News from the Financial Associated Press, January 14 (Reporter Feng Qijuan)As stated in the announcement, under the basic policy of “supporting the good and limiting the bad”, the China Foundation Association will continue to improve the integrity information recording mechanism of the private equity fund industry to promote the healthy development of the industry in compliance.
On the evening of January 13, the China Foundation Association issued an announcement on the handling of abnormal operating institutions, which involved a total of 50 private equity funds. Due to abnormal operating conditions and failure to submit special legal opinions that meet the requirements within 3 months after the written notice is issued, the 50 fundraising funds will be canceled by the association, and the above-mentioned circumstances will be entered into the securities and futures market integrity file database.
Among the 50 private equity funds, private equity and venture capital funds are still the “hardest hit areas” for cancellation, with a total of 33 private equity funds being canceled; private equity securities investment funds and other private equity investment funds were canceled 10 and 7 respectively. The registered capital of the above-mentioned private equity funds is slightly differentiated, and the paid-in capital is between 2 million yuan and 205 million yuan; in addition, the establishment period is between 6 and 15 years.
According to the “Announcement on the Submission of Special Legal Opinions by Private Equity Fund Managers under Abnormal Operating Situations” issued by the China Foundation Association in 2018, “The private equity fund manager failed to submit a legal opinion that meets the requirements within 3 months after the written notice is issued. “Special legal opinions”, the association will be canceled in accordance with relevant regulations, and no re-registration will be allowed after cancellation.
China Foundation Association canceled 50 private equity companies in one go on January 13, which is the largest number of collective cancellations of private equity companies in the past two years. After sorting out the past announcements on the handling of abnormal operating institutions, it was found that in June and December 2020, the China Foundation Association canceled 57 and 50 private equity funds respectively. To this day, the record for the number of cancellations is still maintained.
In this cancellation list, there are also private equity funds that have been registered and canceled 2-3 times with the China Foundation Association. It was concluded that most of the previous products were canceled according to the announcement and there was no filing product before the cancellation.
It is noteworthy that well-known private equity affiliates of Cybernaut were once again on the list of cancellations, and according to the disclosure of China Foundation Association, a total of 13 affiliates of Cybernaut have been cancelled.
1 private equity company canceled 3 times, beware of those who have no products
After combing, it was found that among the 50 private equity funds that the association canceled on January 13, 4 private equity funds had previously been registered and filed after being canceled according to the announcement, and one private equity fund was even canceled 3 times before and after.
Up to now, Shanghai Zhishang Investment, which has been established for more than 8 years, has completed 3 registrations and deregistrations with the China Foundation Association.Unlike the cancellation by the association this time, the private equity fund was previously canceled in May 2016 and March 2017 according to the announcement. By March 2022, the China Foundation Association will list Shanghai Zhishang Investment as an abnormal operating institution.
According to the disclosure of China Fundamental Association, Shanghai Zhishang Investment completed the registration and filing in January 2015, September 2016 and October 2017. Although the registered address and office are located in Shanghai and Chengdu respectively, the specific addresses are different before and after. The registered capital and paid-in capital of the previous two times were 10 million yuan and 5 million yuan respectively. The registered capital and paid-in capital registered in 2017 were both 10 million yuan.
Before the first two official cancellations, Shanghai Zhishang Investment had no registered products. According to the private placement announcement information that has been canceled on January 13, there are 1 and 2 products that have been liquidated when the private placement is canceled, and products that have not been submitted for liquidation in the system when it is canceled.
According to the case filing information of Tianyancha, due to private lending disputes, loan contract disputes and other causes of action, Shanghai Zhishang Investment, as the defendant, has brought many companies and individuals to court. At the beginning of 2021, the private placement was fined 2,000 yuan by the Sixth Tax Office of the Shanghai Pudong New Area Free Trade Zone Taxation Bureau of the State Administration of Taxation due to illegal invoices.
Also established in 2014, Beijing Jinruilong completed the filing with China Foundation Association in March 2015 and October 2017. Previously, the cancellation was announced in August 2016. Similarly, there was no registered product before the private placement was first deregistered.
The relevant ruling in September 2021 pointed out that due to the violation of the property reporting system, Jinrui Longcai should pay the executor Li Qizhi the investment losses, arbitration fees totaling 416,000 yuan and the corresponding bank deposits for debt interest during the delayed performance period.Another Tianyan check shows that the equity of 8 limited partnership companies under Jinruilong has been frozen, all of which have been frozen for 3 years, and the latest freezing period will be until June 2025
Shanghai Shengdu Investment, established in February 2015, completed its registration with the China Foundation Association 7 months later, and was canceled according to the announcement after only one and a half years of existence. It was registered again in January 2017. Six years later, the private placement was canceled by the association.
According to the two filings before and after, the registered address and registered capital of Shanghai Shengdu Investment are different. Before the previous cancellation, there was no registered product and the type of manager was not filled in; the public information on January 13 shows that Shanghai Shengdu Investment is a private equity and venture capital fund, and its product is called “Shengdu Ruiying Private Equity Fund”. Equity investment FOF funds have not been submitted for liquidation in the system at the time of cancellation.
According to Tianyancha, from 2018 to 2021, Shanghai Shengdu Investment was involved in many lawsuits due to contract disputes and labor contract disputes.
Three months after its establishment, Shanghai Jingsheng Asset Management completed the filing with the China Foundation Association in January 2015, and for more than a year thereafter, the private equity did not have a filing product, and it was canceled in May 2016 according to the announcement. Three months later, Shanghai Jingsheng Asset Management, which completed the registration and filing, “transformed” from the original private equity securities investment fund to a private equity and venture capital fund.
In 2021, Shanghai Jingsheng Asset Management and its legal person Liu Yu were taken measures to restrict consumption; in October 2022, due to a dispute over the liability for damage to the interests of shareholders, the private equity received a copy of the complaint and a court summons, and it is scheduled to be held on January 12, 2023. The trial will be open at 9:30 a.m. on the 1st, and if the deadline is overdue, the judge will be absent in accordance with the law.
In March 2018, the China Foundation Association issued the “Announcement on the Submission of Special Legal Opinions by Private Equity Fund Managers under Abnormal Operating Situations”, which stipulates that “private equity fund managers fail to submit compliance within 3 months after the written notice is issued In the case of the special legal opinion stipulated, the association will be canceled in accordance with the relevant regulations, and no re-registration will be allowed after the cancellation. However, if an institution deregistered according to the announcement has real business needs, it may re-apply for registration as a private equity fund manager as required.
It is worth noting that the “cancellation according to the announcement” occurs when the first private equity fund product is canceled without filing within 6 months from the date of completing the registration procedures of the private equity fund manager. Affected by the epidemic, for private equity fund managers who are newly registered or have registered but have not yet filed their first product, the time limit for filing the first private equity fund product has been extended from the original 6 months to 12 months.
“Cybernaut” was canceled again, and private equity was once included in P2P
Looking at equity, among the 50 private equity funds mentioned above, Guangzhou Jiayao Fund and Cedar Holdings Shanghai Asset Management are all wholly-owned grandchildren of Cedar Holdings.
According to the official website, Cedar Holdings was founded in 1997 and is headquartered in Guangzhou. It is a Fortune Global 500 company and a leading commodity company in China that grew up in Guangzhou. It ranks 359th in the Fortune Global 500 in 2021 with a revenue of 233.4 billion yuan. , on the list for 4 consecutive years. According to public information, Zhang Jin, the founder and chairman of the board of directors of Cedar Holdings, once ranked 20th in the “New Fortune 500 Rich List” in 2017 with a personal wealth of 46.03 billion yuan. After being on the list for four consecutive years, it will rank 359th in 2021.
According to Tianyancha information, Cedar Holdings Group participated in the B-round financing of Kaiyuan Securities in 2019, and signed a wholly-owned acquisition agreement with Stanco Holdings Group, an international steel and raw material trading company, in 2020.
The situation is similar. Among the private equity funds canceled this time, the affiliated investment institutions of Jiaxing Tianhao Investment Management Co., Ltd. and Jiaxing Tianji Venture Capital Partnership (Limited Partnership) are Tianji Venture Capital.
According to the data, Xu Zhenbo, the founding partner and chairman of Dimensity Ventures, was previously a partner of Cybernaut Investment, vice president of Blue Mountain Investment, and a regional partner of Dachen Ventures Zhejiang. According to the invested projects disclosed by Tianyancha, the investment pace of Dimensity Venture Capital seems to have ended in 2019.
Coincidentally, among the above-mentioned 50 private equity funds, Changchun Hi-tech Cybernaut Venture Capital Management Co., Ltd. is also included. The founder of Cybernaut Zhu Min is the second shareholder of the company, holding 20% of the shares. According to the China Foundation Association, since 2016, there have been a total of 13 private equity funds with the name “Cybernaut” that have been canceled.
Once a well-known private equity fund in the primary market, today’s Cybernaut and its founder Zhu Min can be described as negative.
It is worth noting that among the private equity funds canceled this time, there is also a private equity fund that has invested in the Baolei P2P platform.
At the beginning of 2015, the P2P platform Koudai.com received several million Pre-A round investment from Jingbei Investment. In 2018, the ills of the platform emerged. In the process of asset review, Luo Mingxiong had reached a private agreement with the platform, and since then he will no longer intervene in the platform business.
According to public information, Luo Mingxiong, the founder and actual controller of Jingbei Investment, is also the founder of Angel Teahouse and the director of the Internet Finance Research Institute of Shanghai Jiaotong University. He holds senior management positions in institutions such as Beijing Stock Exchange and the Institute of Microelectronics of the Chinese Academy of Sciences, and is also the author of “Internet Finance”, “Internet Finance Blue Book”, “P2P Online Loan”, and was named “Top Ten Leaders in China’s Internet Finance in 2013”.