The risk control of Jupai Investment Group ("Jupai"), a well-known wealth management company in Shanghai, has once again been tortured. Recently, the misappropriation of funds from Jupai's private equity products has been exposed.
In June 2016, Juzhou Asset Management (Shanghai) Co., Ltd. (hereinafter referred to as "Juzhou Asset"), a subsidiary of Jupai, as the fund manager, established the "Juzhou Intelligent Manufacturing 2018 Private Equity Investment Fund", with a duration of 2 years and an extension of 1 year.
On June 20, 2016, Mr. Zhou, an investor, signed the "Juzhou Intelligent Manufacturing 2018 Private Equity Investment Fund" Fund Contract with Juzhou Assets and China Merchants Securities, investing 3 million yuan and a subscription fee of 30,000 yuan. Among them, the fund manager is Juzhou Assets, and the fund custodian is China Merchants Securities.
Three years later, when the fund was about to expire, Mr. Zhou waited for the news that "private funds were misappropriated", and the principal of 3 million yuan disappeared.
What's going on behind the scenes? Where does private placement money go?
On September 17, Jupai replied to the 21st Century Business Herald reporter: "The actual controller of the partnership invested by the intelligent manufacturing fund has been filed by the Beijing Chaoyang police for suspected contract fraud, and the public security organs are currently in the process of full investigation and recovery." Some investors have filed a lawsuit against the intelligent manufacturing fund, which is in the process of trial, and the judicial organs have not yet made a judgment. ”
<h1 class="pgc-h-arrow-right" > the fund is known to have been misappropriated when it expires</h1>
Mr. Zhou's lawyer, He Kuan, a lawyer at Shanghai Gongyuan Law Firm, said: "This private fund has raised a total of 230 million yuan. According to the provisions of Chapter 11 of the contract "Investment of the Fund", the funds are mainly invested in Guangzhou Tianhe Ming'an Wanhu Investment Partnership (Limited Partnership) (hereinafter referred to as "Ming'an Wanhu Partnership"), and mainly make equity investments in the target enterprise Saurer Intelligent Machinery Co., Ltd.
On June 29, 2016, Mr. Zhou received jupai's "Confirmation Letter of Arrival of Funds".
"Juzhou Assets' previous announcements and explanations have disclosed that Saurer Intelligent Machinery Co., Ltd. has completed a backdoor listing in September 2017, and the private equity fund invested by Mr. Zhou indirectly holds the shares of the listed company." He Kuan said.
On June 10, 2019, Juzhou Asset Management issued an announcement to investors that on May 31, 2019, Beijing SDIC Ming'an Capital Management Co., Ltd. (hereinafter referred to as "SDIC Ming'an"), the manager of Ming'an Wanhu, issued the "2019 Pre-Exit Report" to the Fund, indicating that it would receive the investment principal and income on the maturity date of July 28, 2019, and begin liquidation on the maturity date, and the liquidation time would be 2 months for settlement income and tax payment.
However, four months later, Juzhou Assets once again sent the "Interim Information Disclosure Announcement", and the originally smooth investment broke out of the problem.
According to the Interim Information Disclosure Announcement, during the fundraising and existence of the Fund, Ming An Wanhu Fund Manager SDIC Ming'an and its actual controller and legal representative Zhou Ming maliciously misappropriated the fund assets by forging transaction legal documents, bank flows for investment fund transfer, post-investment management reports, and bank web pages and videos where some funds had arrived, and disappeared on October 20, 2019.
For the above-mentioned suspected criminal acts, Juzhou Assets has reported the case to the public security organs, and the Chaoyang Branch of the Beijing Municipal Public Security Bureau issued a "Receipt of Acceptance of the Case" on October 25, 2019 on October 25, 2019, after the investigation detachment was suspected of contract fraud. As of the date of this announcement, Juzhou Assets is fully cooperating with the public security organs in investigating and collecting evidence, with a view to arresting Zhou Ming, verifying the whereabouts of the funds, and recovering the funds. Juzhou Assets said.
Mr. Zhou then sought fruitless consultations with the Ju faction. In fact, the fund investment funds have long been misappropriated by Zhou Ming, and the backdoor listing of Saurer Intelligent Machinery Co., Ltd. has nothing to do with the private equity fund invested by Mr. Zhou. If Juzhou Assets checks with Saurer Intelligence and its relevant shareholders, it can find the problems. However, for more than three years, Juzhou Assets has done almost nothing, and risk control is useless. He Kuan said.
<h1 class="pgc-h-arrow-right" > the funds raised never flowed to the investment target</h1>
According to Qixinbao, Ming'an Wanhu (Limited Partnership) has three shareholders, Juzhou Assets, Shenzhen Qianhai Zhongmingxingtai Investment Center (Limited Partnership) and SDIC Ming'an hold about 94.3%, 5.3% and 0.4% of the shares respectively.
"As a fund manager, after juzhou assets raise funds, they are transferred to the account of Ming'an Wanhu (limited partnership), and this limited partnership will invest in the equity of the listed company. However, this fund was misappropriated by Zhou Ming, the actual controller of SDIC Ming'an, at the beginning, and never invested in the equity of listed companies. He Kuan pointed out.
He Kuan believes that Juzhou Assets should bear legal responsibility for failing to manage and use the fund assets in accordance with the principles of good faith, diligence and responsibility.
He further analyzed, first of all, Juzhou Assets allowed the "double GP" model to become a "single GP" model, laying the hidden danger of accidents. The contract involved in the case stipulated that Ming'an Wanhu (Limited Partnership) should have two general partners (i.e., SDIC Ming'an and Guangzhou Huiyuan Aofeng Equity Investment Fund Management Co., Ltd.), whose purpose was to jointly manage, supervise each other and restrict each other, but in practice, there was only one general partner of SDIC Ming'an. In this process, Juzhou Assets did not raise any doubts, did not make any corrections, and did not take any preventive measures.
Secondly, Juzhou Asset Management failed to fulfill its obligation to verify the issue of nominee shareholding, and failed to correct it in accordance with the regulations and the agreement. For example, according to Juzhou Assets' explanation, although it has been found that there is no Ming An Wan Hu (Limited Partnership) in the register of shareholders of Saurer Intelligent Machinery Co., Ltd., it has not conducted any consultation and verification with the major shareholders of Saurer Intelligent Machinery Co., Ltd., which is suspected of dereliction of duty.
Finally, after the fund invested in Ming'an Wanhu (Limited Partnership), Juzhou Assets failed to fulfill its supervision and management responsibilities. As a limited partner of Ming An Wanhu (Limited Partnership), Juzhou Asset Management has the right to supervise the execution of partnership affairs by the executive partner and has the right to consult the financial information such as the accounting books of the partnership. However, it credulously believed that Zhou Ming had forged the bank flow of investment funds transfer, the post-investment management report, and the bank webpage where some funds had arrived, and failed to perform the duties of supervision and verification, and even Ming An Wanhu (Limited Partnership) itself had never filed a fund record, and Juzhou Assets had not been corrected. As a limited partner, Juzhou Asset Management failed to fulfill its responsibility to control the post-investment risk of the fund.
"The funds involved in the case were illegally misappropriated by Zhou Ming, the executive partner of Ming'an Wanhu (Limited Partnership), which is a one-sided statement of Juzhou Assets and needs to be verified by the public security organs." He Kuan thinks.
He also said that at the end of 2019, the case had been filed at the Pudong New Area People's Court and heard in court, but it was still waiting for the verdict. In addition to Mr. Zhou, other investors have also sued Jupai and Juzhou Assets respectively, and the court is expected to refer to the judgment of this case.
< h1 class="pgc-h-arrow-right" > fund manager shirk responsibilities? </h1>
"The point worth discussing in this case is that after Juzhou Assets, as the manager, invested the raised funds in the lower partnership, but the lower partnership had contract fraud, the raised funds were not invested according to the original idea, but were swept away by the person in charge of the lower partnership." He Kuan said.
He said: "The focus of the dispute is, what is the purpose of the private fund contract? Is it to raise funds to invest in the lower partnership, and the fund is established to complete the purpose of the contract? Or on this basis, according to the private fund contract and the content of previous disclosures, confirm the investment entity that the funds are finally invested in the establishment? I insist that it must be the latter. ”
Lightning incidents continue to emerge, and private equity funds urgently need to strengthen supervision.
"Once there is a problem in the lower-level investment enterprise, the fund manager responsible for raising funds shirks its responsibility and should prevent such a problem from occurring." He Kuan said.
On September 11, the China Securities Regulatory Commission (CSRC) solicited public comments on the Several Provisions on Strengthening the Supervision of Private Equity Investment Funds (Draft for Solicitation of Comments), "While the private fund industry is developing rapidly, there are also some problems, such as public or covert public fundraising, circumvention of qualified investor requirements, non-performance of registration and filing obligations, universal off-site operation, intricate group operation, capital pool operation, rigid payment, profit transmission, self-financing, etc., and even misappropriation and misappropriation of fund property, Illegal fundraising and other illegal and criminal acts that seriously infringe on the interests of investors, industry risks have gradually emerged. ”
Article 9 of the above-mentioned Draft for Comments stipulates that private fund managers and their practitioners shall not engage in 13 kinds of private fund business, including: not carrying out investment operations or disclosing information to investors in accordance with the contract; dereliction of duty and failure to perform their duties in accordance with regulatory provisions or contractual provisions.
A financial lawyer, who did not want to be named, told the 21st Century Business Herald: "As far as this case is concerned, the fund should belong to the equity investment fund. Equity investment fund is to pay the consideration to obtain equity, since invested in listed companies, check the list of shareholders of listed companies, you can see at a glance, this is the most basic requirement for fund managers, Juzhou Assets as a fund manager, did not do it, there is no due diligence or even major fault. ”
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(Responsible editor: Li Jianhua Intern: Guo Jinwen)