News on the date —

CITIC Capital (CITIC Capital Investment Co., Ltd.), together with its financial investors (Guangzhou Asset Management Co., Ltd., Shenzhen Merchants Ping An Asset Management Co., Ltd., Zhuhai Hengqin Shui Mu Tong De Equity Investment Fund Management Enterprise, and Beijing Fenghui Investment Management Co., Ltd.), is preparing to restructure Rendong Holdings.

This is indeed a mixed bag of news.

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A "cut of the leek"

Ren Dong Holdings was once known as the "Number One Strong Zhuang in the Stock Market," and its "dark history" actually refers to the history of three consecutive times of harvesting "leeks" in the stock market by taking advantage of the opportunity to restructure bad assets.

The first instance of "cutting the 'chives'" occurred during the Honglei Stock period.

Zhejiang Honglei Copper Industry Co., Ltd., established in the year (as the name suggests, the company specializes in copper products such as enameled wire and copper tubes).

In the year, Honglei Company was listed on the SME Board of the Shenzhen Stock Exchange, namely Honglei Co., Ltd.

Years after the year, when Honglei Co., Ltd. underwent asset restructuring, a series of violations came to light. From the relevant penalties imposed by the Shenzhen Stock Exchange, we can see the myriad problems of this company— In the year, approximately . billion yuan was misappropriated by related parties; in the year, approximately . billion yuan was misappropriated by related parties, and the use of . billion yuan in idle raised funds was not disclosed; from the year to the year, the company was involved in a series of major litigation cases with banks and other entities (including Mitsubishi Corporation, Bank of China, China Everbright Bank, Industrial Bank, Wenzhou Bank, Hengfeng Bank, etc.), with a cumulative amount of . billion yuan, accounting for .% of the net assets audited at the end of the year, and the company failed to fulfill its obligation to disclose interim information in a timely manner.

Meanwhile, Honglei Co., Ltd. is involved in fraudulent financial performance.

The Shenzhen Stock Exchange regulatory letter pointed out that Honglei Co., Ltd. has weak profitability in its main business, with the net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, declining year by year, resulting in a loss of . billion yuan by the year.

The historical performance of Honglei Co., Ltd. shows: in the year, the non-recurring profit after tax was . million yuan, a decrease of .% year-on-year; in the year, the non-recurring profit after tax was -. million yuan, a decrease of .% year-on-year; in the year, the non-recurring profit after tax was -. million yuan, a decrease of .% year-on-year; in the year, the non-recurring profit after tax was -. billion yuan, a decrease of .% year-on-year (net profit was . million yuan, due to government subsidies of . billion yuan).

However, the company's myriad problems do not prevent the actual controller from extricating themselves through restructuring.

The announcement in the month of the year shows that the original actual controller of Honglei Co., Ltd., Qi Jianping, and her concerted actors Qi Jianhua, Qi Jiansheng, Jin Lei transferred their shares to Tianjin Youzi Asset Management Co., Ltd. (DeYu system) and Shenzhen Jianhui Investment Co., Ltd. (Zhang Yongdong) at a price of RMB per share. The shares transferred amounted to 100 million shares, accounting for 55.27% of the total share capital.

Based on this calculation, the actual controller cashed out approximately one hundred million yuan.

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Two-tenths of "leeks"

After this reorganization, Honglei Co., Ltd. was handed over to the infamous "DeYu system."

What is the Deyu system?

Why is it notorious?

We directly quote the relevant description from the Central Commission for Discipline Inspection and the National Supervisory Commission website— "DeYu System" is the collective name for several related companies controlled by Jinzhong businessman Tian Wenjun. It is called the "DeYu System" because the earliest main company was named Detian Yu Ecological Technology (Beijing) Co., Ltd. Since then, the actual controller of the "DeYu System," Tian Wenjun, has taken advantage of the nationwide reform of rural credit cooperatives and the capital increase of urban commercial banks to deeply infiltrate the "DeYu System" related companies into Shanxi's rural credit cooperatives, rural commercial banks, and urban commercial banks through shareholding methods. The status of bank shareholders provided convenience for the "DeYu System" to illegally obtain loans from grassroots banks for investment in the capital market. To more easily extract funds from banks, the "DeYu System" massively forged official seals and various materials. Tian Wenjun even established a "technical department" dedicated to studying how to falsify documents, producing thousands of fake seals and forged documents weighing over ten tons. To evade the regulatory oversight of the China Banking Regulatory Commission on credit concentration, the "DeYu System" established numerous enterprises, with these enterprises mutually guaranteeing each other, weaving together numerous false accounting statements that met the bank's credit conditions. The "DeYu System" went to great lengths to bribe and corrupt financial institution management personnel, buying the power of bank credit approval. In the Shanxi financial system alone, there were public officials who accepted "DeYu System" assets totaling over two billion yuan, including several "top leaders." Over the years, the "DeYu System" has engaged in large-scale illegal financing through methods such as loans, asset management plans, trust plans, and bill business, and then disguised the funds through层层嵌套, investing them in the capital market and manipulating stock trading. In 2020, the "DeYu System's" long-term illegal fundraising was exposed, leading to a breakdown in its capital chain and the accumulation of significant financial risks in the local area. From financial institutions to regulatory authorities, opportunities to address risks were repeatedly missed. The "DeYu System" had illegal financing and loans totaling over two trillion yuan in several financial institutions in Shanxi, with rural credit cooperatives and urban commercial banks becoming hotspots of corruption. According to办案人员, in the process of the "DeYu System's" debt risk formation, almost every link had corrupt elements colluding with unscrupulous businessmen, affecting over 100 cities and multiple counties (cities and districts) across the province.

DeYu Group acquired Honglei Co., Ltd. with the intention of utilizing the listed company's shell. They were not interested in Honglei's traditional manufacturing businesses such as enameled wires. Therefore, they sold back Honglei's physical production assets to the Qi family and re-established a new company.

How to build it?

Announcing the acquisition of a 100% stake in Guangdong Heli Financial Technology Service Co., Ltd. for one billion yuan (approximately 10 million yuan of the acquisition balance remains unpaid as of now).

Why buy Guangdong Heli Jinkong?

Public information shows that at that time, Guangdong Heli FinTech held a Payment Business License issued by the People's Bank of China on a certain date, with business types including bank card acquiring, internet payment, and mobile phone payment, covering the entire country. Only a few companies nationwide possess all three of these business licenses nationwide.

Internet technology, Internet finance, Internet and mobile payment... Compared to the copper processing industry, it's like comparing heaven and earth.

In the month of the year, Honglei announced that the company would be renamed Minsheng Jinkong (Minsheng Jinkong Holdings Co., Ltd.), making a bold declaration: "The Year of Fintech Reinvigorates," "A Trillion-Dollar Fintech Market Awaits," and "Rising Strongly with the Momentum of Financial Innovation."

The actual profitability of Guangdong Heli Financial Technology at that time was poor (annual profit was -10 million yuan).

But that's no big deal.

After the operation of the Deyu system, the profit reached ten thousand yuan in a year, with a year-on-year growth of %.

With the trillion-level fintech megastory as support, the stock market manipulation is as steady as Mount Tai.

The company's stock price, which was at a low of . yuan on the date, was lifted to . yuan in the month, a surge of over %, and then maintained above yuan for an extended period.

According to the CSRC's penalty decision, Tian Wenjun, the actual controller of the DeYu system, manipulated the stock price of Minsheng Jinko (renamed Ren Dong Holdings in 2018) using as many as 132 securities accounts from a certain date to a certain date. During the trading days, there were transactions on 92.8% of the days, and on 3.7% of the days, the transactions exceeded 1% of the total shares. The number of reverse trading (cross-trading) days accounted for 1.7% of the actual trading days. On a certain date, the market share of buy transactions reached its highest at 14.29%. On a certain date, the market share of sell transactions reached its highest at 17.32%. During the same period, the Shenzhen Component Index fell by 13.7% and the Financial Industry Index fell by 20.43%, while the stock price of Minsheng Jinko, manipulated by Tian Wenjun, rose by 84.35%.

According to the calculation by the China Securities Regulatory Commission, Tian Wenjun manipulated the stock price of Minsheng Jinko, with a trading amount of approximately one billion yuan, but ultimately incurred a loss of approximately 0.1 billion yuan.

The result of the loss is related to the complexity of Tian Wenguo's simultaneous manipulation of domestic and foreign listed companies, but another important reason is that, at the end of the year, Longyue Industry, under the Deyu system, faced a debt black hole of one billion yuan, unable to cover it up—the capital chain broke, and the Deyu system collapsed.

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Three cuts of "leek"

The collapse of the Deyu system has had a wide-reaching impact, and urgent measures are needed for post-incident management.

So, the new protagonist makes a dazzling entrance.

This protagonist is Huo Dong (it should be noted that in the capital market, those who manipulate the market are not an individual, but a complex group. We are simply using a main character to run through the text for the sake of narrative convenience).

Huo Dong, the second generation of the "Inner Mongolia's first tycoon," whose father was involved in the industrial sector, entered the capital market and founded the Rendong Group in the year.

In their interactions with the Deyu faction and within the prevailing environment, Huo Dong clearly saw through the "profound truths" of "capital operations."

After the outbreak of the Deyu crisis, Rundong Group, Dongxu Group, Huaxun Fangzhou Group, and others joined the debt restructuring of the Deyu system.

In the year, Huo Dong took control of Minsheng Jinko and renamed Minsheng Jinko as Rendong Holdings.

Rendong operates in the field of non-performing assets, specifically through restructuring and integration to establish its "persona." This "persona" of rescuing distressed assets aligns seamlessly with the profound meaning of the name "Rendong."

For instance, Rendant Group and Zhongzhi Group jointly participated in the restructuring of the leading waste sorting company, Xiaohuanggou Technology. When Dongxu Group, Huaxun Fangzhou Group, and others, which jointly restructured the debt of the Deyuxi system, encountered financial crises, Rendant Holdings also expressed its intention to step forward.

In the year, Rende Holdings invested . billion yuan to increase its stake in Beijing Haidian Technology Financial Capital Holdings Group. By paying an annual management fee of 10 million yuan, Rende Holdings entrusted its management to the group, resulting in the actual controller of the listed company becoming the State-owned Assets Supervision and Administration Commission of Haidian District, Beijing.

The mere year of state-owned capital backing has doubled the stock price of RenDong Holdings. (In [month], Shen Peng, former chairman and general manager of Beijing Haidian Technology Financial Capital Holding Group Co., Ltd., was under disciplinary review and supervision investigation by the Haidian District Commission for Discipline Inspection and Supervision for suspected serious violations of discipline and law.)

The most important card left by the DeYu system, which RenDong must continue to play, is Guangdong Heli Financial Technology.

Due to the fact that the DeYu group had not completed all the acquisition payments, from month to month, RenDong Holdings paid approximately billion yuan to Guangdong Heli FinTech, with an agreement to settle the remaining balance in installments thereafter (which was not paid), in order to appease Guangdong Heli FinTech.

The stories of Rendong keep coming, all to reflect in the stock market.

After careful planning, Ren Dong Holdings orchestrated an astonishingly bizarre scene in the stock market, earning the nickname "Stock Market Meat Grinder."

The stock price of Rendong Holdings, which was around 10 yuan in a certain month, was lifted to a high of 100 yuan in another month several years later, only to be dumped and plummet—resulting in continuous 10-day limit-down trading, with the lowest price falling to 10 yuan in a month of the following year, nearly a 10-fold decrease.

仁东控股令人瞠目的“股市绞肉机”行情（据万得数据）

"First Financial" once made a rough estimate of the situation from the acquisition of Honglei Shares by the Deyu system to this wild plunge, believing that: The Jinghua system (one of the top ten shareholders cashed out, manipulating stock prices with individual accounts) ultimately earned about 1 billion yuan; The Jingji system (one of the top ten shareholders cashed out) netted about 1 billion yuan; The Tian Wenjun system (Deyu system) netted about 1 billion yuan; The Zhang Yongdong system (one of the top ten shareholders, transferred shares to Huo Dong) netted over 1 billion yuan; The Rendong system (Huo Dong) of Rendong Tianjin and Beijing Rendong, earned about 1 billion yuan.

What followed were warnings, regulations, and penalties from the relevant authorities.

In [Month], the China Securities Regulatory Commission confirmed fraudulent financial practices by Rendong Holdings and imposed penalties on Rendong Holdings, Chairman Huo Dong, General Manager Wang Shishan, and Deputy General Manager Huang Hao. In [Month], the Shenzhen Stock Exchange publicly reprimanded Rendong Holdings and the aforementioned senior executives.

In the month of the year, Huo Dong resigned from his positions as non-independent director and chairman of Rendong Holdings.

Huo Dong's era has come to an end.

On the financial statements, RenDong Holdings' operating profit has been in the red from year to year.

On [date], Beijing LeCheng Interactive Entertainment Technology Co., Ltd. submitted an application to the Guangzhou Intermediate People's Court for the restructuring and pre-restructuring of the company, as it deemed that Rende Holdings was unable to repay its due debts, clearly lacked the ability to repay, but had restructuring value. The application was approved by the Guangzhou Intermediate People's Court.

RenDong Holdings Restructuring.

CITIC Capital enters the game.

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CITIC Capital accepts the offer

Ren Dong Holdings has told various stories, but from beginning to end, the only real dish has been Guangdong Heli FinTech (now renamed Guangzhou Heli Technology Services Co., Ltd.). According to Ren Dong Holdings' annual report, approximately % of Ren Dong Holdings' revenue comes from Guangzhou Heli FinTech.

This dish, from the time the Niandeyu faction took control, has been frying all the way to the present.

Year!

CITIC Capital still gets the same dish.

As an investment firm, CITIC Capital will have to continue to stir-fry this dish that has already harvested three crops of "leeks."

The mid-year report data of Guangdong Heli Financial Technology (as per Enterprise Early Warning) shows: net profit - million yuan, a year-on-year increase of -%.

It seems that CITIC Capital's choice of Rendong Holdings was more out of necessity.

According to the Execution Ruling (Yue Zhi No.) issued by the Intermediate People's Court of Shenzhen, Guangdong Province, Rendant Holdings and related enterprises, as well as the actual controller, have been ordered to repay . billion yuan to China CITIC Bank Corporation Limited Shenzhen Branch. Consequently, relevant bank accounts have been frozen, and 100% equity of Guangdong Heli Financial Technology Service Co., Ltd. and 100% equity of Guangzhou Helipay Payment Technology Co., Ltd. have been frozen accordingly.

Can Rendong repay the debt owed to China CITIC Bank?

The total liabilities of R&D Holdings currently amount to approximately 1 billion yuan (Wind data), and the equity of its major shareholders (top three as of 2020, first, second, and fourth as of 2021) is frozen at 100%.

Clearing this debt is evidently challenging. In comparison, taking the initiative to revitalize it within the CITIC system can be considered a realistic option.

So, CITIC Assets taking over Rundong Holdings is destined to be a mixed bag of emotions.

There is, of course, more to come.

You can follow, the future stories, about internet payments, how will CITIC Capital continue to tell.

On Duty Editor: Ma Lin

Editor: Han Jianming

Review: Dai Shichao