The biggest financial fraud case in history assets fell by 20percent, and the auction price exceeded 1.3 billion

category:Finance
 The biggest financial fraud case in history assets fell by 20percent, and the auction price exceeded 1.3 billion


According to Ali auction platform, Guangxi Liuzhou intermediate peoples court will conduct a second auction of large shares of three city commercial banks and four village banks from December 5 to 6. The starting price of each single auction is 20% lower than that of the first auction, and the accumulated auction amount exceeds 1.3 billion yuan.

It is understood that the shares of these banks to be auctioned are held directly or by affiliated companies of Guangxi Sino US Tianyuan financing guarantee group (hereinafter referred to as Sino US Tianyuan Group). Previous public information showed that the Sino US Tianyuan fraud loan case involved loans of more than 42 billion yuan. In September 2019, the case was finally adjudicated.

According to Ali judicial auction platform, 26 shares of 7 banks disposed by Liuzhou intermediate peoples court will be auctioned online from December 5 to 6, with a cumulative starting price of more than 1.3 billion yuan.

Specifically, the seven banks include Beibu Gulf Bank, Liuzhou bank and Guilin bank, as well as four Liuyin system village banks of Beiliu, Xingye, Bobai and Luchuan under Liuzhou bank.

Among them, Beibu Gulf Bank has two share auctions, involving 88 million shares, with the starting price of 183 million yuan; Guilin bank has an auction of nearly 57 million shares with a bid price of about 182 million yuan.

In addition, Liuzhou bank has three equity auctions, involving 110 million shares, 110 million shares and 30 million shares respectively, with a total starting price of 668 million yuan. Four Liuyin system rural banks have 5 shares listed respectively, with a total starting price of 88.6772 million yuan.

As a matter of fact, the above listed shares are controlled by Sino US Tianyuan Group. Therefore, in each share auction announcement, there is attached a statement on the price of net assets per share issued by the bank to Liuzhou intermediate peoples court and stamped with the official seal, which refers to to cooperate with the execution of the Sino US Tianyuan criminal case.

This is also the second collective auction of bank equity controlled by Sino US Tianyuan Group. Compared with the first auction held at the end of December 2019, the starting price of a single equity is reduced by 20%, and the equity targets of listed banks are adjusted.

At the first auction, a total of 30 shares of 8 banks were put up for auction. However, only 15 million shares of Liuyin village bank in Conghua, Guangzhou, were finally sold, and the rest were sold. Another 88 million shares of Beibu Gulf Bank held by three affiliated companies of Sino US Tianyuan Group have not yet appeared in the second auction.

Based on the listed equity at the time of the first auction, as of the time of the crime, Sino US Tianyuan Group controlled at least 14.65% of the shares of Liuzhou bank through three affiliated companies, and 13.54% of the shares of Beibu Gulf Bank through five related companies; it directly held about 57 million shares of Guilin bank, accounting for about 2.58% of the total equity of the bank at that time.

According to the judicial auction rules, if the second auction continues to flow, a third sell off will be carried out, and the sale price will be consistent with the second auction price. If the sale off stage still fails in the end, the court should decide how to deal with it.

In addition to bank equity, a piece of land owned by a subsidiary company of Sino US Tianyuan Group also appeared for the first time, with a starting price of 1.16 billion yuan, which gained high attention.

According to the announcement, the land is located on the east side of Zhuxi Avenue, Qingxiu District, Nanning City, and has not been developed at present. It is planned to refund the proceeds of auction to the victims of Sino US Tianyuan fraud loan case.

Involving Chinas the largest financial fraud case in history

The billions of yuan of bank equity and land auction is directly related to the Sino US Tianyuan fraudulent loan case which shocked the industry several years ago.

At the end of 2013, Li Yaoqing, chairman of Liuzhou bank, who took office a few days ago, found that the loan amount of Sino US Tianyuan Group and its affiliated enterprises accounted for more than half of the total loan amount of the whole bank, and new loan applications were constantly sent to the desk.

Considering that too high concentration of loans is not conducive to the risk control of the whole bank, after approving several loans, Li Yaoqing suspended the approval of new loan applications of Sino US Tianyuan Group and its affiliated enterprises. However, the normal risk control measures have angered the Wu Dong family behind the group.

In May 2014, Li Yaoqing was hacked and injured by the Wudong family hired murderer on the street. The case shocked Guangxi financial circle and prompted Liuzhou bank to speed up the verification of loans from Wudong family business. In mid August, the bank reported the case to the police on the grounds that the family business of Wudong was suspected of loan fraud and loan fraud.

In late January 2019, the Liuzhou intermediate peoples court publicly tried the case of Wu Dong and other 13 people suspected of obtaining loans by fraud. The first instance of the case has gone through two pre court meetings and two public sessions, with a total of more than 9 days and 70 hours, more than 80 participants and more than 1200 volumes of files. It is known as the largest financial fraud case in Chinas history.

The court found that from December 2010 to August 2014, Sino US Tianyuan Group, in the name of 38 companies and others under its control, fraudulently obtained bank loans by means of bill loan, trust loan, letter of credit, working capital loan, etc., by tampering with the financial information of loan subject and guarantee company, fictitious trade background, fictitious collateral and setting up false mortgage The income was allocated and used under the command of Wu Dong.

These funds flow into many fund pool companies and private accounts controlled by Sino US Tianyuan Group, and are used to repay bank loans, purchase equity of financial institutions, purchase land, develop real estate projects, invest in oil, transfer loans to others, and purchase and consume in the name of foreign investment companies, companies under actual control or affiliated companies. At the time of the crime, there were still 10.98 billion yuan of loans outstanding, of which 1.28 billion yuan was overdue.

At the same time, the court also ordered the defendant unit and its foreign investment, actual control companies and affiliated companies to refund the principal and interest of the victim bank; the stolen money and illegal income should be recovered and confiscated according to law and turned over to the state treasury.

Liu Zhong, former chairman of Liuzhou bank, lent nearly 6.9 billion yuan illegally

In the Sino US Tianyuan fraud loan case, Liuzhou bank is undoubtedly the biggest victim.

On the other hand, during the trial of the case, the Liuzhou peoples Procuratorate accused that as of the date of the case, the Wudong family had obtained 31.27 billion yuan of loans from Liuzhou Bank alone, a total of 250 cases.

The reason why Liuzhou bank has become the cash machine of Wudong family is inseparable from the help of Liu Zhong, the former chairman of the bank.

According to the investigation of Liuzhou intermediate peoples court, from 2007 to 2013, Liu Zhongli took advantage of his position as chairman of the board of Liuzhou bank to provide assistance for relevant units in handling loans, taking shares in the bank, undertaking bank outlet decoration and other aspects, and received property from relevant units and personnel, amounting to 13.0773 million yuan (including 9.023 million yuan attempted).

In addition, from 2010 to November 2013, Liuzhou bank, in violation of the commercial bank law and other laws and regulations, evaded the supervision of the banking regulatory authorities, took the way of splitting group customers into multiple single companies, and issued various loans to the companies of Sino US Tianyuan Group in excess of credit concentration; Liu Zhong, as the chairman of the bank, personally issued 66 loans, and illegally issued 6.874 billion yuan of loans.

Finally, Liu Zhong was sentenced to 11 years of fixed-term imprisonment for bribery and a fine of 1 million yuan; he was sentenced to 10 years imprisonment and a fine of 100000 yuan for the crime of illegally granting loans; he decided to execute 16 years of fixed-term imprisonment and a fine of 1.1 million yuan for several crimes. The bribes shall be confiscated according to law and turned over to the state treasury.

After the Tianyuan fraud case in China and the United States, the asset quality indicators of Liuzhou bank deteriorated rapidly. The non-performing loan ratio increased from 0.81% in early 2014 to 2.63% at the end of 2016, and the proportion of special interest loans increased from less than 9% to more than 30% in the same period.

Affected by this, the banks provision coverage index continued to decline, and the profitability was not ideal. Among them, in order to write off non-performing loans, the banks annual net profit fell by 88% in 2017, while its revenue increased by 17.2% year-on-year.

Since 2018, the net profit of Liuzhou bank has resumed growth, various asset quality indicators have also shown a positive trend, and the ability to resist risks is gradually enhanced. At the end of this year, the loan ratio of the bank has dropped to more than RMB 15.6 billion, and the loan coverage ratio has increased to more than RMB 17.6 billion by the end of this year. Liuzhou bank also held an enlarged meeting of the Party committee at the end of January 2019. The meeting was dedicated to re analyze and re understand the subjective and objective causes of the Sino US Tianyuan case, re deploy and re emphasize the rectification measures, order relevant departments to seriously rectify in place, learn from experience and lessons, and put an end to similar cases. In November 2019, Li Dunman, the current chairman of Liuzhou bank, said in an interview with the media that two to three years after the Sino US Tianyuan fraud loan case, Liuzhou bank had eliminated all the adverse effects of the case on the bank. Source of this article: Chen Hequn, editor in charge of securities companies in China_ NB12679

Since 2018, the net profit of Liuzhou bank has resumed growth, various asset quality indicators have also shown a positive trend, and the ability to resist risks is gradually enhanced. At the end of this year, the loan ratio of the bank has dropped to more than RMB 15.6 billion, and the loan coverage ratio has increased to more than RMB 17.6 billion by the end of this year.

Liuzhou bank also held an enlarged meeting of the Party committee at the end of January 2019. The meeting was dedicated to re analyze and re understand the subjective and objective causes of the Sino US Tianyuan case, re deploy and re emphasize the rectification measures, order relevant departments to seriously rectify in place, learn from experience and lessons, and put an end to similar cases.

In November 2019, Li Dunman, the current chairman of Liuzhou bank, said in an interview with the media that two to three years after the Sino US Tianyuan fraud loan case, Liuzhou bank had eliminated all the adverse effects of the case on the bank.