Zhu Yicai, a real controller of Yurun Group, has returned home after being monitored for nearly four years.

 Zhu Yicai, a real controller of Yurun Group, has returned home after being monitored for nearly four years.

Nearly four years after the news of the Beijing News, new progress has been made in the case of Zhu Yicai. On January 22, Yurun Department Nanjing Central Market (Group) Co., Ltd. (600280.SH) announced that it had received notification from Zhu Yicais family members on January 22 and that Zhu Yicai, the actual controller of the company, had returned home.

The announcement shows that Zhu Yicai is the actual controller of the company. He is not currently in a position in the company, and the companys operation is normal.

On March 26, 2015, Yurun Food issued a public announcement that Zhu Yicais family members were notified. On March 23, the procuratorial organ implemented compulsory measures for Zhu Yicai, the chairman of the company and the actual controller, to monitor his residence at his designated residence.

Zhu Yicai, Merger and Acquisition of State-owned Enterprises

According to public information, Yurun Holding Group is a diversified enterprise group which integrates seven major industries, including food, real estate, commerce, logistics, tourism, finance and construction. At present, Yurun Food (1068.HK) and Central Market (600280.SH) are two listed companies. The comprehensive strength of enterprises ranks 112 in the top 500 of Chinese enterprises and 8 in the top 500 of Chinese private enterprises. It was once called the largest meat product enterprise in China.

The founder of the meat empire was Zhu Yicai, an Anhui native born in 1964.

In 1989, Zhu Yicai graduated from Hefei University of Technology and was assigned to work in a shipping company under the Department of Communications of Anhui Province. Anxious about eating imperial grain, Zhuyi Qian soon abandoned the iron rice bowl and went into business.

It is reported that Zhu Yicai used his 200 yuan savings to buy a tricycle to do business with a Japanese aquatic products trading company, from which he reaped the first barrel of gold in his life. At the end of 1992, Zhu Yicai came to Nanjing to establish Yurun Group, which marked the formal birth of the future Jiangsu private enterprise giant.

1996 is one of the most important years of Zhu Yicais business career. In that year, Zhu Yicai successfully acquired Nanjing Cannery. The acquisition of 70 million state-owned enterprises by private enterprises with total assets of 5 million yuan has been called the first private entrepreneur in Jiangsu and even the whole country to acquire state-owned enterprises, which has caused a sensation in the whole country.

In the next few years, Zhu Yicai continued to swallow the elephant by snakes in Lianyungang, Jiangsu and Fuyang, Anhui by means of capital operation such as acquisition, merger and reorganization.

As a result, Yurun Myth was born. In October 2005, Yurun Food was successfully listed in Hong Kong. Zhuyis fortune and wealth surged by 3 billion yuan, making it the richest man in Jiangsu Province.

In June 2009, Zhu Yicai took control of Nanjing Zhongshang, a listed company with A shares. Nanjing Zhongshang later changed its name to todays central shopping mall.

Nanjing Chinese businessmen were first established in 1936, and they are the backbone retail enterprises of great historical significance in China. The ownership of this listed company marks another step in Zhu Yicais wealth career.

As business grows bigger and bigger, the plan of wishing Yicai becomes more and more grand.

In 2010, Yurun Group announced the three, three and three development strategy, that is, to build a global procurement center for Yurun agricultural and sideline products in 30 provincial capitals, a logistics distribution center for Yurun agricultural and sideline products in 300 prefecture-level cities, and a breeding and production base for Yurun agricultural and sideline products in 3000 counties.

According to the credit data of rating agencies, by the end of September 2015, the total value of Yuruns fixed assets, construction under construction and intangible assets amounted to 11.2 billion yuan, accounting for 73.66% of the total assets, which was significantly higher than that of Shuanghui (58.16%).

However, whether Yuruns large-scale expansion funds are really invested in the main meat industry or in the real estate industry has been controversial. China Debt Credit said that Yurun Foods operating net cash flow continued to flow substantially, mainly due to the substantial increase in payments to related parties, including related transactions with other subsidiaries of Yurun, and the ultimate flow of related party funds may be the real estate business.

While investing heavily in real estate business, Yurun Groups profit source, food business, is growing sluggishly. From 2011 to 2014, before the Zhuyi financial case, Yuruns turnover shrank year by year, with HK$32.315 billion, HK$26.782 billion, HK$21.440 billion and HK$19.158 billion, respectively.

Seeking Catcher after the Debt Crisis

On March 26, 2015, Yurun Food Announcement announced that Zhu Yicais family members were notified. On March 23, the procuratorial organ implemented compulsory measures for Zhu Yicai, the chairman of the company and the actual controller, to monitor his residence at his designated residence.

The news of residential surveillance marks that the myth of the richest man in Jiangsu created by Zhu Yicai of Anhui people pressed the pause button.

In 2015, Yurun Food suffered a huge loss of HK$2.98 billion, the largest annual loss since its listing in Hong Kong in 2005.

In addition to losses, the previous large-scale expansion of Rainbow stepped into the debt crisis whirlpool and broke out the debt crisis.

According to the Beijing News, in November 2018, Zhu Yicai was described as suspected of violating the law and regulations in a ruling of the Supreme Court, which was the only description of the progress of Zhu Yicais case in public information.

In its ruling, Nanjing Yurun said that Zhu Yicai, the actual controller of Yurun Group, was taken compulsory measures to monitor residence since March 3, 2015, which led to a sharp deterioration of the financing environment of the whole Yurun Group.

Prior to this, Yurun Central Market of listed companies announced that Zhu Yicai, the actual controller of the company, had been applied for property preservation by the Export-Import Bank of China in the case of disputes over financial loan contracts with the Export-Import Bank of China.

On March 17, 2016, the core enterprise of Yurun, Nanjing Yurun Food Co., Ltd. (hereinafter referred to as Nanjing Yurun), announced that the first issue of short-term financing bills in 2015 (i.e. 15 Yurun CP001) should pay principal and interest on that day. However, the company failed to raise the full amount of debt repayment funds in accordance with the agreement and failed to pay in full on time, which marked the formal default of Nanjing Yuruns debt.

Credit rating agencies previously said that Zhu Yicai, the real controller of Yurun, had been monitored by the designated residence. So far, no progress has been made. This incident has had a great impact on Yuruns operation, financing and finance in Nanjing, triggering Yuruns debt crisis in advance.

In this context, in September 2015, Yuruns Yurun Food and the Central Market announced that Yurun was discussing strategic cooperation with Rongchuang China, Rongchuang China might buy Yuruns stake in Yurun Food, and promised to provide comprehensive support to Yurun and discuss with creditors the solution of Yuruns debt problem.

However, Rongchuang China withdrew from the cooperation 12 days later. According to the announcement of the central shopping mall, the reason is that it takes too long to complete the potential exchange and cannot be completed within the acceptable time of rain. At the same time, Rongchuang Chinas major shareholder Rongchuang International launched, expressing interest in contacting Yurun and negotiating strategic cooperation.

By January 2016, the negotiations had failed again. According to reports, Sun Hongbin mentioned the Yurun Food Project in Shanghai, saying that the failure of Yurun Food Actual Controller to sign was one of the main reasons for the closure of the transaction. According to Sun Hongbin, at the beginning of the negotiation between Rongchuang International and Yurun Holding Group, the negotiator of Yurun Holding Group said that the actual controller of Yurun Food could sign.

After Rongchuang, Jiangsu private capital Sumin Investment also expressed interest in taking over.

At the end of 2017, the head of Sumin Investment said publicly, We have applied to the provincial government to take the lead in organizing private enterprises to restructure Yurun Group in the province to resolve its debt crisis, and are waiting for opportunities to promote it.

According to the economic report of the 21st century in October last year, Su Mintou disclosed that the company is following up on major projects such as Yurun and Sanxiang. Both provincial and municipal governments believe that as the only representative of private enterprises in Jiangsu Province, Su Mintou should play a special role in major projects such as Yurun and Sanxiang. At present, the project is being followed up.

According to reports, Jiangsu Private Investment Holding Co., Ltd. is the first provincial-level private investment consortium in China. Its registered capital is 9.6 billion yuan. It is jointly established by more than 10 well-known private enterprises in Jiangsu, such as Shagang Group, Xiexin Group and Red Bean Group. It was officially launched in June 2016, with the mission of gathering private capital in Jiangsu to promote the transformation and upgrading of business in Jiangsu.

It is noteworthy that, as the leading private enterprises in Jiangsu, Yuruns debt situation has received the attention of Jiangsu officials.

On November 21, 2018, the Beijing News exclusively reported that under the guidance of Jiangsu Provincial Government Finance Office, Yurun Group Financial Creditors Committee was established in 2016 and plans to restructure Yurun Groups overall debt. From the end of 2017 to the beginning of 2018, the provincial government of Jiangsu Provincial Committee authorized the Nanjing Municipal Government to handle the debt crisis of Yurun Group. The Nanjing Municipal Government held several meetings to discuss the debt restructuring of Yurun Group.

Reporters of the Beijing News also learned that at present, a number of institutions have submitted restructuring plans to the government, the debt Committee and Yurun Group, and all parties of the debt committee are discussing with interested restructuring parties.

Source: Zhang Xianchao_NN9310, responsible editor of Beijing News