The "running away" incident of the actual controller of the private equity continues to ferment. On May 13, Ruifengda invested in a number of new three board stocks announced the suspension of trading, some institutions said that the company has conducted a preliminary verification of the negative news of the negative news of the shareholder Ruifengda's related private equity funds, combined with the sharp changes in the stock price in the early stage, the company intends to carry out verification of the above matters. On May 11, the China Securities Regulatory Commission also opened an investigation. Specifically, Ruifengda's equity changes are frequent, and the actual controllers of affiliated institutions have already "run away", in addition, behind the "inflated performance", there is the possibility of "arbitrage transfer" through the new third board stocks. Some industry insiders said that for investors, the above events once again remind investors to be extra cautious when choosing investment products and managers, in addition to paying attention to the performance of private placements, they also need to carefully analyze their investment targets and penetrate the underlying assets to prevent risks.
Regulatory filing, enterprise self-inspection
The private equity actual controller "ran away" incident is fermenting. On May 13, Ruifengda invested in a number of new three board stocks announced the suspension of trading, some institutions said that they have conducted a preliminary verification of relevant public opinion, and will carry out verification in combination with the sharp changes in stock prices in the previous period. In addition, on May 11, the China Securities Regulatory Commission also announced that from the current situation, Ruifengda is suspected of a number of violations of laws and regulations, and the China Securities Regulatory Commission decided to investigate it and deal with it strictly in accordance with the law.
The CSRC's voice stemmed from a recent market rumor. Previously, some media said that Ruifengda cannot be redeemed at present, and the company's actual controllers have lost contact. According to the data of the AMAC, Ruifengda, the institution involved, was established in October 2016 with a registered capital of 30 million yuan, and the actual controller is Qiu Wenlong. In terms of the proportion of investors subscribed, Qiu Wenlong accounted for 80%, and Liu Licheng, the legal representative and general manager, accounted for 20%. As the general manager, Liu Licheng worked as a risk control manager at Jiangsu Fuxin Wealth Asset Management Co., Ltd. According to public information, Jiangsu Fuxin Wealth Asset Management Co., Ltd. was notified by the police in 2020 on suspicion of illegally absorbing public deposits.
However, according to Tianyancha information, Ruifengda's equity has changed many times, and in January 2022, Qiu Wenlong and Liu Licheng have withdrawn, and the shareholding ratios at the time of withdrawal are 80% and 20% respectively. In January 2022, Li Tao held shares for the first time, but the shareholding ratio was not announced.
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 from the capital contribution on the same day. Up to now, the controlling shareholder of Ruifengda is Hainan Smart City Holding Group Co., Ltd., with a shareholding ratio of 51%, and Shanghai Qingcheng Culture Club Co., Ltd. has increased its shareholding by 49% since September 2022.
Regarding the current handling situation and the latest progress, a reporter from Beijing Business Daily called and posted an interview with Ruifengda, but did not receive a reply as of press time.
In addition to the frequent changes in equity, Ruifengda's affiliates are also full of suspicions. Some media said that at present, in addition to Ruifengda's case, the office of another institution, Riying Investment Holding Group Co., Ltd. (hereinafter referred to as "Riying Investment"), has also been banned from entering.
Previously, a reporter from Beijing Business Daily called Ruifengda and found that the relevant number was displayed as "Riying Group". According to Tianyancha data, Ruifengda shares contact numbers with 75 companies, including a number of "Riying" companies. Tianyancha shows that Riying Investment, which is related to Ruifengda, was established in June 2012 with a registered capital of 228 million yuan, and is held by Xiwei (Xiamen) Electronic Technology Co., Ltd. and Shanghai Riying Equity Investment Fund Co., Ltd., which hold 91.2% and 8.8% of the shares respectively.
Judging from the change in the shareholder structure of Riying Investment, the "running away" of the actual controller may also have early signs. In August 2023, the legal representative of Riying Investment will be changed from Li Min to Sun Wei. In March 2024, the legal representative will be changed from Sun Wei to Chen Zhili. It is worth noting that in April 2024, one month before the outbreak of the "runaway" rumors, the legal representative of Riying Investment will change again and change 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 the investors.
Jiang Han, a senior researcher at Pangu Think Tank, pointed out that generally speaking, the company's legal representative has changed many times and multiple investors have withdrawn on the same day, which is usually a signal of unstable operation and major internal changes in the company, which may stem from many reasons such as the company's management's disagreement on the company's future development direction, problems in the capital chain, and increased risk of legal proceedings.
Or use the "New Third Board" to arbitrage funds
Focusing on Ruifengda's related business, AMAC data shows that its business types include private securities investment funds and private securities investment FOF funds, with a management scale of 2 billion to 5 billion yuan. In the official website, AMAC also reminded Ruifengda that there are problems, including the fact that the registered place and the office are not in the same jurisdiction, the overdue unliquidated fund, and the ratio of opening inquiry accounts for investors is less than 50%.
According to the data of the private placement network, Ruifengda has a large scale under management, but the number of employees is not large. At present, Ruifengda is managing 70 products, but the current announced fund managers are only 2 Zhang Riyang and Sun Haoxiang. According to the data of the AMAC, the company has only 12 employees in total.
Judging from the past performance disclosed by the platform, Ruifengda's products have reaped "considerable" returns. As of May 2024, the cumulative rate of return has reached 87.65%, and the annualized rate of return has reached 10.17%. Specifically, Ruifengda Shirui No. 1 and Ruifengda Ruixing No. 3 were established in April 2022 and February 2022 respectively, with yields of 795.43% and 124.65% since their establishment. In terms of year-to-date yields, the yields of Ruifengda Shirui No. 1 and Ruifengda Jinxiu No. 7 both exceeded 10%, 15.65% and 13.85% respectively. However, in the same period, the yield of Ruifeng Da Ruixing II was -9.92%.
Jiang Han commented that the performance of Ruifengda's private placement is indeed outstanding, and the sudden explosion of thunder and "running away" may be due to violations, such as raising funds in violation of regulations and misappropriation of customer funds.
When a reporter from Beijing Business Daily inquired about public information, he found that more of Ruifengda's private equity funds flowed to the new third board stocks. According to Flush iFinD data, according to the 2023 annual report, Ruifengda's products appear in the list of the top ten circulating shareholders of 6 NEEQ stocks, namely Bangkele, Hejia Tianjian, Nongjiang Technology, Weifuji, Youlian Shengye and Haotian Energy Storage.
Taking Agrocarpus Technology as an example, the 2023 annual report shows that among the new shareholders of Agrosman Technology, the third, sixth, seventh, and ninth shareholders all belong to the private equity fund products of Jiangsu Ruizhu Private Equity Fund Management Co., Ltd. The fourth, fifth, eighth and tenth shareholders all belong to the private equity fund products of Zhejiang Ruifengda Asset Management Co., Ltd.
Compared with the semi-annual report, 8 investors, including Gu Chenglong, Chen Wenxin, Li Sujian, and Liu Hongyun, have all significantly reduced their holdings. This also means that with the entry of private equity, many investors have withdrawn one after another. It is worth mentioning that the investors withdrawn by Hejia Tianjian in the second half of the year are almost the same as those of Agrocarpus Technology, Chen Wenxin, Li Sujian, Liu Hongyun and others are no longer among the top ten shareholders in the 2023 annual report.
On May 13, a reporter from Beijing Business Daily paid attention to the fact that a number of NEEQ stocks invested by Ruifengda announced the suspension of trading. For example, Agrocarpus Technology said that it has been suspended since May 13 and is expected to resume trading before May 27, and it is concerned about the public opinion related to the negative news of the shareholder Ruifengda's related private equity funds, and has conducted preliminary verification, the controlling shareholder, the actual controller and the directors, supervisors and senior executives have not bought and sold the company's shares, have not manipulated other people's accounts to buy and sell the company's shares, and have no relationship with the investors involved in the transaction. In addition, combined with the significant changes in the company's stock price in the previous period, the company intends to carry out verification of the above matters.
Some securities practitioners pointed out that private placements can inflate the scale of management through mutual investment in products between private placements. Many of Ruifengda's products should have over-the-counter leverage. Ruifengda's underlying assets are invested in the New Third Board, and the above-mentioned arbitrage operations are possible to achieve, as long as the invested companies cooperate.
Jiang Han also bluntly said that Ruifengda's products appear in the list of the top ten circulating shareholders of many NEEQ stocks, and there is indeed the possibility of "arbitrage transfer" of investors' funds by trading NEEQ stocks with poor liquidity. The risk of this behavior is that if the liquidity of individual stocks on the New Third Board is poor, it may be difficult for institutions to liquidate the stocks in a short period of time, which may lead to funds being trapped.
Qu Fang, an investment consultant of Wanlian Securities, also believes that Ruifengda's capital arbitrage is obviously an illegal act of manipulating stock prices. Investors should be reminded that private equity funds may deliberately enhance their branded products through insider trading in order to meet more financing needs. But the ultimate goal is undoubtedly to defraud investors, resulting in large losses for investors.
The custodian is held accountable
According to public information, Ruifengda's product custodians include a number of well-known brokerages, specifically, including China Merchants Securities, CITIC Securities, Huatai Securities, China Galaxy Securities and Guotai Junan Securities.
The above-mentioned brokerage practitioners pointed out that, generally speaking, the custodian will complete the custody according to the transaction instructions given by the private placement party, and if there are violations such as insider trading, arbitrage and transfer in the private placement, the custodian is unlikely to find the abnormal situation by checking the public information. At present, some custodian brokerages have been privately reporting the situation to customers and sending people to the scene to follow up.
So, is the custodian responsible for the "running away" of private placement? Wang Deyi, a lawyer at Beijing Xunzhen Law Firm, pointed out that the above situation needs to be intervened by the judiciary to find out the facts. In past judicial practice, when defining the legal liability of a fund custodian to investors, the people's court usually determined the liability directly based on the relevant legal provisions and contractual agreements. Judging from the existing judicial cases, when the fund custodian does not violate the contract, it usually does not bear legal responsibility for the losses of investors. If an investor wants to hold the custodian broker accountable, he or she must come up with a direct contractual basis. As a rule of thumb, broker-dealers usually have an exemption in the pre-drafted standard clauses. Therefore, from a civil point of view, it is difficult for investors to pursue their losses against the custodian broker.
On the issue of whether the asset management of securities companies invests in Ruifengda's private placement products, a reporter from Beijing Business Daily interviewed a number of brokerages, and some brokerages said that their asset management institutions have conducted self-examination and have not invested in Ruifengda's products.
A private placement with formal filing, clear net worth disclosure and multiple 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 placements, they also need to carefully analyze the real situation of their investment targets and penetrate the underlying assets to prevent 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 is a huge blow to the confidence of private equity fund investors. Institutions that have invested in poor net worth performance may be trapped in the "pig killing market"; Investing in institutions with particularly good net worth performance may fall into a "thunderstorm".
Yang Haiping suggested that for potential investors in private securities investment funds, it is first necessary to carefully select fund managers, focusing on selecting leading institutions with sound internal control systems and long-term operations. Secondly, we must be vigilant against all kinds of routines that are not quite in line with common sense and logic, such as investing in the equity of the New Third Board with a relatively large amount of funds, or even sitting on the New Third Board. Ruifengda's "running away" also reminded the regulatory authorities once again that the supervision of private securities investment funds still needs to be strengthened, of which the focus is on the need to strengthen the supervision of the accounting and disclosure of the net value of private securities funds, and the corresponding custody management system also needs to be optimized.
Beijing Business Daily reporter Liu Yuyang Hao Yan