[Exclusive] Xuchang Rural Commercial Bank and its mysterious shareholders

(Yicai Global) June 21 — After Xuchang Investment Group said it had no real control over rural lenders involved in a recent banking scandal, Yicai Global discovered that Xuchang Rural Commercial Bank, controlled by Xuchang Investment, had many invisible shareholders.

Three rural banks in Henan Province, Yuzhou Xin Minsheng Village Bank, Zhecheng Huanghuai Community Bank and Shangcai Huimin County Bank, and two rural banks in Anhui Province, Guzhen New River Huai Village and Township Bank and Yixian New River Huai Village and Township Bank, are independent and independently managed legal entities, Xuchang Investment said in a filing to China Central Depository & Clearing on May 25. Xuchang Rural Commercial Bank had virtually no control over the operation and management of the five banks, he added.

Since April, depositors have been unable to withdraw their money from the five banks, where they expected to receive an annual return of up to 9%. A preliminary investigation accused the Henan New Wealth Group of absorbing public funds through internal and external collusion and operating third-party money brokers and platforms.

There has been no capital investment, capital transaction or business cooperation between Xuchang Investment and Henan New Wealth, whose business license was revoked in February, the Xuchang-based investment group noted in the folder.

Was claiming to have no control over the five lenders enough to keep Xuchang Rural Commercial Bank out of the storm? What type of bank is it? And what kind of relationship did he have with Henan New Wealth?

Incorporated in December 2009 with a registered capital of 1 billion CNY (150 million USD), Xuchang Rural Commercial Bank is legally represented by Xin Jinjun. It is the largest shareholder of the five rural lenders, according to information on the Tianyancha business registration platform. But Xuchang Investment says the rural commercial bank had no real control over the operation and management of the banks involved in the scandal.

The five lenders attended a 2021 annual business meeting of the Xuchang Rural Commercial Bank, during which its chairman commented on the overall operations and development of the five, according to an article posted on the Clearinghouse Center website. funds from rural credit banks.

Invisible shareholders

Xuchang Rural Commercial Bank has 73 shareholders, including 50 companies and 23 individuals, according to Tianyancha data. Xuchang Deyitian Agricultural Material is the bank’s largest shareholder with a 20.96% stake.

Although Xuchang Investment was not among the 73 investors, bond issuance documents it released last year showed that in 2020 its subsidiary had appointed six of the directors of Xuchang Rural Commercial Bank, more than half of the total number of seats on the board of directors, allowing it to control the bank. related activities.

Public data showed that 13 shareholders pledged 765 million shares of Xuchang Rural Commercial Bank to financial institutions. Among them, only Xuchang Deyitian Agricultural Material is listed on the stock exchange among the shareholders. The others, who did not appear, hold up to 759 million shares.

In addition, Henan police froze CNY 127 million (USD 19 million) of Xuchang Rural Commercial Bank shares held by six companies, including Henan Haijia Electric Appliances and Kaifeng Hengya Building Materials. None of them appeared in the list of 73 shareholders.

New Henan Wealth Links

Police have opened an investigation into Henan New Wealth, a shareholder in four rural banks in Henan, after the company was suspected of breaking the law, the China Banking and Insurance Regulatory Commission previously said. The case involves not only transaction issues between customers and rural banks, but also other complex business entities and structures, a CBIRC official noted on May 20.

Xuchang Investment pointed out in its May 25 filing that there was no capital investment, capital transaction or business cooperation with Henan New Wealth.

According to Tianyancha, Henan New Wealth was established in July 2011 with a registered capital of CNY 116 million. Its legal representative is Yu Zefeng, who owns 80% of the company’s capital.

Although Henan New Wealth was not on the shareholder list released by Xuchang Rural Commercial Bank, publicly available information has shown that they are inextricably linked.

Kaifeng Hengya Building Materials, one of the hidden shareholders of Xuchang Rural Commercial Bank, had the same contact phone number in the 2020 annual report as that of Haohong Machinery Equipment, a company owned by Henan New Wealth’s Yu Zefeng.

According to a 2016 court ruling, Xuchang Deyitian Agricultural Material, the largest shareholder of Xuchang Rural Commercial Bank, held 7.02 million shares of Xuchang Rural Commercial Bank on behalf of Zhengzhou Kaitai Trading. Yan Yong, the legal representative of Kaitai Trading, indirectly owns a stake in Yu Zefeng’s Haohong Machinery Equipment.

The shareholding agreement in the court judgment confirms the complex shareholding relationships between the stakeholders behind Xuchang Rural Commercial Bank and Henan New Wealth.

Publisher: Futura Costaglione

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