China Zhongwang announced that the performance of its subsidiary has been thunderous, and its controlled Junkang Life Insurance may have been affected, and the 2020 annual report has not been disclosed until today
"China Science and Technology Investment" Long Qiuyue
A few days ago, Junkang Life Insurance Co., Ltd. (hereinafter referred to as "Junkang Life") issued an announcement saying, "Due to the actual situation of the company, the disclosure of the 2020 Annual Information Disclosure Report has been postponed, and the disclosure time is expected to be no later than October 31, 2021." "As of now, Junkang Life's solvency reports for three consecutive quarters since the fourth quarter of 2020 and the 2020 annual report have not been disclosed in a timely manner.
In addition, China Zhongwang (01333.hk) recently issued an announcement that the performance of subsidiaries Liaoning Zhongwang Refined Aluminum Co., Ltd. and Liaoning Zhongwang Group has thundered. At the same time, China Zhongwang has not disclosed its 2021 semi-annual report and has been suspended since August 30 this year.
It is reported that China Zhongwang holds shares in Junkang Life through its wholly-owned holding company Ningbo Yinzhou Hongfa Industrial Co., Ltd., and is actually the largest shareholder of Junkang Life. It is worth noting that at the end of 2020, Junkang Life was exposed to the fact that nearly 100 billion insurance funds were occupied by China Zhongwang, and the actual solvency was worrying.
Annual report of difficult labor
Mr. Li, a user who insured Junkang Life, told The China Science and Technology Investment reporter that "Junkang Life has not published a solvency report for three consecutive quarters, and the 2020 annual report has been repeatedly delayed, which seriously damages the interests of consumers." If my contract expires or an accident occurs, I doubt whether Junkang Life has the ability to perform its contractual obligations. ”
*The insurance contract signed by Mr. Li and Junkang Life, pictured by the interviewee
The reporter checked the information disclosure on the company's official website and found that the latest annual report of Junkang Life was the "2019 Annual Information Disclosure Report". Since the beginning of this year, Junkang Life has repeatedly postponed the release of the 2020 Annual Information Disclosure Report, and issued 6 extension announcements to this end.
According to the interim regulations on enterprise information publicity, the Interim Measures for the Administration of abnormal enterprise operation directories and other information disclosure requirements, each market entity should report an annual report from January 1 to June 30 every year. Failure of an enterprise to fill in the annual report on time as required will affect the credit of the enterprise and its legal representative and will be included in the list of abnormal operations.
In addition, since the fourth quarter of 2020, Junkang Life has not published the Solvency Quarterly Report on time, and has not disclosed solvency information to shareholders and the public for three consecutive quarters. According to the Solvency Regulation Rules for Insurance Companies No. 13, unlisted insurance companies should disclose a summary of their solvency reports within 30 days of the end of each quarter. If solvency information cannot be publicly disclosed on time, the reasons for the failure to disclose on time and the expected time of disclosure shall be announced on the homepage of the company's official website before the prescribed public disclosure period, and the delay in disclosure shall not exceed 15 days.
Li Guoping, a professor of finance at the Central University of Finance and Economics, told The China Science and Technology Investment that according to the solvency management regulations of insurance companies, insurance companies should disclose solvency information every quarter, and violations will affect the rating of insurance companies, and the regulatory authorities will punish them according to the insurance law. The delay in releasing the report could also raise concerns about the solvency of the insurer.
Mr. Li, an insured user, also told reporters, "Since May this year, Junkang Life has issued an announcement of postponing the release of the 2020 annual report once a month. "It no longer trusts Junkang Life, an insurance company, and contacted the official customer service to ask Junkang Life to terminate the contract with it in advance." Junkang Life customer service replied that it needs to report to the company and then give it a reply.
At present, Mr. Li has filed a lawsuit against Junkang Life to the court, but the court sent a summons according to the address published on the company's business license, which was unsuccessful, and the court informed Mr. Li that the address on the business license of Junkang Life had been emptied. In addition, the registered address on the business license of Junkang Life is No. 9 HuayingYuan, Shunyi District, Beijing, while the address published on the official website is Building 1, District 4, Wangjing Jingdong Park, Chaoyang District, Beijing.
However, Junkang Life is still operating normally. The reporter called Junkang Life customer service to learn that the annuity insurance, whole life insurance and other products displayed on junkang life's official website and WeChat public platform can still be purchased normally. An insurance industry insider revealed to the "China Science and Technology Investment" reporter that at present, Junkang Life's insurance products are still in the ranks of its company's agent sales products.
Related party transactions drag down performance?
The actual operating conditions of Junkang Life have also caused market concerns. Judging from the corporate sources of Junkang Life's overseas investment, many of them are affiliated enterprises of China Zhongwang. In addition, Junkang Life is suspected of investing a large amount of funds in the affiliated enterprises of shareholder China Zhongwang through equity investment.
In March 2019, Junkang Life made an investment of RMB4.547 billion in Beijing Zhongyan Real Estate Development Co., Ltd. (hereinafter referred to as "Beijing Zhongyan"), through which Junkang Life's shareholding in Beijing Zhongyan increased from 49% to 100%. In April of the same year, Junkang Life invested RMB4.735 billion through Beijing Zhongyan to invest in the Wangjing Commercial Office Building project in Beijing. In January 2020, Junkang Life provided another RMB 510 million shareholder loan to Beijing Zhongyan to invest in the Beijing Wangjing Commercial Building project. Since then, Beijing Zhongyan has leased Building 1, District 4, Wangjing JingdongYuan, Chaoyang District, Beijing to China Zhongwang and its subsidiaries for a two-year period with a total monthly rent of about RMB20.95 million.
However, Building 1, District 4, Wangjing Jingdong Park, Chaoyang District, Beijing, is actually the property of Zhongwang Building. According to the information on the official website of The Enterprise Investigation, the current registered place of Beijing Zhongyan is Zhongwang Building in Wangjing, Chaoyang District, Beijing, and the group belongs to Zhongwang Investment Co., Ltd. (hereinafter referred to as "Zhongwang Investment").
According to the announcement of large-scale real estate investment information disclosed on the official website of Junkang Life, the company will pay 85.909 million yuan of the company's housing rent to Beijing Zhongyan in 2021 to 2022. Previously, in October 2019, Junkang Life leased a house in the fourth district of Wangjing Jingdong Park in Beijing's Chaoyang District to Beijing Zhongyan for office space.
Junkang Life Insurance, China Zhongwang and their subsidiaries all leased to Beijing Zhongyan a house in The fourth district of Wangjing Jingdong Park in Beijing's Chaoyang District, Beijing's Wangjing Commercial Building Project, and paid rent to Beijing Zhongyan. In fact, Beijing Zhongyan is wholly owned by Junkang Life, and the largest shareholder of Junkang Life is actually China Zhongwang. The rent generated by the above-mentioned leased property is suspected of being transferred to Liu Zhongtian, the actual controller of China Zhongwang.
In April 2019, Junkang Life invested 49 million yuan and Beijing Zhongwang Investment and Development Co., Ltd. (hereinafter referred to as "Beijing Zhongwang Investment") to jointly establish JunkangDa Health Industry Management (Beijing) Co., Ltd., and Beijing Zhongwang Investment invested 51 million yuan to hold 51% of the shares. The group to which Beijing Zhongwang Investment belongs is Zhongwang Investment, and the major shareholder of Zhongwang Investment is Liaoyang Zhongwang Enterprise Management Center Partnership, and the ultimate suspected actual controller is Liu Zhongtian, the founder of China Zhongwang.
According to the information on the official website of Qichacha, in December 2019, Junkang Life invested 3.61 billion yuan to establish Shanghai Junkang Lianjie Enterprise Management Co., Ltd., and the legal representative was Zhang Di. Zhang Di has eight affiliated enterprises, of which six belong to the group of Zhongwang Investment. The legal representative of Beijing Zhongyan mentioned above is also Zhang Di.
It is worth noting that the 2019 annual report shows that Junkang Life invested in five enterprises including Luoyang Nonferrous Metals Trading Center Co., Ltd., and adjusted the company's investment profit and loss to -634 million yuan. In fact, the company's second largest shareholder is Liaoyang Zhongwang Holdings Co., Ltd., and the group is still China Zhongwang.
Recently, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Measures for the Supervision of the Conduct of Major Shareholders of Banking and Insurance Institutions (for Trial Implementation), which clearly states that it is strictly forbidden to evade the review of related party transactions by covering up related party relationships, splitting transactions, nesting transactions to lengthen the financing chain, etc., and it is strictly forbidden to illegally occupy and dispose of the funds or other rights and interests of banking and insurance institutions through borrowing, guarantees, etc.
Li Guoping told the "China Science and Technology Investment" reporter, "There are two opportunities for the leasing behavior between Junkang Life and China Zhongwang, the first time may be too high for the winning bid, and the second time for the lease fee is too low." Through related party transactions, the continuous transfer of benefits will hollow out the assets of the transporter. However, whether there is a problem of profit transmission in related party transactions needs to be examined from the perspective of the transaction price."
Li Guoping believes that the regulator can take regulatory measures against companies with related party transactions, thus affecting the company's rating; shareholders can also sue to declare the transaction invalid and return assets.
From 2017 to 2019, the net profit of Junkang Life was 254 million yuan, 176 million yuan and 84.7443 million yuan, respectively, an increase of 261.18%, -30.86% and -51.75% respectively, showing a clear downward trend. According to the solvency report data for the 1-3 quarter of 2020, the comprehensive solvency adequacy ratio of Junkang Life was 109.43%, 100.64% and 102.47% respectively. Among them, the solvency report for the third quarter of 2020 disclosed that Junkang Life had reduced its solvency adequacy ratio to less than 120%, and the company's comprehensive risk rating results for the first and second quarters of 2020 were Category C.
In response to Junkang Life's failure to disclose financial report information on time and related issues related to related party transactions, the reporter sent a letter to Junkang Life, but as of press time, there was no reply.