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some employees of zhejiang xinhu group co., ltd. (hereinafter referred to as "xinhu group") are in a dilemma: working and suing the company at the same time.

in the past 12 years, xinhu group has encouraged its employees to subscribe to the company's customized trust products in the name of "employee benefits". many employees have invested all their assets in the trust of the group's boss, huang wei, the former richest man in wenzhou.

but in june this year, xinhu group was exposed to have problems with the repayment of two products of huaxin trust, an internal employee wealth management product, involving a sum of 4.68 billion yuan. to this day, the problem has not been resolved.

picture/tuchong creative

“even the cleaning lady voted.”

"i have saved my money for more than ten years. it is very safe. i didn't expect that i would not be able to withdraw the money now."

chen yu (pseudonym), an old employee of xinhu zhongbao, has worked at xinhu zhongbao under xinhu group for more than 20 years. she told china news weekly that since 2012, xinhu group's subsidiaries have encouraged employees to purchase company-customized trust products issued by huaxin trust in the name of "welfare products", which are opened twice a year, either for continuation or repayment of principal and interest upon maturity. the yields for investors for one, two, and three years are 10%, 11%, and 12% respectively, with occasional fluctuations in the future.

this model operated for 12 years, but it was completely shut down in 2024.

the "debt confirmation notice" issued by the xinhu group trade union shows that as of july 15, huaxin trust·xinhu group single fund trust still has 3.1318 billion yuan and expected returns that have not been redeemed; huaxin trust·xinyuan no. 5 collective fund trust still has 1.5493 ​​billion yuan of principal and expected returns that have not been redeemed.

all together, the amount of money that cannot be withdrawn may reach 4.6811 billion yuan.

among them, the single trust was established in 2012 with a minimum investment of 1 million yuan. the employees signed a commission contract with the xinhu group trade union, and then the trade union connected with huaxin trust. the guarantors of the single trust are huang wei and li ping, the actual controllers of xinhu group; the collective trust was established in 2014 with a minimum investment of 3 million yuan. although the investor signed the contract directly with huaxin, the trade union was also initiating the process.

photo/provided by the interviewee

the minimum threshold for trust sales is often millions, and not all employees can get it. wang fan (pseudonym), who has worked for xiangcai holdings, a subsidiary of xinhu group, for eight years, told china news weekly that the total number of accounts of the two trusts reached 688, but there may actually be multiple investors under one account, "quite a few of them are 'linked' to one account, and many employees also put money from relatives and friends in." wang fan invested nearly 8 million yuan of his own and his relatives and friends' money in it.

chen yu said that many employees waiting for the trust to be redeemed had emptied their family assets, "a cleaning lady in the company even borrowed hundreds of thousands of yuan from relatives and friends to invest."

now that the trust funds have "disappeared", many employees believe that the intermediary trust company huaxin trust is to blame: huaxin trust did not accurately assess xinhu group's repayment ability and the underlying assets of the trust; it did not assume the responsibility of due diligence, and did not improve risk control in the process.

according to the details of a single trust fund ledger issued by the xinhu trade union and provided to china newsweek by a rights protection employee, huaxin trust did not receive any payments from the xinhu group trade union for trust subscription in 2022 and 2023, but huaxin did not inform investors.

on august 16, huaxin trust issued a statement saying that "during the period of existence of the trust project, the trust interests have been normally redeemed to investors in accordance with the provisions of the trust documents, and there is no project overdue situation."

according to the official statement of huaxin trust, both trust projects have been terminated and completed liquidation and trust property distribution in accordance with the provisions of the trust documents. the terminated non-cash trust properties (i.e. the debt assets enjoyed by xinhu group and xinhu holdings) have been distributed to the xinhu group trade union in accordance with the original distribution form of the trust property agreed in the trust documents.

in response to the above questions from investors, china newsweek sent an interview letter to huaxin trust, but no response was received as of press time.

after reading the two contracts provided by investors, liao hekai, an analyst at jinle function trust, told china news weekly that the above-mentioned trusts issued by xinhu group are only for employees. there are both single trusts and collective trusts, but they are actually the "channel business" of the trust company.

liao hekai introduced that the basic characteristics of channel business are: it is generally initiated and established in accordance with the wishes of the client out of compliance considerations. the trust company does not need to assume active management obligations and manages affairs and distributes trust property according to the client's instructions.

"as long as the trust company performs its obligations in full accordance with the contract, it has no additional liability. xinhu group needs to bear all subsequent responsibilities," liao hekai pointed out.

the mysterious former richest man in wenzhou

obviously, in addition to huaxin trust, the more important role is the assignee of the funds - xinhu group.

according to the two trust entrustment contracts provided by chen yu, it was stated respectively: "the group trade union subscribes to huaxin trust·xinhu group single fund trust as the trustee, and huaxin trust will loan all the entrusted funds to xinhu group" and "this trust plan invests in the specific asset income rights legally enjoyed by xinhu holdings co., ltd."

in other words, these trusts returned to the xinhu group (xinhu group, xinhu holdings) through huaxin in the form of loans.

regarding the difficulty in trust repayment, xinhu group attributed the problem to lack of funds. on july 10, xinhu group sent a letter to the group's labor union saying: "in early june this year, due to the impact of unexpected events, the company encountered greater liquidity difficulties and failed to transfer funds to your union in a timely manner, resulting in the inability to repay the investment funds of huaxin trust products in june and november 2024 in a timely manner."

photo/provided by the interviewee

an employee provided china newsweek with a video of the company's boss huang wei calming everyone down. the video was shot on august 9. huang wei put his hands together and pleaded with everyone to tide over the difficulties with the company. "my assets have been 'robbed' by someone, which has caused trouble for everyone. if the mine is taken back, everyone's money will be settled. if it is not taken back, i don't know what will happen. i may even go bankrupt."

it is understood that the "assets" and "mines" mentioned by huang wei refer to xinjiang yihua mining. tianyancha app shows that as early as 2006, xinhu group held a 41.075% stake in xinjiang yihua mining through its subsidiary "beijing huayi loncin trading co., ltd." and subscribed for capital in 2010. however, this part of the equity was pledged in 2022 and was frozen by different courts three times in 2024.

on august 7, xinhu group and xinhu holdings jointly sent a letter to the trade union, promising that after xinhu successfully defended its rights in the xinjiang yihua mining dispute, dividends would be repaid to investors in priority, while ensuring stable operations of other creditors and the company. according to media reports on september 2, xinhu group management stated that the company had filed a complaint with the hubei court regarding the mineral dispute.

however, the employees do not agree with the solution and statement of "protecting mining rights".

according to chen yu, the employees have confirmed with huaxin trust that the underlying assets of the trust are definitely not the mine. in their view, the mine was "forced" to be tied to the employee trust by huang wei. wang fan believes that huang wei is just stalling for time by using the mine as an excuse. the mining business started earlier than the employee trust, so how could the two be related?

what made the employees even more heartbroken was the change in huang wei. "boss huang often did charity work and said he wanted to share his wealth with his employees," chen yu recalled. wang fan also admitted that because they trusted the company, many employees did not regard the trust as financial management, and generally thought of it as "keeping money in the company."

after all, the investment ability of huang wei, the soul of the xinhu group, is obvious to all. in addition to the halo of the former richest man in wenzhou, his other identity label is "futures tycoon".

it is often said that huang wei entered the capital market in the 1990s by purchasing stock subscription certificates and quickly achieved "wealth freedom" by speculating in stocks and futures. after that, he kept stepping on the nodes of the times, successively invested in real estate and entered the financial industry, and built the "xinhu group" with his own two listed companies, xinhu zhongbao and xiangcai shares.

for a long time, many companies in the xinhu group's huge capital map have held shares in each other. even for a long time, as the behind-the-scenes controller of the huge commercial giant, huang wei did not hold any position in the xinhu group and related companies.

at the peak of their careers, in 2009, huang wei and his wife li ping were listed on the hurun report with a net worth of 30 billion yuan, ranking fifth on the china rich list, surpassing zong qinghou to become the richest man in zhejiang.

in 2016, huang wei and li ping ranked 57th on the hurun rich list with a net worth of 29 billion yuan, and were elected the richest people in wenzhou for three consecutive years.

can i get my money back?

in recent years, as the real estate industry has entered a downward cycle, the xinhu group has also had to face certain development challenges. xinhu zhongbao, which mainly focuses on real estate business, has not had stable performance in recent years. from 2018 to 2022, except for 2020 when its net profit showed positive growth, the rest have all experienced double-digit year-on-year declines.

despite this, huang wei and li ping's net worth is still 18.5 billion yuan in the hurun rich list 2023 and 16.5 billion yuan in the hurun global rich list 2024.

in fact, huang wei began to lay out diversified investments and asset-light operations during the last upswing of the real estate market. xinhu zhongbao transferred four real estate subsidiaries to sunac at a price of 6.7 billion yuan and 4.9 billion yuan in 2019-2020, and transferred multiple projects to greentown at a price of 3.6 billion yuan and 2.279 billion yuan in 2019-2024.

however, active transformation cannot completely resolve the difficulties on the capital side. according to the annual report, in 2023, xinhu zhongbao had total assets of 108.3 billion yuan and liabilities of 65.2 billion yuan. in february 2023 and january 2024, xinhu zhongbao transferred its shares to quzhou state-owned assets in two batches, cashing in about 5 billion yuan; xiangcai shares transferred 17% of its shares to zhejiang merchants assets to offset 3.2 billion yuan of debt.

bai wenxi, vice chairman of the china enterprise capital alliance, told china newsweek that the difficulties faced by xinhu group are not only employee trust issues, but also problems with its capital operation model. xinhu group adopted a high-leverage strategy to enter the real estate market, and reduced risks and participated in the financial market through diversified investments. although this model has brought rapid growth in the short term, it has also increased financial pressure and liquidity risks, and this pressure has become increasingly obvious.

what makes employees even more worried is the recent frequent news of equity changes and asset freezes in the "xinhu group".

on august 22, the listed company xinhu zhongbao co., ltd. was officially renamed quzhou xin'an development co., ltd., and has completed the relevant industrial and commercial registration procedures and was officially "taken over" by quzhou state-owned assets; on july 8, the actual controller of zhejiang caishang industrial holdings co., ltd., which owns 17.49% of xiangcai shares, also changed from the "xinhu group" to zhejiang merchants assets.

through complex capital operations, huang wei can always "hide" from the storm. tianyancha app shows that xinhu group and its affiliates have so far had 105 equity pledges, freezes and various debt disputes. but there are only three risks for huang wei, the actual controller of the group.

the xinhu group is trying to "escape danger" by converting its debts, even at the cost of giving up control of its high-quality assets, but its employees feel mixed emotions.

wang fan sighed, thinking that even if there were problems with the trust funds, the group still had two listed companies and the assets were visible and tangible. he did not expect that they had recently "changed hands".

china newsweek learned that some victimized employees have gone to their local economic investigation agencies to submit relevant materials regarding contract fraud cases involving xinhu group, xinhu holdings and huaxin trust. currently, shanghai, guangdong, fujian and other places have accepted the cases.

embarrassingly, most of the xinhu employees who invested money in the employee trust are still working. they come from many subsidiaries of xinhu group. this means that these workers have to work in the company while "collecting debts" from the company. while suffering losses, employees are worried about losing their jobs and reducing their wages, and they are worried that they will be treated differently by the company if they take legal means to protect their rights.

china newsweek tried to contact huang wei several times. when the call was connected and the employee trust issue was discussed, huang wei said, "ask the people in the company about this," and then hung up the phone. later, the relevant staff of xinhu sent the magazine a detailed report on the dispute between xinhu group and xinjiang yihua mining company, but did not comment on the employee trust issue.

references

"thunderbolt! well-known financial products are in a repayment crisis! where did the money go?", 2024-08-18, phoenix finance

"xinhu group is caught in a debt collection storm by employees, and actual controller huang wei exclusively responds to the reasons for the tight funds", 2024-08-15, first financial daily

"xinhu's boss huang wei's mysterious capital player has many connections with the yongjin group", 2018-06-18, beijing news

“dispute involving hundreds of billions of yuan? well-known private enterprise responds for the first time”, 2024-09-02, shanghai securities news

author: yu shengmei

editor: yu yuan