news

Cailianshe News, August 9 (Reporter Feng Qijuan)In November 2021, private equity firm Guopeng Investment was fined for three major violations of laws and regulations. At the same time, the regulator stated that the relevant responsible persons will also be dealt with separately in accordance with the law. Two years and nine months later, the then general manager of Guopeng Investment, Yang Baolong, was punished. In addition to the warning and fine, he was also banned from the market for life.

The Beijing Regulatory Bureau believes that Yang Baolong failed to fulfill his duty of loyalty and diligence, failed to perform his duties of managing the company and organizing the implementation of the company's investment plan, and organized Guopeng Investment to violate laws and regulations, and is the directly responsible supervisor. Based on the three illegal facts, the bureau decided to give Yang Baolong a warning and impose a total fine of 90,000 yuan.

Specifically: 1) For Guopeng Investment’s behavior of mixing other people’s property with fund property to engage in investment activities, Yang Baolong was given a warning and fined RMB 30,000; 2) For Guopeng Investment’s behavior of misappropriating fund property, Yang Baolong was given a warning and fined RMB 30,000; 3) For Guopeng Investment’s behavior of entrusting an institution that does not have the qualifications of a fund custodian to serve as a fund custodian, Yang Baolong was given a warning and fined RMB 30,000.

It is worth noting that the penalty letter emphasizes the harsh words such as the amount involved is extremely huge, the circumstances are extremely serious, and the social impact is adverse. In view of the fact that the above-mentioned illegal and irregular acts of Guopeng Investment involve an extremely huge amount of money, infringe upon the legitimate rights and interests of many investors, and the circumstances are extremely serious, which seriously disrupts the order of the securities market and causes adverse social impact, Yang Baolong is the person in charge who is directly responsible for the above-mentioned illegal and irregular acts of Guopeng Investment, and the circumstances of the illegal and irregular acts are extremely serious, the Beijing Regulatory Bureau has also decided to impose a lifetime market ban on Yang Baolong. From the date of the announcement of the decision by the Bureau, during the ban period, in addition to not being allowed to continue to engage in securities business in the original institution or serve as a director, supervisor, or senior manager of the original listed company or non-listed public company, he is also not allowed to engage in securities business in any other institution or serve as a director, supervisor, or senior manager of other listed companies or non-listed public companies.

Guopeng Investment received a ticket in November 2021. For these three violations, it was ordered to correct, given a warning, and fined a total of 90,000 yuan. In response, Guopeng Investment submitted a written statement of defense, and the bureau also held a hearing upon request. Guopeng Investment did not recognize the determination of misappropriation of fund property, and requested the bureau not to recognize the illegal and irregular behavior, but the bureau ultimately did not accept it.

Another private equity firm involved in the case, Yuanrong Investment, was fined by the Qingdao Regulatory Bureau as early as 2019, along with three senior executives including Yang Baolong. The fine pointed out that Yuanrong Investment facilitated Guopeng Investment to issue private equity fund products, and the actual fundraising, issuance, investment, management, investor maintenance and information disclosure of the private equity fund products Qingdao Yuanrong Guopeng Shengshi No. 1 Contractual Type and Qingdao Yuanrong Guopeng Shengshi No. 2 Contractual Type were all undertaken by Guopeng Investment; while Yuanrong Investment had no one actually managing the above funds, and could not clearly identify the underlying assets it invested in.

According to the China Securities Investment Fund Association, Guopeng Investment and Yuanrong Investment, in which Yang Baolong had a stake, were deregistered by the association in August 2020 and June 2020, respectively.

The determination of “revocation” of misappropriation of fund property was denied

Guopeng Investment is the manager of two private equity products, Guopeng Dingsheng Contractual Type and Guopeng Dingsheng No. 2 Contractual Type (hereinafter collectively referred to as: Guopeng Dingsheng Fund). Guopeng Investment committed three major illegal and irregular acts in the process of raising funds and investment operations of Guopeng Dingsheng Fund:

One is to confuse other people's property with fund property to engage in investment activities.

On February 23, 2018, Ningbo Gongyou Equity Investment Partnership (Limited Partnership) (hereinafter referred to as Ningbo Gongyou), a partnership-type private equity investment fund managed by Guopeng Investment, was established. Its main investment direction is to acquire part of the equity of Shengyue Network Technology (Shanghai) Co., Ltd. (hereinafter referred to as Shengyue Network) held by Shanghai Yaoquru Network Technology Partnership (Limited Partnership) (hereinafter referred to as Yaoquru Network).

Guopeng Dingsheng Fund invested RMB 274 million in Ningbo Gongyou. As Guopeng Dingsheng Fund has not yet completed its fundraising, Qingdao Yuanrong Guopeng Shengshi No. 1 Contractual Fund and Qingdao Yuanrong Guopeng Shengshi No. 2 Contractual Fund (hereinafter collectively referred to as Guopeng Shengshi Fund) paid RMB 274 million to Ningbo Gongyou on behalf of Guopeng Dingsheng Fund.

The "2018 Annual Report of Guopeng Dingsheng and Dingsheng No. 2 Contractual Private Equity Funds" issued by Guopeng Investment in April 2019 disclosed that Guopeng Dingsheng Fund indirectly holds 1.06% of Shengyue Network's shares through its holdings in Ningbo Gongyou.

The above-mentioned payment of capital contribution by Guopeng Shengshi Fund on behalf of Guopeng Dingsheng Fund to Ningbo Gongyou does not comply with the investment scope stipulated in the fund contract of Guopeng Shengshi Fund. Guopeng Investment used the property of other funds for the investment activities of Guopeng Dingsheng Fund, which is an act of mixing other people's property with fund property for investment.

The second is misappropriation of fund assets.

After the Guopeng Dingsheng Fund completed fundraising, Guopeng Investment transferred 272 million yuan from the Guopeng Dingsheng Fund's bank account to the bank accounts of its affiliated companies Tianjin Mingzheng Tongda International Trade Co., Ltd. and Kunwei Shengshi Asset Management (Beijing) Co., Ltd. Among them, 51.82 million yuan was transferred to the Guopeng Shengshi Fund's bank account, and the remaining 220 million yuan was eventually transferred to companies such as Liuzhou Huijun Automobile Sales Co., Ltd. and the bank accounts of several natural persons. The use of the 220 million yuan did not comply with the investment scope of the Guopeng Dingsheng Fund's fund contract and was diverted by Guopeng Investment for other purposes.

The third is to entrust an institution that does not have the qualifications of a fund custodian to serve as the fund custodian.

Guopeng Investment entrusted Qingdao Bank Co., Ltd., which does not have the qualifications of a fund custodian, to serve as the custodian of the Guopeng Dingsheng Fund and failed to fulfill its obligations of performing its duties conscientiously and diligently.

The November 2021 fine pointed out that Guopeng Investment stated in its defense materials and hearing that it would not recognize the determination of misappropriation of fund property. Mingzheng Tongda advanced the investment funds to Ningbo Gongyou on behalf of Guopeng Dingsheng Fund. After Guopeng Dingsheng Fund completed the filing, it repaid the advanced investment funds to Mingzheng Tongda and its designated recipients. There was no misappropriation of fund property. It was requested that the bureau not recognize the illegal and irregular behavior of misappropriation of fund property.

After review, the Beijing Regulatory Bureau believes that after Guopeng Dingsheng Fund completed the filing, the raised funds were actually transferred to the bank accounts of several enterprises and individuals. The use of funds did not comply with the investment scope stipulated in the Guopeng Dingsheng Fund contract, nor was it used to repay the advance investment funds. Guopeng Investment used the funds for other purposes. The Bureau did not accept the parties' statements, defenses and hearing opinions.

Tianyancha shows that Guopeng Investment is still in existence, with Guantong Consulting Services Co., Ltd. and Yang Baolong holding 90% and 10% of the shares respectively. Upon investigation, Mingzheng Tongda is a wholly-owned subsidiary of Guantong Consulting Services Co., Ltd.

According to the China Securities Association, Guopeng Investment was deregistered by the association in August 2020 due to abnormal operations. This is a private equity and venture capital fund established in November 2016 with a registered and paid-in capital of 100 million yuan.

According to Tianyancha, Guopeng Investment has been involved in multiple lawsuits, and some investors have also sought redress through legal means; in addition, the private equity fund has also publicly disclosed 35 equity freeze information; from September 2021 to the present, Guopeng Investment and its legal representative Song Yue have been restricted from consumption many times.

Another private equity firm was fined for "OEM"

It is worth noting that Qingdao Yuanrong Investment, which is a private equity product of Guopeng Investment, is held by Qingdao Bemonte Industrial Co., Ltd. and Yang Baolong with 51% and 49% shares respectively. Tianyancha shows that the private equity company is also in existence, and according to the China Securities Association, Qingdao Yuanrong Investment was deregistered by the association in June 2020 due to abnormal operations. It is also a private equity and venture capital fund.

As early as June 25, 2019, the Qingdao Regulatory Bureau issued a total of four fines to Yuanrong Investment and its three senior executives, all of which took the regulatory measure of issuing warning letters. The fines pointed out that as a shareholder and actual manager of the company, Yang Baolong was primarily responsible for the company's problems, and the then general manager Ren Shunying and the then legal representative Zhu Yun were directly responsible for the problems.

The ticket pointed out that after the bureau's on-site inspection and verification, it was found that Yuanrong Investment had three major problems:

First, Yuanrong Investment was seriously derelict in its internal control and private equity fund management, and failed to perform its duties and fulfill its obligations of honesty, trustworthiness, prudence and diligence. Yuanrong Investment facilitated Guopeng Investment in issuing private equity fund products. The actual fundraising, issuance, investment, management, investor maintenance and information disclosure of the private equity fund products Qingdao Yuanrong Guopeng Shengshi No. 1 Contractual Type and Qingdao Yuanrong Guopeng Shengshi No. 2 Contractual Type were all undertaken by Guopeng Investment; while Yuanrong Investment had no one actually managing the above funds, and could not clearly identify the underlying assets they invested in.

Second, the registration and filing information of Yuanrong Investment in the China Securities Association was not true or updated in a timely manner. Upon investigation, it was found that the company's actual office address was not the registered address; the registered executives Zhu Yun, Ren Shunying, and Xie Zhaohui did not actually perform their duties; and the relevant financial reports were not updated in a timely manner.

Third, Yuanrong Investment failed to properly preserve the relevant archival materials of Qingdao Yuanrong Guopeng Shengshi No. 1 Contractual Private Equity Fund and Qingdao Yuanrong Guopeng Shengshi No. 2 Contractual Private Equity Fund, and the whereabouts of these archival materials cannot be determined.

According to media reports, in August 2020, the Chaoyang District People's Court of Beijing issued a number of first-instance civil rulings on infringement liability disputes between investors and Tianjin Mingzhengtongda and others, showing that the defendants were Guopeng Investment and Tianjin Mingzhengtongda. The plaintiff required the defendants to pay the principal and interest of the fund he purchased, but the investor's lawsuit was rejected by the court only because the "Qingdao Yuanrong Guopeng Shengshi No. 1 Contractual Private Equity Fund Contract" had other provisions and the plaintiff should apply for arbitration to the arbitration institution.

According to the account funds provided by the whistleblower and inquired by the lawyer at the custodial bank, the private equity product Qingdao Yuanrong Guopeng Shengshi No. 1 involved in the case had 173 contractual investors, raised 272.1 million yuan, and had a fund account balance of 61.2 million yuan, of which 25.596 million yuan had been frozen and 35.607 million yuan had not been frozen. Qingdao Yuanrong Guopeng Shengshi No. 2 contractual private equity fund had 60 investors, raised 73.5 million yuan, had a fund account balance of 8.85 million yuan, had 0 yuan frozen and 8.85 million yuan had not been frozen. There was another 5 million yuan of funds returned to the fund custody account, and the total amount of funds returned to the account was 75 million yuan, and the total amount of funds frozen for preservation was 28.83 million yuan.