration of the fund is 5 years from the date of establishment of the Fund (including 3-year investment period and 2-year management exit period), and the investment managers are Feng Xiaoming and Chen Lei.

According to the information disclosed by CFA, Feng Xiaoming entered the financial industry after graduation and successively worked in new era securities, Guodu securities, Guokai securities and other securities companies. From August 2011 to March 2013, he worked in Tianfeng securities as the deputy general manager of M & A financing department. From April 2013 to December 2017, he worked in Tianfeng Tianrui Investment Co., Ltd. as the investment director. From March 2015 to November 2018, he served as the general manager of ruitongzhihe, and is now the legal representative, general manager and executive director of ruitongzhihe.

At present, Ruitong Zhihe manages 8 products with a management scale between 2 billion yuan and 5 billion yuan. The actual controller of the company is AI Luming, the founder and chairman of the contemporary group.

Ruijin No.1 private equity fund was established on December 24, 2015 and filed on January 6, 2016, and it is currently in operation.

After successfully raising 490 million yuan, Ruijin No.1 private fund invested in Tianfeng Zhixin. According to qixinbao information, Tianfeng Zhixin was established in December 2015.

In March 2016, Tianfeng Zhixin changed its registered capital to RMB 2 billion, of which, the fund manager Ruijin Zhonghe (Wuhan) equity investment center contributed 10 million yuan, accounting for 0.5% of the total investment; Tianfeng Ruitong (i.e., Ruitong Zhihe) contributed 490 million yuan, accounting for 24.5%; Hubei Zhongjing small and Medium Enterprise Investment Co., Ltd. contributed 1.5 billion yuan, accounting for 75% of the total investment.

In November 2018, Hubei Zhongjing small and medium sized Enterprise Investment Co., Ltd. withdrew from Tianfeng Zhixin, and Jiutai Lanshan (Suzhou) Investment Management Co., Ltd. (hereinafter referred to as "Jiutai Lanshan") acquired 75% equity of Tianfeng Zhixin with RMB 1.5 billion.

Underlying assets step on thunder

According to a statement on investment of Tianfeng Zhixin project, Tianfeng Zhixin has raised 2 billion yuan, with a total investment of 1.985 billion yuan.

The funds have been invested in two projects, one is the real estate project, Zhuo Chengzhao industry project is 985 million yuan, and the other is the automobile project. The total amount of foreign investment is 1.985 billion yuan in Yongkang Zhongtai project.

Zhuo Chengzhao industry project is Zhejiang Zhuo Chengzhao industry investment and Development Co., Ltd. in January 2016, Tianfeng Zhixin transferred 21.74% equity of Zhuo Chengzhao industry by Tieniu group with consideration of 985 million yuan.

On January 13, 2016, Tongfeng electronics, a listed company of Tieniu group, announced that Tongfeng electronic intends to issue shares to Tieniu group, Hangzhou Jinfeng, Hangzhou Jinkui, Hangzhou hongxutai, Tianfeng Zhixin and Jiaxing Xifeng, to purchase 100% equity of Zhuo chengzhaoye and raise matching funds.

At the same time, Tongfeng electronic hired Southwest Securities as the independent financial consultant of this major asset restructuring.

According to the announcement, the price of the shares issued by the listed company to the trading partner is 5.20 yuan / share. After the transaction is completed, Zhuo Chengzhao industry will be listed on the back door, and Tianfeng Zhixin will also hold nearly 200 million shares of the listed company's shares. When the lock-in period expires, it can exit through the secondary market.

However, as Southwest Securities received the notice of filing and investigation from China Securities Regulatory Commission on June 23, 2016, during the filing and investigation period, the CSRC temporarily did not accept the documents issued by Southwest Securities as an independent financial consultant.

Therefore, all parties decided to terminate the transaction by consensus.

On July 5, 2016, Tongfeng electronic issued the announcement on termination of major asset restructuring.

Subsequently, China Securities Regulatory Commission (CSRC) issued the administrative measures for major asset restructuring of listed companies. The new policy plan supports listed companies to improve asset quality through healthy M & A, and pure speculative arbitrage will be rejected.

Up to now, Tianfeng Zhixin still holds 21.74% equity of Zhuo Chengzhao industry.

However, Zhuo chengzhaoye is unable to pay off its debts and needs debt restructuring. On July 20, 2020, the people's Court of Yongkang City started the judicial pre reorganization procedure for Zhuo Chengzhao industry, with Zhejiang Jingheng law firm as its manager.

As for another project, Yongkang Zhongtai, Tianfeng Zhixin also increased the capital of Zhongtai automobile with 1 billion yuan. After the capital increase, it held 9.09% equity of Zhongtai automobile.

In October 2016, Jinma shares, another listed company of Tieniu group, announced that it planned to purchase 100% equity of Zhongtai automobile held by 22 counterparties including Tieniu group, Great Wall Changfu and Tianfeng Zhixin by issuing shares.

The listed company will pay all the transaction consideration by issuing shares, and the issue price is 8.91 yuan / share. After the completion of the transaction, Tianfeng Zhixin will hold more than 100 million shares of listed companies, and withdraw through the secondary market after the lock-in period expires.

In March 2017, Jinma shares issued shares to purchase assets and raise matching funds and related party transactions were approved by the CSRC conditionally. Subsequently, Jinma shares changed its name to Zhongtai automobile.

As of September 30, 2020, Tianfeng Zhixin held 118 million shares of * ST Zhongtai, accounting for 5.84% of the total equity.

In June 2020, due to the loss of more than 10 billion yuan in the previous year, Zhongtai automobile was subject to delisting risk warning treatment, and the stock abbreviation was changed from Zhongtai automobile to * ST Zhongtai.

The blue mountain of Jiutai

In fact, Jinma shares changed its name to Zhongtai automobile, and its share price went up for a time. However, after the sales restriction expired, Tianfeng Zhixin did not withdraw.

According to Mr. Wang, Tianfeng Zhixin's operation is related to Jiutai blue mountain.

In March 2016, Jiutai Lanshan and Hubei Zhongjing SME Investment Co., Ltd. signed an agreement. In November 2018, Tianfeng Zhixin completed the equity change, and the 75% equity of Jiutai Lanshan became the major shareholder of Tianfeng Zhixin.

According to the information disclosed by CFA, Jiutai Lanshan was established in June 2015 with a registered capital of 10 million yuan. The company's legal representative is Xue Yu. At present, it manages six products with a management scale of between 2 billion yuan and 5 billion yuan.

Xue Yu worked in PetroChina, Beijing Wanda Cultural Industry Group Co., Ltd., Guangzhou Fuli real estate and other companies. From June 2018 to December 2018, Xue Yu served as the chief financial officer of Jiutai Lanshan. At present, he is the legal representative, executive director and general manager of Jiutai Lanshan.

At the same time, Xue Yu is also the shareholder of Ruijin Zhonghe, Tianfeng Zhixin fund manager, holding 20% of the shares; Feng Xiaoming holds 60% of the shares of Ruijin Zhonghe.

On July 19, 2017, Zhongtai automobile announced that Tianfeng Zhixin provided pledge guarantee for Zhongcheng Trust Co., Ltd. to issue 389 million trust loans to Jiutai Lanshan by holding 106.52 million shares of Zhongtai automobile (accounting for 5.82% of the total share capital of the company).

Because the pledge of equity stock affects the liquidity of the stock and cannot be sold when the stock price is good, Mr. Wang said angrily: "our cost price is 8.91 yuan / share, and the stock price is about 10 yuan / share after the expiration of the sales restriction. However, the investment has not withdrawn. So far, the stock price of * ST Zhongtai is only 3.63 yuan / share, and the company is still facing the risk of delisting."

Moreover, in the Tianfeng Zhixin partnership agreement, it is clearly agreed that no external guarantee is allowed.

Invalid fund contract

The bigger risks lie ahead.

After communicating with Ruitong for many times, Mr. Wang learned that the fund he invested in belonged to inferior grade.

This means that, in the face of huge losses, they have invested in the fund has a net worth of zero.

Priority and inferior level is a kind of financial structured product. Specifically, priority enjoys protection. If there is a loss, the inferior one will be the first. Because the risk is also lower than the inferior one, the return of priority is lower than that of inferior one.

Gong Fangfang, a lawyer of Jingyuan law firm, believes that generally speaking, there are two situations in which private fund managers issue structured products. The first is that fund managers have less capital strength and popularity, and their ability to raise funds is also weak. In this case, when the first private placement product is issued, the structured product is often selected. In this way, the fund manager does not need to raise all the funds of the whole product, but only needs to invest a small part of the product scale as the inferior level, and then connect the priority fund from the bank or trust fund pool to establish the product.

The second is that mature fund managers actively choose to issue structured products in order to pursue higher returns. They pursue high returns and bear higher risks by leveraging structured products.

Shenzhen private equity industry insiders said that as a platform for direct investment of Tianfeng securities, Tianfeng Tianrui's equity stake in ruitongzhihe should be the second one, which pursues high returns by leveraging structured products.

However, the investors said frankly that when buying the products, no one agreed on the priority and inferior capital attributes. Moreover, in the past five years of purchasing the fund, Ruitong Zhihe has never provided investors with the net fund value regularly according to the requirements of the fund contract.

It is also clearly stated in the fund contract that there is no hierarchical arrangement for the fund, and each fund has the same income right. The principal and investment income recovered from project investment exit shall be distributed to each fund holder according to the proportion of fund unit held by fund share holders.

Some lawyers said that investors have the right to resort to law for Ruitong's behavior of violating the fund contract.

It is reported that the communication between investors and Ruitong Zhihe is still continuing.

The major shareholder of Ruitong Zhihe is Wuhan Shidai Ruitong Investment Management Co., Ltd. after penetrating through the equity relationship, it shows that the actual controller is AI Luming. Wuhan contemporary science and Technology Industry Group Co., Ltd., which is the leader of Ruitong Zhihe, is a large private industrial group, which was established in July 1988 with a registered capital of 5.5 billion yuan. It mainly distributes four industrial clusters of medicine, consumption, culture and collaboration Group, participate in holding Renfu pharmaceutical, Sante ropeway, contemporary sports and Tianfeng securities and other listed companies. As of September 30, 2020, the total assets of contemporary group exceeded 100 billion yuan.