More than 60 investors went to the CBRC on April 30 to protest the Sichuan Trust mine explosion.
This month, the Communist Party’s Sichuan Banking and Insurance Regulatory Bureau fined Sichuan Trust 34.9 million yuan, charging it with 13 violations of the law. The complaint from investors is that “25.2 billion yuan of mines have burst, and more than 8,000 principals have suffered losses. Since the product default in June last year, investors have been defending their rights every week, going to Sichuan Trust Building, Sichuan Banking and Insurance Bureau, and Beijing.
It is common for mainland financial cases to burst into flames, but what many people are not expecting is that the majority shareholder of Sichuan Trust and Investment Company, which was restructured by Sichuan Trust and Investment Company and Sichuan Construction Trust and Investment Company, which is supervised by the Banking and Insurance Bureau, is a cousin of the triad leader Liu Han. Liu Han was sentenced to death in 2014 for triad organization crimes and other charges.
Liu Han’s cousin Liu Canglong is the de facto controller of the “Hongda system” and a well-known tycoon in Sichuan. The Hongda system is involved in mining, finance, real estate and other industries. The Hongda Group and Hongda shares, which are under the Hongda Family, together hold 54.2% of Sichuan Trust’s equity.
In the same year that Liu Han was executed, Liu Canglong was also “out of touch” for a long Time due to his involvement in a corruption case involving officials, and was once again out of touch after appearing in September 2016. During Liu Canglong’s disappearance, Liu Jun, his eldest son, presided over the Hongda system.
Sichuan Trust is accused of having a complex background “involving black and evil”
A Sichuan Trust investor, Wu Mei (a pseudonym), who is an active duty soldier, told the Epoch Times that Sichuan Trust has a complicated background. The company is “involved in black and evil”. The explosion is related to the “residual poison of Zhou Yongkang that has not been cleared up. “The company’s cousin Liu Canglong is Liu Han, who was shot dead. Zhou Yongkang is not the original Liu Han’s umbrella.”
Liu Han and Zhou Yongkang’s eldest son, Zhou Bin, are business partners. Most of the crimes associated with Liu Han occurred in Sichuan province, where Zhou Yongkang served as secretary of the Communist Party’s Sichuan provincial committee from 1999 to 2002. With the help of Zhou Yongkang’s father and son, Liu Han became the owner of five domestic and foreign listed companies and more than 30 enterprises. After Zhou Yongkang and Liu Han were arrested, Zhou Bin was also arrested and sentenced to 18 years in prison.
One aspect of Sichuan Trust’s “black and white” involvement is that it is a “retirement backyard” for government officials. The company’s top executives have worked in the Sichuan Finance Bureau, including the Banking and Insurance Regulatory Bureau, so it can be said that Sichuan Trust is a retirement garden for these government officials. For example, he originally worked in the Sichuan Banking and Insurance Regulatory Bureau, so his entire process, financial loopholes, they have a very clear grasp of the work to the Sichuan Trust, will certainly operate for Sichuan Trust, why so many years, its Ponzi scheme, its mine so big, why the state did not find it at all, it can be said that it is exploited a lot of loopholes. The bank insurance supervision bureau malfeasance is one side, Sichuan trust should also be exploited a lot of loopholes.”
The people believe that trust companies have “state supervision”, but do not know that these “supervisors” and “supervised” collusion. Wu Mei also discussed with her husband before buying Sichuan Trust products. I said, “Do you still want to buy? The company’s main goal is to provide the best possible service to its customers. But there is a regulation of the opposite also out of the problem.”
After the explosion, in the face of investors’ blame, Sichuan Banking and Insurance Supervision Bureau is so excused: “We have little manpower, we simply do not have time to regulate.”
Sichuan Trust and the regulator is a community of interest
Another investor, Tang Jian (a pseudonym), told the Epoch Times that Sichuan Trust and the regulator are a community of interest. “It has formed a community of interest with the local banking and insurance regulator, and is now in a state of thievery. The so-called working group it has set up has not resolved the risks at all, and has sung ‘praises’ at this latest Sichuan provincial government meeting, claiming that it has successfully resolved the risks and paid off the debts. It is saying something completely unfounded, the facts are here, how dare it say that.”
According to Caixin, Nishikawa Shingo claimed that the company’s current capital hole is around 25 billion yuan, but KPMG reviewed it and concluded that its capital hole is around 30 billion.
From the public information, almost all the products in this round of lightning are TOT products. The so-called TOT, that is, “trust in trust”, its operation is: the trust company to set up a trust product, and then the trust funds invested in other trust products, capital management plans, etc., layers of nesting, but also directly lead to the ambiguous investment.
A senior staff member of Sichuan Trust revealed to “Finance”, Sichuan Trust TOT products operating model is mostly like this: after the risk of trust projects can not be paid, with TOT product funds to take over, some projects can later pay back, some projects have been in the pool of funds “roll”, relying on the funds invested by subsequent investors to pay off The previous products. This is the so-called “borrowing new to pay off the old model”, also called “Ponzi scheme”.
The company’s main goal is to provide a comprehensive range of products and services to the public.
“All of this money is basically thrown into a vat, and then for example, your expiry, the time to pay you, take out money from this vat, to pay you, and then the majority shareholder also on the vat to take out money for his own use, misappropriation of funds, so it is very messy, it is not even taken to invest, financing.”
The money may even be taken to bribe officials. Wu Mei disclosed that before bursting the mine, the company will also pay back the money of the officials first. “Some people have a hard relationship, there is the money out of the case in advance, such as the two representatives, financial manager, ah, (Sichuan Trust was) before the disciplinary action he may give out, or just burst the time. There is also the project of Beijing Houhai ah, that should be involved in the second generation of officials, that may be the overall cash out. Beijing also invested a hundred million, and the bank president, vice president of the investment it, the money is not the right way are not easy to say.”
Wu Mei said, March 30, more than sixty investors to the CBIRC protest, the results were arrested into the Jiu Jingzhuang, to March 31 there are still 25 people not released, suspected that these people may be detained. These people “the afternoon of the 30th was intended to go to the Sichuan Office in Beijing, but the police are particularly large number of strict standby, went to the CBIRC, or the police dragged to the bus, pulled to the Jiu Jing Zhuang relief center.”
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