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many employees of zhejiang xinhu group co., ltd. (hereinafter referred to as "xinhu group"), a well-known zhejiang private enterprise, are caught in a dilemma as they have to work and collect debts from the company at the same time.

over the past decade, xinhu group has encouraged employees to subscribe to company-customized trust products in the name of "employee benefits." many employees invested all their assets in the trust of the group's boss, huang wei, the former richest man in zhejiang. but in june this year, xinhu group was exposed to problems with the redemption of two products of huaxin trust, an internal employee wealth management product, involving an amount of up to 4.6 billion yuan.

huang wei, chairman of xinhu group, said that the above situation was due to the tight funds caused by the xinjiang yihua mining dispute, and there is currently no relief plan for the overdue trust.

"employee benefits" exploded, 4.6 billion yuan of funds "disappeared"

on the eve of liquidation, employees were still being called on to subscribe

according to china business news, in june this year, when the interest and principal that should have been paid were not paid as scheduled, xinhu group employees realized that the financial products they subscribed to had "exploded". subsequently, employees went to the xinhu group headquarters to seek solutions.

on july 10, xinhu group sent a letter to the group trade union committee: "1. in early june this year, due to the impact of unexpected events, the company encountered great liquidity difficulties and failed to allocate funds to your association 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. the company deeply apologizes for this, which has caused difficulties and concerns to investors. 2. the company confirms the claims of investors under the above two trust products. 3. the company will go all out to ensure that the interests of investors are properly resolved through all possible measures such as market value increase, mine protection and rights protection on the basis of stabilizing the value of the company's existing assets."

according to the credit confirmation notice, as of july 15, huaxin trust·xinhu group single fund trust still had 3.1318 billion yuan and expected income not paid; huaxin trust·xinyuan no. 5 collective fund trust still had 1.5493 ​​billion yuan of principal and expected income not paid;the total amount of the two exceeds 4.6 billion yuan。

many employees were anxious. where did the billions of funds go? it was reported that xinhu group cooperated with others to open a mine in xinjiang, but ended up in a dispute over equity, so the funds were tight.

an employee introduced that the two products mentioned above have little difference in annualized yield. the subscription threshold of the former is 1 million yuan, and a contract must be signed through the group labor union; the subscription threshold of the latter is 3 million yuan, and social personnel can also participate. "the product has been promoted as 'employee welfare' within our company for more than ten years. some young employees who cannot afford millions of dollars will choose to put the money in the name of old employees, and some employees put the money of relatives and friends in it." the employee introduced.

according to china newsweek, "i have kept my money there for more than a decade. it was very safe. i didn't expect that i would not be able to withdraw the money now."xinhu zhongbaochen yu (pseudonym), an old employee of xinhu zhongbao, has worked for xinhu group for more than 20 years. she told china news weekly that since 2012, xinhu-affiliated companies 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 one-year, two-year, and three-year yields for investors are 10%, 11%, and 12%, respectively, with occasional fluctuations later. this model has been running for 12 years, but it was completely shut down in 2024.

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."

after reading the two contracts provided by investors, liao hekai, an analyst at jinle function trust, told reporters that the above-mentioned trusts issued by xinhu group only for employees include 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 the channel business are: generally for compliance considerations, it is initiated and established in accordance with the wishes of the client.the trust company does not need to assume the obligation of active management, and can only manage and distribute the trust property according to the instructions of the client."as long as the trust company performs its obligations in full accordance with the contract, it has no additional liability, and xinhu group needs to bear all subsequent responsibilities," liao hekai pointed out.

according to yicai global, after the employees handed over the funds to the union and huaxin trust, the money flowed into xinhu group and xinhu holdings through loans or investments.in essence, it forms a debt claim of employees against the group."we give money to the union, the union gives money to huaxin, huaxin gives money to xinhu, and we are employees of xinhu. this is the relationship."

xinhu group also confirmed the investors’ claims in its letter to the trade union. the rights protection employees learned from the trade union that there were more than 1,000 investors involved in the two trust products. according to the representative of xinhu employee investors,on the eve of the trust liquidation, xinhu group is still calling on employees to subscribe"the product terms are 12 months and 24 months respectively, and the expected yields are 9%/year and 10%/year respectively", "the deadline for new subscription payments is june 6, 2024".

huang wei responded: there is no relief plan yet

he once surpassed zong qinghou to become the richest man in zhejiang

public information shows that xinhu group is a well-known large private enterprise in zhejiang. it was established in 1994 and its corporate credit rating has been rated aaa for ten consecutive years.

founder 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, entered the financial industry, and got involved in many fields such as finance, mining, and technology, and built the "xinhu group" with his own xinhu zhongbao (600208.sh),xiangcai shares(600095.sh) two listed companies, successively participated in and controlled xinhu futures, xiangcai securities,shengjing bank、china citic bank, wenzhou bank,sunshine insurance, singapore asia pacific exchange and many other financial institutions.

tianyancha data shows that huang wei currently owns more than 57% of xinhu group's shares, while his wife li ping owns 24.71%.

in 2009, huang wei and his wife li ping ranked fifth on the hurun rich list with a net worth of 30 billion yuan, ahead of wang jianlin.and surpassed zong qinghou to become the richest man in zhejiang。

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.

even so, in the "2023 hurun rich list",huang wei and li ping still rank 290th with a net worth of 18.5 billion yuan。

however, the xinhu group has gradually begun to lose control of its listed companies. on august 22, the listed company xinhu zhongbao co., ltd. was officially renamed quzhou xin'an development co., ltd., and the relevant industrial and commercial registration procedures have been completed, and quzhou state-owned assets has officially "taken over".

according to yicai, on july 5, the rights protection investor called huang wei. the investor said that huang wei was usually very philanthropic and asked if he could come forward to give the employees an answer. huang wei said that he was in talks with the provincial government and financial institutions and that there was no point in being anxious. on august 15, yicai contacted huang wei, chairman of xinhu group, and he confirmed to the reporter thatit is indeed because of the xinjiang yihua mining dispute that the funds are tight"the more than 6 billion yuan in cash and 20 billion yuan in assets i invested were all 'robbed' in early june," huang wei told reporters.there is currently no solution for overdue trusts, and we need to wait for the dispute to be resolved.。

according to yinshi finance, on august 9, huang wei responded to the repayment issue, "only when we get the mine back can we have a safe place to live. if we don't, i might go bankrupt.", but xinhu group did not respond to employees' demands for disclosure of the company's and huang wei's assets.

are xinhu group’s 20 billion yuan worth of shares “wasted”?

so, what exactly is the xinjiang yilihua mining dispute that huang wei mentioned?

according to the shanghai securities news, in june 2024, the hanjiang intermediate people's court of hubei province made a criminal ruling, upholding the tianmen court's judgment that huayi loncin company was guilty of corporate bribery and exempted from criminal punishment.recover all the shares and interests held by huayi loncin in xinjiang yikuang company and return them to the state-owned assets supervision and administration commission of yichang municipal people's government。

huayi loncin is a subsidiary of xinhu group. in 2010, xinhu group acquired 100% of the shares of huayi loncin held by 7 natural person shareholders including hu mou, thereby acquiring 50% of the shares of xinjiang yikuang company. later, due to capital increase and share expansion, huayi loncin's shareholding ratio was diluted to about 41%. "the above judgment is a 'sudden disaster' for xinhu group, a third party with good intentions, which spent money to legally acquire the shares of xinjiang yikuang company and continued to invest huge sums of money and painstakingly operate it for 14 years." xinhu group management said that the company has filed a complaint with the hubei court.

xinhu group said that when it acquired xinjiang yikuang company, the company only had prospecting rights and was in a loss-making state.for 14 years, xinhu group has dominated the company's operations. the chairman, financial director and other core executives were all sent by xinhu, which invested a lot of manpower, material and financial resources.xinjiang yikuang company has developed into an extra-large open-pit coal mine with an annual mining target of 40 million tons, ranking among the top ten in the country.

tianyancha shows that on august 26, xinjiang yikuang company underwent a number of changes. huayi loncin's shares have been transferred to yichang state-owned assets supervision and administration commission, and the chairman, financial director and other former "xinhu system" senior executives have been replaced. "i was replaced without any warning." zhong sheng, former chairman of xinjiang yikuang company, said that through the efforts of shareholders and management, xinjiang yikuang turned a profit in 2017. in recent years, benefiting from the high prosperity of the industry, its performance has been rising year by year, and its net profit has been stable at more than 2 billion yuan in recent years.according to market valuation, xinhu’s equity is worth about 20 billion yuan.”。

the materials show that in february 2018, the huangshi municipal supervisory committee of hubei province, according to the designation of its superiors, opened an investigation into the suspected serious violations of the laws by hu, a former shareholder of huayi loncin. at that time, no investigation was opened into the corporate crime of huayi loncin. later, hu was transferred to the procuratorate for review and prosecution on suspicion of bribery. xinhu said that during the procuratorate's review and prosecution, no investigation was opened into huayi loncin. however, in march 2019, the tianmen municipal procuratorate directly prosecuted huayi loncin for corporate bribery to the tianmen court.

in october 2022, the tianmen court made the original first-instance judgment, ruling that huayi loncin company "committed the crime of corporate bribery and was exempted from criminal punishment" and "the illegal proceeds of bribery by the defendant beijing huayi loncin trading co., ltd. and all equity and interest held in xinjiang yihua mining co., ltd. shall be recovered and returned to the state-owned assets supervision and administration commission of the people's government of yichang city". in january 2023, huayi loncin appealed against the original first-instance judgment. in august 2023, the tianmen court made a new judgment, and the judgment involving huayi loncin was the same as the original first-instance judgment. on june 11, 2024, huayi loncin signed and received the second-instance criminal ruling, and the judgment came into effect. on the same day, the tianmen court filed a case for the execution of the criminal judgment.

yang ruohan, a lawyer at beijing daoxin law firm, commented:hu's bribery was purely personal。the equity involved in the case is not illegal income, and it cannot be illegal income in principle of company law. even if it is illegal income, today's equity is no longer the original equity when xinjiang yikuang company was established in september 2006.at the same time, all the illegal benefits of the equity were realized by the original shareholders through the equity transfer funds in june 2010, that is, the illegal form has been converted from equity to money. even if the people's court recovers the funds, it should recover the funds illegally obtained by the former shareholders and others. "

yang ruohan believes that xinhu group did not commit any fault in the process of purchasing the equity involved in the case, paid a reasonable price, and acquired the actual ownership of the equity involved in good faith, which is fully in compliance with the provisions of article 311 of the civil code on good faith acquisition.

at present, the dispute has not yet come to an end.

editor|duan lian du hengfeng

proofreading|wang yuelong

cover image: visual china (image and text are unrelated)

daily economic news is compiled from china newsweek, china business news, shanghai securities news, yinshi finance, public information, etc.