Special topic: the CSRC files a case against Ruifengda and is suspected of a number of violations.

Source Beijing Business Daily

Reporter Liu Yuyang and Hao Yan

The event of "running away" of private equity real controllers continues to ferment. May 13thBet365baccaratA number of new third-board stocks invested by Ruifengda announced the suspension of trading, and some institutions said that the company has conducted a preliminary verification of the relevant public opinion on the negative news of shareholders' Ruifengda related private equity funds, combined with the substantial changes in the stock price in the previous period. The company intends to check the above matters. On May 11, the China Securities Regulatory Commission also stepped in to open a case investigation. Specifically, Ruifengda equity changes frequently, related institutions have long been "running away" trend, in addition, behind the performance "false high", there is the possibility of "transfer" through the new three-board stocks. Some people in the industry said that for investors, the above incident once again reminds investors to be extra cautious when choosing investment products and managers. In addition to paying attention to the performance of private equity, they also need to carefully analyze their investment targets and penetrate the underlying assets to guard against risks.

Supervision and filing of cases and self-investigation of enterprises

The event of private equity real controller "running away" is fermenting. On May 13, Ruifengda announced the suspension of trading in a number of new third-board stocks, and some institutions said that they had conducted a preliminary verification of the relevant public opinion and would carry out verification in combination with the substantial changes in share prices in the previous period. In addition, on May 11, the China Securities Regulatory Commission also released news that, judging from the current situation, Ruifengda was suspected of a number of violations, and the China Securities Regulatory Commission decided to file a case for investigation and deal with it strictly in accordance with the law.

The voice of the CSRC stems from a recent market rumor. Prior to this, some media said that Ruifengda is currently unable to redeem and the company's actual controllers have been lost. Ruifengda, a company involved, was established in October 2016 with a registered capital of 30 million yuan and is controlled by Qiu Wenlong, according to the China Foundation Association. In terms of the proportion of investors, Qiu Wenlong accounted for 80%, and Liu Licheng, the legal representative and general manager, accounted for 20%. As general manager, Liu Licheng worked as a risk control manager in Jiangsu Fuxin Wealth Asset Management Co., Ltd. Jiangsu Fuxin Wealth Asset Management Co., Ltd. was notified by the police in 2020 on suspicion of illegally taking public deposits, according to public information.

However, according to Tianyan check information, Ruifengda's stake has been changed many times. In January 2022, Qiu Wenlong and Liu Licheng withdrew, with a shareholding ratio of 80% and 20% respectively. In January 2022, Li Tao held shares for the first time, but the proportion of the shares was not disclosed.

In September of the same year, the person in charge of Ruifengda was officially changed from Liu Licheng to Li Tao, and Li Tao withdrew his investment on the same day. Up to now, the controlling shareholder of Ruifengda is Hainan Wisdom City holding Group Co., Ltd., with a shareholding ratio of 51%. Shanghai Qingcheng Culture Club Co., Ltd. has increased its stake by 49% since September 2022.

With regard to the current handling situation and the latest progress, a reporter from Beijing Commercial Daily called and sent an article to interview Ruifengda, but there was no reply as of the press release.

In addition to frequent equity changes, Ruifengda affiliated institutions are also full of doubts. Some media said that at present, in addition to the filing of Ruifengda, another institution, Riwin Investment holding Group Co., Ltd. (hereinafter referred to as "Nippon Investment"), has also been banned from its office.

Earlier, a reporter from Beijing Business Daily telephoned Ruifengda and found that the relevant number was shown as "Riwin Group". According to Tianyan data, Ruifengda shares contact numbers with 75 companies, including a number of "Japanese win" companies. Tianyan survey shows that the daily win investment associated with Ruifengda was established in June 2012 with a registered capital of 2.Bet365baccarat28 billion yuan, owned by Xiwei (Xiamen) Electronic Technology Co., Ltd., and Shanghai Riwin Equity Investment Fund Co., Ltd., with shares of 91.2% and 8.8%, respectively.

From the perspective of the change in the shareholder structure of the Japanese win investment, in fact, the controller's "running away" may also have early signs. In August 2023, the legal representative of Japan win Investment was changed from Li Min to Sun Wei. In March 2024, the legal representative was changed from Sun Wei to Chen Zhili. It is worth noting that in April 2024, one month before the "runaway" rumors broke out, the legal representative of Japan-win Investment changed again to Liu Xiao. At the same time, Sun Wei, Li Min, Shanghai Lingya Enterprise Management Center (limited partnership) and Shanghai Luofu Enterprise Management Center (limited partnership) all withdrew from investors.

Jiang Han, a senior researcher at the Pangu think tank, pointed out that generally speaking, the repeated changes of the company's legal representative and the withdrawal of many investors on the same day are usually a sign of unstable operation and major changes within the company. it may be due to the differences between the management of the company on the future development direction of the company, problems in the capital chain, increased risk of legal proceedings, and many other reasons.

Or use the "new third board" to get funds.

Focusing on Ruifengda's related business, CICC data show that its business types include private equity investment funds and private equity investment FOF funds, with a management scale of 2 billion-5 billion yuan. On its official website, the China Foundation Association also suggested that Ruifengda had problems, including cases where the place of registration and office were not in the same jurisdiction, the overdue outstanding fund, and the ratio of opening inquiry accounts for investors was less than 50%.

According to private placement network data, Ruifengda in the management of a large scale, but the number of employees is not large. At present, Ruifengda is in charge of 70 products, but the only fund managers announced are Zhang Riyang and Sun Haoxiang. In addition, according to CICC data, the company has only 12 employees.

The past performance disclosed by the platform shows that Ruifengda's products have reaped a "considerable" return. By May 2024, the cumulative rate of return had reached 87.65%, and the annualized rate of return had reached 10.17%. Specifically, Ruifengda Shirui No. 1 and Ruifengda Ruixing No. 3 were established in April 2022 and February 2022 respectively, with returns of 795.43% and 124.65% since their establishment. In terms of year-to-date returns, Ruifengda Shirui 1 and Ruifengda Jinxiu 7 both have returns of more than 10%, which are 15.65% and 13.85% respectively. Over the same period, however, Ruifengda Ruixing II yielded a return of-9.92%.

Jianghan commented that Ruifengda's private placement performance is indeed more outstanding, the sudden explosion of "running away" may be illegal behavior, such as illegal fund-raising, misappropriation of customer funds, and so on.

When a reporter from the Beijing Business Daily inquired about public information, he found that most of the private equity funds under Ruifengda went to the new third board stocks. According to flush iFinD data, according to the 2023 annual report, Ruifengda's products appear on the list of the top ten tradable shareholders of six new third board stocks, namely, Bang Ke Le, and Jiatianjian, Farmer Technology, Weifu Ji, Youlian Shengye and Haotian Energy Storage.

Take Farmer Technology as an example, the 2023 annual report shows that among the new shareholders of Farmer Technology, the third, sixth, seventh and ninth shareholders belong to the private equity products of Jiangsu Ruizhu Private Equity Fund Management Co., Ltd. The fourth, fifth, eighth and tenth shareholders belong to the private equity products of Zhejiang Ruifengda Asset Management Co., Ltd.

Compared with the semi-annual report, Gu Chenglong, Chen Wenxin, Li Sujian, Liu Hongyun and other 8 investors have significantly reduced their holdings. This also means that with the entry of private equity, a number of investors have withdrawn. It is worth mentioning that the investors who withdrew in the second half of the year with Jiatianjian are almost the same as Farmer Technology. Chen Wenxin, Li Sujian, Liu Hongyun and others are no longer among the top 10 shareholders in the 2023 annual report. At the same time, a number of Ruifengda's products have been greatly increased.

On May 13, a reporter from the Beijing Business Daily noted that a number of new third-board stocks invested by Ruifengda announced the suspension of trading. For example, Farmer Technology said that trading has been suspended since May 13 and is expected to resume trading before May 27. Its concern about the negative news of private equity funds related to shareholders Ruifengda has been preliminarily verified. The controlling shareholder, the actual controller and Dong Jiangao have not bought or sold company shares, have not manipulated other people's accounts to buy or sell company shares, and have nothing to do with the investors involved in the transaction. In addition, combined with the substantial changes in the company's stock price in the previous period, the company intends to verify the above-mentioned matters.

Some brokerage practitioners pointed out that private placement can falsely increase the scale of management through the mutual investment of products between private placement. Many of Ruifengda's products should be leveraged over the counter. Ruifengda's underlying assets are invested in the new third board, and the above-mentioned operation of capturing funds is possible, as long as the invested enterprises cooperate.

Jianghan also said bluntly that Ruifengda's products appeared in the list of the top ten tradable shareholders of a number of new third-board stocks, and there was indeed the possibility of "withdrawing and transferring" investors' funds through trading illiquid new third-board stocks. The risk of this kind of behavior is that if the new third board stocks are illiquid, it may be difficult for institutions to cash out the shares in a short period of time, which may lead to the capital being tied up.

Qu Fang, an investment consultant at Wanlian Securities, also believes that Ruifengda capital arbitrage is obviously an illegal act of manipulating stock prices. Investors need to be reminded that private equity funds may deliberately enhance capital brand products through insider trading in order to meet more financing needs. But there is no doubt that the ultimate goal is to defraud investors, resulting in greater losses for investors.

It is difficult for the custodian to pursue the responsibility.

Public information shows that Ruifengda's product custodian includes a number of well-known securities firms, specifically, including China Merchants Securities, CITIC Securities, Huatai Securities, China Galaxy Securities and Guotai Junan Securities.

The aforementioned brokerage practitioners pointed out that, generally speaking, the custodian will complete the trusteeship according to the trading orders given by the private fundraiser, and if there are violations such as insider trading, arbitrage and transfer, by checking public information, the custodian is unlikely to find anomalies. At present, some custodian securities firms have reflected the situation with their customers in private and sent people to the scene to follow up.

So, should the custodian be held responsible for the "run away" of private equity? Wang Deyi, a lawyer at Beijing Xunzhen Law firm, pointed out that the above situation needs judicial intervention to find out the facts. In the past judicial practice, when defining the legal liability of the fund custodian to the investors, the people's court usually determines the liability directly according to the relevant legal provisions and contractual agreements. Judging from the existing judicial cases, when the fund custodian does not violate the contract, he usually does not bear legal liability for the loss of investors. If investors want to investigate the responsibility of the custodian securities firm, they must come up with a direct contract basis. As a rule of thumb, brokers usually set exemptions in pre-drawn standard terms. Therefore, from a civil point of view, it is difficult for investors to be held accountable to custodian brokers for their losses.

On the issue of whether the asset management of securities firms should invest in Ruifengda's private equity products, a reporter from Beijing Business Daily interviewed a number of securities firms, and some of them said that their asset management agencies had conducted self-examination and did not invest in Ruifengda's products.

A private placement with a formal record, a clear net worth disclosure and a number of custodian guarantees suddenly "ran away", which sounded the alarm for the industry and investors. Qu Fang believes that this reminds investors that in addition to paying attention to the performance of private equity, they also need to carefully analyze the real situation of their investment targets and penetrate the underlying assets to guard against risks.

Yang Haiping, a researcher at the Securities and Futures Research Institute of the Central University of Finance and Economics, pointed out that the Ruifengda incident was a huge blow to the confidence of private equity fund investors. If you invest in institutions with poor net worth, you may be caught in a "pig killing plate"; if you invest in institutions with a particularly good net worth performance, you may fall into a "minefield".

Yang Haiping suggested that potential investors in private equity investment funds should first carefully select fund managers, focusing on the head institutions with sound internal control system and long-term operation. Secondly, we should be vigilant against all kinds of routines that are not in line with common sense and logic, such as investing large-scale funds in the new third board equity, or even sitting on the new third board, and so on. Ruifengda "run away" also once again reminded the regulatory authorities that the supervision of private equity investment funds still needs to be strengthened, with the focus on the need to strengthen the supervision of the accounting and disclosure of the net value of private equity funds. the corresponding trusteeship management system also needs to be optimized.