Lakala broke out that he was blacklisted by a number of banks, and the police took the initiative to withdraw from the credit market after being notified

This is not the first commercial bank to blacklist Lakala.

Text/ Gao Ronglian

Production/ Research Observation

According to public media reports, recently, Lacala was suspected of illegal cashing out of credit cards and was pulled into the blacklist by Huaxia Bank. It is worth mentioning that this is not the first time that Lakala has been pulled into the blacklist. So far, Lacala has been blacklisted by many commercial banks such as Huaxia Bank, Minsheng Bank, and Everbright Bank.

In addition, the "Daily Financial Report" also noted that Lacala took the initiative to apply for the cancellation of the corporate credit reporting business operation record of its subsidiary Koala Credit, which also shows that Lacala officially withdrew from the credit reporting market. Before the cancellation, Koala Credit was notified by the police for illegally providing more than 98 million inquiries and returning photos and profiting from them.

Blocked by multiple banks

On September 30, Huaxia Bank issued an announcement that the bank will no longer accumulate points for transactions accepted by some third-party payment institutions, and that "payment institutions that do not accumulate points will be updated from time to time" at the same time.

According to the top three acquirer merchant codes announced, it can be seen that the 19 institutions blocked by Huaxia Bank are: Cardyou Payment, Lakala, Huifu, Yinsheng Payment, UMF, Yisheng Payment, Haike Rongtong, Modern Finance, Suixing Payment, KaidianBao, ChinaPay Payment, Qianbao Technology, Jialian Payment, Fu Linmen, Guotong Xingyi, Herongtong, UBS Credit, Le Brush, and Changjietong.

It is worth mentioning that this is not the first commercial bank to put Lakala on the blacklist.

In June this year, China Minsheng Bank issued an announcement on the adjustment of the rules for the accumulation of credit card points. The announcement said that from August 1, 2020, the bank will adjust the credit card points accumulation rules. Some of the transactions accepted by third-party payment institutions will no longer accumulate points, and will be identified by the first three digits of the merchant number, while the payment institutions that do not accumulate points will be updated monthly, subject to the latest version published on the official website of the credit card of Minsheng Bank.

On September 2, the Credit Card Center of Everbright Bank also issued the "Announcement on Merchants Who Do Not Accumulate Points on Credit Cards of Everbright Bank", of which Lakala is listed.

In fact, commercial banks blocking these third-party payment institutions is a means of daily risk control of banks, mainly to prevent the vicious transactions of credit cards and acquirers to prevent financial risks.

Some cardholders obtain credit card points through third-party payment transactions, and use lower-rate pos machines to swipe high points and "wool" arbitrage from them.

Some third-party payment institutions use pos machines to join hands with users to withdraw cash, deliberately create false commercial transaction documents, obtain credit card points, and then use the points to exchange gifts, consumption coupons, partner airline miles, etc. to the bank credit card center, and then put these materials on the second-hand platform for resale. After Lacala was blocked, it meant that its users could no longer use this way to shave wool.

Deregistration of credit reporting subsidiaries

The Daily Earnings also noted that this year Lakala also wrote off its credit reporting service company.

Recently, the Central Bank's Business Management Department issued an announcement saying that it canceled the credit reporting business of four institutions such as Koala Credit Service Co., Ltd. (hereinafter referred to as "Kaola Credit"), of which Koala Credit and China Chengxinyuan Credit Co., Ltd. took the initiative to apply, and the remaining two did not substantively carry out credit reporting related business for more than six consecutive months.

According to the enterprise investigation information, Koala Credit was established in April 2014, which was renamed from the original "Lakala (Beijing) Credit Service Co., Ltd.", which belongs to the third-party credit assessment and credit management agency, mainly engaged in the credit status assessment business of individuals and small and micro enterprises.

In the eyes of industry insiders, it is not surprising that Lakala took the initiative to apply for the cancellation of the credit reporting business of the subsidiary enterprise.

At present, the competition in the credit reporting market is relatively fierce, the requirements for data acquisition and scene application are very high, there are only a few head enterprises, and the general enterprises are stuck in bottlenecks and it is difficult to break the situation.

According to public media reports, since 2016, more than 30 corporate credit reporting companies have cancelled their filing qualifications, and the international credit reporting giant Experian has also reported the news that it wants to withdraw from the Chinese mainland market, which shows that the credit reporting market is indeed not easy to do.

It is worth noting that in November 2019, the police in Huai'an, Jiangsu Province, reported that since March 2015, Koala Credit has illegally provided more than 98 million inquiries and returns, profited more than 38 million yuan, and relevant personnel have been taken away by the public security organs. Nearly 100 million citizens' names, ID numbers, and photographs that were illegally obtained and stored were seized and confiscated on the company's servers.

Lakala said that the company only provides label information services based on desensitization development to Koala Credit. Providing verification services to Koala Credit to verify the authenticity of its information, and not directly providing information to Users (including merchants and individuals) to Koala Credit, is not a sales act of information, and does not involve illegal use of merchants or personal information for profit and other illegal acts.

The limit dividend is controversial

Founded in 2005, Lakala has business sectors such as payment services, financial technology, and industrial funds, and is one of the first third-party payment enterprises in China to obtain a license from the central bank.

The "Daily Earnings" noted that in the first three quarters of this year, Lacala's performance was quite eye-catching. In the first three quarters of 2020, La Cala's revenue was 4.168 billion yuan, an increase of 12.94% year-on-year; in the same period, the net profit was 735 million yuan, an increase of 19.35% year-on-year, and the net profit growth rate was much higher than the revenue growth rate.

However, behind the growth of net profit, Lacala's hidden worries are gradually emerging. The financial report disclosed that la Cala cash and its equivalents fell sharply by 1.586 billion yuan in the first half of the year, compared with 2.499 billion yuan in the first three quarters of 2019, a decrease of 36.53%.

It is worth mentioning that the extreme dividends of la Cala's local tycoons.

In April 2020, Lacala released its annual report disclosing that based on the company's total share capital of more than 400 million shares as of December 31, 2019, a cash dividend of RMB20 was distributed to all shareholders for every 10 shares, with a total cash dividend of more than RMB800 million. In 2019, the company's non-net profit was only 793 million yuan. The dividend ratio is also surprising. According to Lacala's annual report, the dividend amount of 800 million yuan accounted for 99.22% of its net profit attributable to the mother, which can be said to be a "clearance" dividend.

The biggest winner of this dividend is Legend Holdings. According to the information of the enterprise investigation, Legend Holdings holds 113 million shares in Lacala, with a shareholding ratio of 28.24%, and is the largest shareholder of Lacala. According to the shareholding ratio, the dividend Legend Holdings will earn 226 million yuan.

Is the company making such a large dividend a disguised blood transfusion to the major shareholder? After being blocked by Huaxia Bank, what kind of reform will the company carry out? The Daily Earnings Report will continue to follow.