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Phoenix Finance "Banking Eyes" Text丨Xiaoxiao

On the evening of August 20, Chang'an Bank's official website issued a statement in response to the "1.252 billion yuan in deposits lost" incident, stating that "the relevant reports are seriously inaccurate. The documents, seals, and amounts used in the "Account Balance Statement" reported were all forged and altered. The case has been reported and accepted for investigation."

Earlier media reports said that Sunshine Private Equity Fund Youce Investment collapsed, and almost all of the 1.252 billion yuan deposited in Chang'an Bank was transferred away. By July this year, the balance in the bank deposit account was only 86,000 yuan.

Does this statement mean that Chang'an Bank is not responsible? Are the fund company and the custodian responsible? Who will bear the losses of investors? Phoenix Finance's "Banking Eyes" consulted lawyers on this issue.

Teng Ru, director of the Financial Investment and Financing Law Department of Beijing Jingshi (Tongzhou) Law Firm, told Phoenix Finance's "Banking Eyes" that "this statement cannot prove that the bank has no responsibility. Whether the bank should bear responsibility depends on the specific procedures and materials used by the bank to transfer the funds, which will be determined by the court or public security organs. The fund company and the custodian are the first to bear the brunt of this matter. They are suspected of breach of contract or tort liability. It depends on how the money was taken away by collusion between insiders and outsiders, and it may even involve criminal offenses. Who compensates the investors depends on the final division of responsibilities."

Phoenix Finance's "Banking Eyes" noted that during the "1.252 billion yuan in deposits lost" crisis, the auction of 147 million shares of Chang'an Bank was suspended.

The seventh largest shareholder goes bankrupt and undergoes restructuring

According to Alibaba Auction, the 147 million shares of Chang'an Bank held by Dongling Group were originally scheduled to be auctioned in two batches on August 19 and 22, with a total starting price of 332 million yuan.

Subsequently, the two equity auctions were suspended because the equity holder, Dongling Group, was declared bankrupt by other creditors and the court has ruled to enter bankruptcy reorganization procedures.

_{Screenshot of Alibaba Auction}

Phoenix Finance's "Banking Eyes" looked through the financial reports and found that Dongling Group is the seventh largest shareholder of Chang'an Bank, holding 365 million shares and a shareholding ratio of 4.82% as of the end of 2023. The 147 million shares auctioned this time account for 40% of Dongling Group's shares in Chang'an Bank.

_{Financial report screenshot}

It is worth mentioning that the starting price of the shares auctioned by Dongling Group is far lower than the net asset value per share of Chang'an Bank.

Among them, 95.657 million and 51.0392 million shares of Chang'an Bank were originally scheduled to be auctioned on August 19 and 22, respectively. The starting prices of the two auctions were equal to the appraisal prices, which were 221 million yuan and 111 million yuan, respectively, equivalent to the starting prices of 2.31 yuan and 2.17 yuan per share, respectively. In the 2023 annual report, the net asset per share of Chang'an Bank was 3.95 yuan. The starting prices of the two shares auctioned this time were more than 40% lower than the net assets.

In this regard, Wang Pengbo, chief analyst of the financial industry at Broadcom Consulting, said that current equity transactions of small and medium-sized banks are generally relatively unpopular among investors, and it is normal that the auction price is lower than the actual value.

In the future, whether Chang'an Bank needs to take responsibility for the "loss of 1.252 billion yuan in deposits" will be continued attention by Phoenix Finance's "Banking Eyes".