In just two or three years since its comeback, the "Delong Group" with Wutong Investment as its carrier has controlled three companies: Steyr, Yilipu and Zhongjie Resources. After Wutong Xiangyu took over Yilipu, he immediately reorganized the company's board of directors, and Liu Changle's son-in-law Zhang Jiayun became the company's actual controller.
Times Weekly reporter Tao Xinian from Hangzhou
On March 9, Zhongjie Resources (002021.SZ), which was originally scheduled to announce its restructuring plan, announced that it would postpone its resumption of trading due to its inability to complete relevant work.
Due to the planning of major asset restructuring matters, Zhongjie Resources has been suspended since the market opened on September 5, 2014. Previously, in July 2014, a large number of people from the "Delong Group" entered the board of directors and management of Zhongjie Resources; in November, the company's name was changed from Zhongjie Co., Ltd. (Zhongjie Sewing Machine Co., Ltd.) to Zhongjie Resources (Zhongjie Resources Investment Co., Ltd.), leaving the market with the foreshadowing of asset integration.
During this period, Zhongjie Resources' major shareholder, Zhongjie Holdings Group, declared bankruptcy and transferred all its shares; Zhongjie Resources also sold off a large number of its assets in a surprise move. The outside world is full of expectations and imaginations about the changes that Delong Group will bring to Zhongjie Resources.
Zhongjie shares with a bad record
Zhongjie Co., Ltd. is located in Yuhuan, Taizhou, Zhejiang. Its leading products are industrial sewing machines, which were launched in July 2004.
After its listing, Zhongjie Co., Ltd. was investigated and punished by the China Securities Regulatory Commission for illegally using a large amount of listed company funds, becoming a negative example among listed companies in Zhejiang.
In April 2008, the Zhejiang Provincial Securities Regulatory Bureau launched an investigation into Zhongjie Holdings. The following month, the Disciplinary Action Committee of the Shenzhen Stock Exchange publicly condemned Zhongjie Holdings, the controlling shareholder Zhongjie Group, the actual controller Cai Kaijian, and 17 relevant directors, supervisors, and senior managers of Zhongjie Holdings, who were primarily responsible. Six senior executives of Zhongjie Holdings, including Chairman Cai Kaijian and Financial Director Tang Weibin, resigned collectively.
On June 30, 2008, Zhongjie Resources received the "Administrative Penalty Decision" from the China Securities Regulatory Commission. The investigation results of the China Securities Regulatory Commission showed that from January 2006 to February 2008, Cai Kaijian instructed his niece, who served as the company's cashier, to use various deceptive means to avoid the management procedures of listed companies and transfer funds out of Zhongjie Shares many times without normal approval procedures. The amount was used by the major shareholder Zhongjie Group, involving an amount of more than 500 million yuan.
At the same time, in order to hide the fact that Zhongjie Group occupied funds and achieve consistent accounting, Zhongjie Group inflated bank deposits by RMB 74 million to RMB 300 million in its 2006 interim report, 2006 annual report, and 2007 interim report respectively.
"Although it is said that I have been punished this time, it can be regarded as a contribution to the capital market from the opposite side. It warns future generations not to follow Cai Kaijian's old path." Cai Kaijian had no objection to the punishment result and even sent a "Letter of Apology" to shareholders.
To the surprise of the outside world, the negative impact of being punished has not yet been eliminated, and Zhongjie Group has fallen into blind diversification development again. In this incident, the funds embezzled by Cai Kaijian were mainly used to acquire two companies in the steel and kitchen and bathroom industries: Zhongjie Huanzhou Steel Co., Ltd. and Zhongjie Kitchen and Bathroom Co., Ltd. Zhongjie Huanzhou Steel was formerly known as Zhejiang Huanzhou Steel, which was founded in 2001. It was acquired by Zhongjie Group at the end of 2005. In September 2009, it was renamed Zhejiang Zhongjie Huanzhou Supply Chain Group Co., Ltd. In June 2014, Zhongjie Huanzhou Supply Chain became the largest shareholder of Zhongjie Co., Ltd. through a non-public offering.
Zhongjie Kitchen and Bathroom was established at the end of 2007, formerly known as Zhejiang Sunelli Co., Ltd. established in 2001. Zhongjie Kitchen and Bathroom has two subsidiaries, namely Jiangxi Ofeiton Industrial and Guangdong Zhongjie Kitchen and Bathroom.
Both companies are joint-stock companies. According to Cai Kaijian's conception, they have the possibility of independent listing.
Cai Kaijian chose plumbing, bathroom, steel and logistics as the industrial entry points for the group's diversified operations, and he did not hesitate to damage the interests of the listed company Zhongjie Resources. What is doubly tragic is that the diversification of Zhongjie Group ultimately ended in disastrous failure.
In 2014, both companies filed for bankruptcy reorganization. The Yuhuan People's Court made a civil ruling in October 2014 and accepted the bankruptcy reorganization application of the applicants Zhongjie Supply Chain and Zhongjie Kitchen and Bathroom.
Times Weekly reporters learned that the main reason why Zhongjie Supply Chain fell into a debt crisis was that its controlling shareholder, Zhongjie Holding Group, occupied up to 400 million yuan in funds, resulting in a serious lack of funds in Zhongjie Supply Chain. In addition, there are high social borrowings and mutual guarantees in the Zhongjie supply chain, and financial costs are too high. The main business profits cannot support long-term debt operations, which further aggravates the company's debt crisis.
As of January 5, 2015, there were 130 households in Zhongjie Supply Chain that had declared claims, with an amount as high as 3.726 billion yuan.
Zhongjie Group declares bankruptcy
Before the Zhongjie supply chain and Zhongjie kitchen and bathroom were in crisis, Zhongjie Group was already suffering from the disease.
On September 1, 2014, Zhongjie Group applied for bankruptcy liquidation to the Yuhuan County People's Court on the grounds that it was unable to pay off its debts as they matured and its assets were insufficient to pay off all debts.
The court found that Zhongjie Group had assets of 527 million yuan, mainly external long-term equity investments, and liabilities of 2.63 billion yuan, mainly loans from financial institutions and social borrowings, with an asset-liability ratio of 499.12%.
On November 20, 2014, the first creditors meeting of Zhongjie Group was held in the First Court of Yuhuan Court. 71 creditors participated in the vote and approved and established a creditors committee composed of 6 creditors including the Yuhuan County Branch of the Agricultural Bank of China and Yuhuan County Supor Small Loan Co., Ltd. and 1 employee representative.
On January 20, 2015, Zhongjie Resources announced that it had received a bankruptcy "Civil Ruling" from the Yuhuan County People's Court. The "Ruling" held that Zhongjie Group was unable to pay off its due debts, and its assets were insufficient to pay off all debts; when the first creditors' meeting was held, the debtor and creditors had no application or plan for reorganization and reconciliation, and the creditors' committee also agreed to declare the debtor bankrupt. Therefore, it was ruled that Zhongjie Group was bankrupt. As a result, this "comprehensive enterprise group integrating clothing industry integrated equipment, kitchen and sanitary ware, logistics supply chain, metal processing, financial investment, real estate, electronic technology, ecological gardening, etc." and "China's Top 500 Private Enterprises" sadly withdrew from the stage of history.
Regarding the current bankruptcy situation of Zhongjie Group, Liu Biying, vice president of Zhongjie Group, once told the media: Affected by local guarantee chain problems, the group's subsidiaries paid more than 100 million yuan in compensation for external guarantees. At the same time, operations were also affected by the economic situation. In addition, Zhongjie Group's loans were reduced by 700 million to 800 million yuan by banks in the past three or four years, ultimately forming a vicious circle.
Behind the bankruptcy of Zhongjie Group, the listed company Zhongjie Resources was also seriously affected.
In July 2014, the Zhongjie Resources shares held by Zhongjie Group and Cai Kaijian were waiting to be frozen by the Intermediate Court of Shiyan City, Hubei Province, and the shares held by Zhongjie Group were also waiting to be frozen by the Xiacheng District Court of Hangzhou City, Zhejiang Province.
According to Zhongjie Resources’ announcement, Cai Kaijian had privately engraved the company’s official seal and signature of the company’s legal representative, used the name of a listed company to provide guarantee for Zhongjie Group’s loan to Zhang Haibin and stole the company’s official seal, and provided guarantee for Taizhou Endu Hotel Co., Ltd.’s loan to Du Hong and others. The bank deposits related to Zhongjie Resources were frozen by the Puning City People’s Court of Guangdong Province, the Huzhou Intermediate People’s Court and other courts.
In this context, Zhongjie Resources began to sell off assets unexpectedly.
On September 23, 2014, Zhongjie Resources transferred 51% of the equity of Dürkopp Adler Sewing Equipment (Suzhou) Co., Ltd. to its counterpart Shanggong Shenbei (600843), with a transaction price of 16.3 million yuan; on September 25, Zhongjie Resources transferred 29% of the shares of Dürkopp Adler held by China Czech Resources to Shanggong Europe, with a transaction price of 116.65 million yuan.
In October 2014, Zhongjie Holdings issued another announcement that it planned to transfer its 55% stake in Zhonghui Futures Brokerage Company for a price of 114 million yuan. Zhonghui Futures was established in 1993, formerly known as Liaoning Shengjing International Futures, and later changed its name to Zhejiang Xianheng Futures. When Zhonghui Futures increased its capital in April 2008, Zhongjie Resources invested 34.1 million yuan to acquire 55% of the shares and became the controlling shareholder.
The sale of the above-mentioned assets by Zhongjie Resources is not only to alleviate the debt crisis, but also to inject clean-up opportunities into the "Delong Group" assets. In addition, in the view of industry insiders, the change of name of Zhongjie Co., Ltd. to Zhongjie Resources may mean that its main business will move closer to the "resources" category. Among the current related assets, only Xiliduo Mining in Tuquan County, Inner Mongolia was acquired for 200 million yuan in 2012.
Executives from the "Delong family" settled in advance
It is worth noting that long before Zhongjie Group, Zhongjie Kitchen and Bathroom, and Zhongjie Supply Chain applied for bankruptcy and reorganization to the Yuhuan Court, a number of executives with "Delong" backgrounds had already controlled the board of directors and management of Zhongjie Resources.
In July 2014, Zhongjie Resources held an extraordinary general meeting of shareholders to re-elect the board of directors.
According to the data, the new chairman and general manager Ma Jiancheng graduated from Xinjiang Vocational University with an accounting major. He once worked at the Xinjiang Hutubi Branch of the Agricultural Bank of China; he has served as the general manager of Damo Trading Co., Ltd. and the general manager of Shanghai Tang Investment Consulting Co., Ltd. Before joining Zhongjie Resources, he served as the vice chairman of Zhongjie Holding Group.
Liu Changgui, director and head of the internal audit agency, served as director of the Economic Division of the Policy Research Office of the Party Committee of the Xinjiang Autonomous Region, president of Huaan Property Insurance, chairman of Zhongfu Securities, and director of Chongqing Genuo Ecological Agriculture Company. He was Tang Wanxin's right-hand man.
Director Guo Haitao graduated from Xinjiang Radio and Television University and has served as vice president of Runtian Agricultural Equipment Company and chairman of Xinjiang Hongen Trading Company.
Along with the reelection of the board of directors, the company's core executives also began to change their leadership. The new financial director, Ye Lifen, was the audit manager of Xinjiang Chiyuan Tianhe Accounting Firm; the new board secretary, Wang Duan, was the board secretary of Alloy Investment, a core listed company of the "Delong Group".
Almost all the above-mentioned directors and senior executives have backgrounds in Xinjiang, and Xinjiang is the birthplace of the "Delong Clan".
After the "Delong Group" settled in, Zhongjie Resources resumed trading and surged on August 8, 2014. But less than a month later, on September 5, Zhongjie Resources was once again suspended from trading due to the planning of major events.
During the trading suspension period, on February 15, 2015, the manager of Zhongjie Holdings Group signed a share transfer agreement with Ningbo Yuanxi. The manager of Zhongjie Group planned to transfer 16.42% of the shares in Zhongjie Resources held by Ningbo Yuanxi for a total transfer price of 802 million yuan. The transfer price of 7.10 yuan per share is equivalent to the share price of Zhongjie Resources before the suspension. According to the decision of the creditors' meeting, the income from this equity transfer will be distributed together with other bankruptcy properties of Zhongjie Group.
After the transfer is completed, Zhongjie Group will no longer hold shares in Zhongjie Resources; Ningbo Yuanxi will replace it and become the second largest shareholder. The largest shareholder is still Zhongjie Huanzhou Supply Chain Group, holding 17.45% of the shares, and Cai Kaijian also holds 8.85% of the shares.
Ningbo Yuanxi, who entered this time, is closely related to the "Delong Clan".
Ningbo Yuanxi Equity Investment Fund was established on February 5, 2015. Yu Kaikai invested 27 million yuan; Hangzhou Guanze Investment Management Co., Ltd. invested 3 million yuan and is the legal representative of the enterprise.
A reporter from Times Weekly found out that Hangzhou Guanze Investment was established in January 2015, and its shareholders are Yu Kaikai and Xu Quanzhu. In 2013, Xu Quanzhu represented Hangzhou Sosibon Investment Management Co., Ltd. and participated in the acquisition of the American WAL company by Zhejiang listed company Midu Energy (600175.SH).
Hangzhou Sosibon was established in July 2011 with a registered capital of 10 million yuan and its legal representative is Zhu Xiaohong. Zhu and He Ling, Guo Meizhong and Fu Youxing contributed 3 million yuan, 3 million yuan, 2 million yuan and 2 million yuan respectively. Zhu Xiaohong is the key figure in the "Delong Clique"'s reorganization of Yilipu.
On June 20, 2013, Yilipu announced that the company's top three shareholders would transfer their 38.46 million shares to Wutong Xiangyu. The latter became the largest shareholder with a shareholding ratio of 24.66%. Zhu Xiaohong is a shareholder of Wutong Xiangyu, holding 16.875% of the shares and 10.68% of the voting rights.
Wutong Xiangyu, who took over Yilipu, is a company with a "Delong family" background.
Liu Changle sets up the stage, and the "Delong family" sings?
The controlling shareholder of Wutong Xiangyu is Wutong Investment. Wutong Investment was established in June 2011. Shanghai Changshen, Beijing Zhenghe Xingye and Dornier Investment hold 40%, 40% and 20% of the shares respectively.
The people who currently control Wutong Xiangyu and Wutong Investment are all from Wutong Capital. Wutong Capital was established in Hong Kong in 2011. Liu Changle, chairman of the board of directors of Phoenix TV, serves as the chairman and legal representative; his son-in-law Zhang Jiayun serves as the director and executive president of Wutong Investment and the legal representative of Wutong Xiangyu. The three positions of President, Vice President and Executive President of Wutong Capital are held by Delong’s former subordinates Xiang Hong, Zhu Jiagang and Zhang Yeguang.
After Wutong Xiangyu took over Yilipu, he immediately reorganized the company's board of directors, and Liu Changle's son-in-law Zhang Jiayun became the actual controller of the company.
Zhang Jiayun, born in 1980, holds a bachelor's degree in finance and graduated from the University of Southern California in 2004. From February 2005 to October 2010, he served as the president of American Weishi International Trading Company; from 2011 to present, he served as director and executive president of Wutong Investment Co., Ltd. In Yilipu, Zhang Jiayun serves as a director.
Also serving as a director is his wife Liu Didi. Liu is a permanent resident of Hong Kong, born in 1980. He studied at Emerson College from 1998 to 2002; from 2004 to 2006, he studied at the University of Southern California and received a master's degree; from 2009 to 2011, he studied at Southwestern Law School and received a doctorate; from 2011 to present, he serves as the assistant to the president of Phoenix TV.
It can be seen from the resume that Zhang Jiayun and Liu Didi are both alumni of the University of Southern California in the same year.
Zhu Jiagang, chairman of Yilipu, is an out-and-out "Delong family" general. In 2000, Zhu served as the president of European Delong Co., Ltd. and was engaged in planning and executing M&A projects in Europe for Chinese domestic enterprises in Germany. From 2011 to present, he serves as executive vice president of Wutong Investment and general manager of the European company.
The situation of Steyr (formerly known as "Boying Investment") is similar. Steyr is the first target of the "Delong Group" after its comeback. Its current chairman Liu Xiaojiang, former chairman Zhu Jiagang, Zhang Minxue, Yang Funian, and former independent director Wang Shiyu are all former Delong players. Some media reported that when they intervened in Steyr, all former "Delong Group" executives such as Xiang Hong, Yang Funian, Wang Shiyu, and Jiang Fafa were mobilized.
In 1992, Xinjiang Delong Industrial Company was established, and Tang Wanxin began to build the Delong Empire. From 1996 to 1997, Delong successively took over Xinjiang Tunhe, Alloy Co., Ltd., and Hunan Torch, establishing the Delong Group's "troika".
In December 2004, Tang Wanxin was arrested and sentenced to eight years in prison for allegedly absorbing public deposits and manipulating securities transactions in disguised form. The Delong Empire collapsed.
Some media reported that after Tang Wanxin was released on medical parole in October 2009, the old "Delong Clique" began to reunite, and many generals gradually gathered under Liu Changle's Wutong Capital.
For example, Zheng Yue, the vice president of Wutong Capital, was the president assigned by the "Delong Clique" after taking control of Hengxin Securities; Zhang Yaguang, the executive president of Wutong Capital, was Tang Wanxin's roommate in college and was Delong's second-in-command.
In just two or three years since its comeback, the "Delong Group" with Wutong Investment as its carrier has controlled three companies: Steyr, Yilipu and Zhongjie Resources. If there are no accidents, these three companies may become the "new troika" of "New Delong" in the capital market.
If the "Delong series" makes a comeback…
Tao Xinian
The decline of Zhongjie's resources provided the "Delong series" with a keen sense of smell and a perfect opportunity to take over.
After controlling the board of directors and senior management of Zhongjie Resources and taking over the company's second largest shareholder, Zhongjie Resources is expected to become a major capital control platform for the Delong Group if it resumes trading. By then, the stock price of Zhongjie Resources will experience the thrills and excitement of a roller coaster like Steyr and Ilipu before.
In the process of controlling Steyr, Yilipu, and Zhongjie Resources, the Delong Group demonstrated operational characteristics such as advance layout, stealth mergers and acquisitions, and evasion of supervision. The relevant techniques were extremely proficient, but the huge fluctuations in stock prices also made investors tremble.
"Whatever we gamble with our lives must be the most exciting." This is Tang Wanxin's famous saying. The Delong Group at that time brought great vitality to the dormant Chinese capital market, and also left deep pain for many investors. While the wonderful story of Delong and Tang Wanxin was achieved, many retail investors were wiped out and their business relationship changed.
Tang Wanxin's eight-year sentence has long expired, but since he was released on medical parole in 2009, he has not appeared in public and has never responded to rumors about the comeback of the Delong team. On the contrary, all parties are trying their best to downplay Deron's color.
Zhang Jiayun (son-in-law of Liu Changle), who has cooperated heavily with Delong people, once tried his best to distance himself from the "Delong family" to the media, saying, "We only hired old people from the Delong family. Xiang Hong introduced some old people from the Delong family to the company, but the company did not hire them all."
Zhu Jiagang, who has served as chairman of two Delong companies, Steyr and Yilipu, also said: Delong is easier to create an atmosphere of hype in the media, which is not fair to those who used to work for Delong. With the gradual improvement of the regulatory system, it is impossible for another "Delong" to appear.
According to "Value Line" magazine, New Delong has changed its past high-profile approach to doing things, broken it into parts, and sneaked into the world. It can be roughly divided into three levels.
The first level is the old Delong department, which is dominated by Lu Jianzhi, Wang Shiyu, Nie Xinyong, etc. The platform includes the "Xianghui Department", "Contemporary Department" and "Dingxin Department"; the second level is derived from the first layer of relationships and has long-standing ties with the old Delong Department. Important partners with long-term cooperative relations, among which the "Wutong Department" headed by Xiang Hong is the representative; the third level is related parties that are not affiliated with Delong's old department, but have cooperation from time to time. Typical examples are the "Tehua Department" controlled by Tang Wanxin's friend Li Guangrong.
For ordinary investors, the listed companies in which the Delong Group intervenes have the temptation of skyrocketing stock prices, but there is also the possibility of being bloodbathed. In front of capital giants like Delong, retail investors should stay calm and stay calm, in addition to watching the excitement.
