The trial was straightforward: the lender found a major risk, and the 150 million yuan loan was still disbursed quickly
Hohhot Intermediate People's Court. Photo by Shuai Kecong
Minghua Holding Group Co., Ltd. (hereinafter referred to as "Minghua Company"), once ranked among the top 500 private enterprises in Inner Mongolia and one of the top 10 private enterprises in Inner Mongolia, has gradually fallen into difficulties after being suspected of being involved in a 300 million yuan "routine guarantee case", and now stands in the dock.
On May 23, at the Hohhot Intermediate People's Court (hereinafter referred to as the "Hohhot Intermediate People's Court"), a large domestic joint-stock commercial bank Hohhot Branch (hereinafter referred to as "Bank M Hohhot Branch") went to court with Minghua Company on the issue of 300 million yuan of debt guarantee liability.
The reporter of the China Times attended the court to witness the confrontation between the lawyers of the two sides in court, and the lawyer representing Bank M demanded that Minghua Company bear the guarantee liability on the basis of the Guarantee Law and relevant laws and regulations; The lawyer representing Ming Wah Company pointed out that in order to recover its own losses, Bank M still illegally lent money after knowing that the debtor had overdue loans, thereby transferring the risk to the guarantor Ming Wah Company.
Our reporter's investigation confirmed that the debtor who forged materials to defraud the bank of a huge loan in this case has been sentenced, and the bank has also been found by the judicial organ to have committed illegal lending. In 2018, Chen Mou, an account manager of Bank M Hushi Branch, was detained, after which the procuratorate decided not to prosecute; In October 2022, the Inner Mongolian police once again opened a case against Chen and others for "suspected illegal loan issuance", and the case is still under investigation.
Mutual insurance of 300 million yuan buried hidden dangers
It is reported that the cause of the case is a dispute over a financial loan contract, the plaintiff is the Hushi branch of Bank M, and there are 11 defendants, namely Gao Xiucun, Xing Chunjie and his wife, and Inner Mongolia Taisheng Industrial Group Co., Ltd. (hereinafter referred to as "Taisheng Company"), Alashan League Taiyu Smelting Co., Ltd. (a subsidiary of Taisheng Company, hereinafter referred to as "Taiyu Company"), Bayannur Shunxiang Mining Co., Ltd., and Minghua Company.
In short, Gao Xiucun borrowed hundreds of millions of yuan from the Hushi branch of Bank M with Taisheng Company and Taiyu Company, but later could not repay, and both the debtor and the guarantor were sued in court, demanding that the defendants repay the loan within the scope of responsibility.
However, because Gao Xiucun Company had gone bankrupt and he himself was sentenced for the crime of defrauding loans, the guarantor Minghua Company became the de facto main defendant in this trial. The reporter learned at the trial scene that the four lawyers sitting in the defendant's seat were all lawyers representing Minghua Company.
According to public information, Minghua Company, founded in 2005, is a comprehensive enterprise group with coal logistics as the main body and diversified development of photovoltaic power generation, science and technology agriculture, cultural industry and so on. In 2015, the company's comprehensive strength was selected as the 399th among the top 500 private enterprises in China and the 7th among the top 100 private enterprises in Inner Mongolia. Over the years since its establishment, Minghua Company has completed more than 2 billion yuan in tax revenue, driven more than 10,000 jobs, and made outstanding contributions to local economic development.
A person from Minghua Company told reporters that the company has cooperated with Bank M to carry out financial loan business since 2010, and based on the friendly cooperation and trust between the two sides, it has followed the instructions of Bank M Hushi Branch to carry out mutual guarantee loan business.
Since 2012, Minghua Company has provided mutual insurance for Inner Mongolia Taisheng Industrial Group Co., Ltd., with a mutual insurance amount of 100 million yuan. In 2013, the mutual insurance limit was adjusted to 300 million yuan, and Minghua Company assumed the guarantee responsibility for the "Comprehensive Credit Contract" signed between Taisheng Company and M Bank Hushi Branch and the loans thereunder, and signed the corresponding guarantee contract. Among them, 150 million yuan was guaranteed for Taisheng Company and 150 million yuan was guaranteed for Taiyu Company.
It was these two debt guarantees, totaling 300 million yuan, that brought great trouble to Minghua in the future. A series of information obtained by the reporter confirmed that in fact, the capital chain of Taisheng and its subsidiaries controlled by Gao Xiucun has long been fragile.
Fraudulent loan fraud and illegal lending
Taisheng Company is an enterprise mainly engaged in petroleum, coal and other fuel processing industries. According to Gao Xiucun's subsequent confession, the company has mainly relied on bank loans to survive since 2010, began to build a coking plant, a coal washing plant, acquired a series of company equity in 2010, and the project was basically completed in 2012, but the market was not good, and then it has been borrowing new loans to repay old loans, the more loans the greater the cost, and the enterprise has fallen into a loss quagmire.
From 2013 to 2014, Bank M Houshi Branch issued a number of loans totaling more than 1.1 billion yuan to Taisheng and Taiyu Company. However, the capital chain of Taisheng and Taiyu companies was still broken completely and quickly. On December 25, 2014 and January 9, 2015, the Intermediate People's Court of Alashan League ruled to accept the bankruptcy reorganization of Taiyu Company and Taisheng Company respectively, and on November 27, 2017 and July 4, 2018, respectively, it ruled to approve the draft reorganization plan of Taiyu Company and Taisheng Company and terminate the reorganization procedure.
Gao Xiucun and his company were held criminally liable. The first-instance judgment of the Ordos Intermediate People's Court found that the losses of Taisheng, Taiyu and other companies have increased year by year since 2009, and in order to meet the loan conditions, the financial data showed that the enterprises were profitable year by year and had good business prospects, and provided false statements to banks and other financial institutions and guarantee units after auditing, a total of 100 million yuan of Xinhua Trust funds were actually defrauded, and the actual loss was 70 million yuan; Bank M fraudulently obtained loans, acceptance drafts and letters of credit totaling 1,144.65 million yuan, with an actual loss of about 946 million yuan.
In July 2017, Gao Xiucun was sentenced to six years' imprisonment and fined RMB 200,000 in the first instance for the crimes of fraudulently obtaining loans, bill acceptance, and financial instruments; Taisheng and Taiyu were convicted together and sentenced to fines of 10 million yuan and 8 million yuan respectively; Several other company employees were given suspended sentences. The reporter learned at the trial scene on May 23 that Gao Xiucun appealed against the first-instance judgment, and the second instance upheld the original judgment.
Bank M was also found to have committed illegal acts in the process of granting loans. In April 2018, Chen Mou, an account manager of the Baotou branch of Bank M's energy finance division, was criminally detained by the Baotou Municipal Public Security Bureau on suspicion of illegally issuing loans, but the procuratorate later decided not to prosecute him. In a November 2019 decision not to prosecute, the Kundulun District Procuratorate in Baotou City held that Chen had committed the acts stipulated in article 186 of the Criminal Law (i.e., "granting loans in violation of state regulations"), but the facts of the crime were minor and the harm was not great.
The reporter learned from the trial scene and relevant parties that in October 2022, another guarantor Inner Mongolia Boyuan Holding Group Co., Ltd. reported to the Saihan District Bureau of the Hohhot Public Security Bureau (hereinafter referred to as the "Saihan District Public Security Bureau") that Bank M was suspected of "contract fraud" and "illegal loan issuance", and the Saihan District Public Security Bureau then opened a case against Chen and others again for investigation on the grounds of "suspected illegal loan issuance". At present, the case is still under investigation.
A strange $150 million loan replacement
During the trial, whether the bank conspired with the debtor to defraud the guarantor became a major point of debate.
It is reported that the previous decision not to prosecute made by the Kundulun District Procuratorate of Baotou City recorded a shocking detail: Bank M still lent 150 million yuan to replace a trust loan after knowing that Taisheng's capital chain was broken, the purpose of which was to prevent the overdue trust loan from eventually causing losses to the bank.
According to the decision not to prosecute, Taisheng had borrowed 150 million yuan from CCXT, with the financing disbursement date on September 18, 2013 and the maturity date on September 18, 2014. The loan was essentially an "off-balance sheet loan" granted by Bank M to Taisheng Group by purchasing the beneficiary rights of Guangdong Nanyue Bank Dongguan Branch to CCXT, and the trustee, CCXT Trust, was only in the nature of intermediate paid management and did not bear the loan risk, and the risk of the final loan was borne by the principal Bank M.
In the first half of 2014, Taisheng's operation deteriorated, and the account manager Chen went to Taisheng to conduct an on-site investigation and reported the investigation to the headquarters of Bank M, "Taisheng Group's operating conditions have further deteriorated, cash flow has dried up, raw materials, freight, wages, electricity, water and other expenses are in arrears, and daily operations are unsustainable." Therefore, the company decided to reduce or stop production in other business sectors except coal mines and iron ore mines from July 23, 2014, and more than 2,200 of the 2,600 workers in the circular industrial park were on vacation."
After understanding the situation, the headquarters of Bank M believed that the loan of Taisheng Group in CCXT was likely to be overdue, and the trust loan was a credit loan, and the failure to repay it within the time limit would eventually cause the principal Bank M to lose funds. In order to prevent the financial and creditworthiness risks caused by the overdue trust loan to Bank M, the Investment Banking Department of the Energy Department of the head office proposed to "return the loan to the balance sheet". Therefore, Bank M temporarily unfroze the frozen credit line of Taisheng Group, and issued a working capital loan of 150 million yuan to Taisheng Company on August 22, 2014, which was directly transferred to the account of CCXT under the supervision of Bank M on the same day.
According to the relevant materials obtained by this reporter, Chen Chen, the customer manager of Bank M, admitted during the investigation that when the above-mentioned 150 million yuan loan was issued, Taisheng Company had actually overdue the loan. If it is not replaced, Bank M is responsible for repaying the trust loan when it expires, and after replacing it with a working capital loan, the guarantor undertakes the repayment.
The lawyer representing Minghua Company pointed out in court that Bank M still granted loans knowing that Taisheng's operating conditions had deteriorated extremely and the loan was overdue, and obviously there was collusion and collusion to defraud the guarantor, and eventually passed its own risk to the guarantor. There is serious subjective malice in the issuance of this loan, and the guarantor should not bear any guarantee liability.
The lawyer representing Bank M Hushi Branch said that in the relevant judgment of the loan fraud case and the relevant decision not to prosecute, there was not a single word that Bank M and Taisheng Company had malicious collusion or fraud. The verdict only said that Taisheng Company had committed a criminal act unilaterally, and Bank M itself was also a victim, and there was no malicious collusion.
Regarding the inside of the case, on June 1, the reporter of the "China Times" dialed Chen's phone number recorded in relevant materials, but the person who answered the phone said that he was not Chen. The reporter then called a main person in charge of the Hushi branch of Bank M, who said that the bank has been negotiating a settlement plan with Minghua Company, and his personal feeling is still good, and there was no tough settlement before, but the plan could not be reached.
The person in charge also denied Minghua's claim that "Bank M recommended mutual insurance with Taisheng". However, he also admitted that the business was brought by Chen when he jumped from a state-owned bank where he used to work to Bank M. He also revealed that Minghua and other companies had reported this to the relevant authorities, and the bank had not been punished by the banking regulatory department.
It is worth mentioning that in September 2022, six well-known legal experts, including Sun Xianzhong, professor of the University of the Chinese Academy of Social Sciences, Cui Jianyuan, professor of Tsinghua University, Liu Junhai, professor of Chinese Min, Zhao Xudong, professor of China University of Political Science and Law, Wang Yi, professor of Chinese Minmin University, and Gao Guilin, professor of Capital University of Economics and Business, conducted research and evidence on the case in Beijing, and unanimously believed that Taisheng and its affiliates used fraudulent means to deceive Minghua Company and other guarantors to provide guarantees, and Bank M Hushi Branch constituted a knowing that Minghua Company does not assume warranty liability according to law.
This newspaper will continue to pay attention to this case.
Responsible editor: Ma Xiaochao Editor-in-chief: Xia Shencha