On May 5, the Fifth Intermediate People's Court of Chongqing Municipality ruled to declare Xinhua Trust Co., Ltd. (hereinafter referred to as "Xinhua Trust") bankrupt.
Xinhua Trust has thus become the first trust company to go bankrupt since the promulgation of the Trust Law in 2001, and the number of licensed trust institutions in the industry will be reduced to 67.
Xinhua Trust was declared bankrupt
The announcement issued by the Fifth Intermediate People's Court of Chongqing Municipality stated that Xinhua Trust could not pay off its debts when due, and its assets were insufficient to pay off all its debts, which was in line with the legal requirements for declaring bankruptcy.
Screenshot from the National Enterprise Bankruptcy Reorganization Case Information Network.
According to the announcement, Xinhua Trust was registered and established on April 1998, 4, the company type is a joint stock limited company (Sino-foreign joint venture), the registration authority Chongqing Municipal Administration for Market Regulation (formerly Chongqing Municipal Administration for Industry and Commerce), with a registered capital of 20.42 billion yuan.
According to the former CBIRC, on July 2020, 7, Xinhua Trust was taken over by the former CBIRC for triggering the takeover conditions stipulated in Article 17 of the Banking Supervision and Administration Law of the People's Republic of China and Article <> of the Measures for the Administration of Trust Companies, and the takeover period was one year.
On July 2021, 7, the former China Banking and Insurance Regulatory Commission (CBIRC) decided to extend the takeover period of Xinhua Trust for one year, from July 16, 2021 to July 7, 17. On June 2022, 7, the "Instructions of Xinhua Trust Co., Ltd. on Bankruptcy Liquidation" was approved by the former China Banking and Insurance Regulatory Commission, agreeing that Xinhua Trust would enter bankruptcy proceedings.
According to the above announcement, on July 2022, 7, the Fifth Intermediate People's Court of Chongqing Municipality ruled to accept the bankruptcy liquidation application of Xinhua Trust Co., Ltd. and appointed the liquidation team of Xinhua Trust as the administrator. On July 6 of the same year, it ruled to accept the bankruptcy liquidation application against Tianjin Xinhua Chuangfu Asset Management Co., Ltd. (hereinafter referred to as "Tianjin Chuangfu") and appointed the liquidation team of Xinhua Trust as the administrator.
On July 2022, 7, the Fifth Intermediate People's Court of Chongqing Municipality ruled to carry out substantive merger and bankruptcy liquidation of Xinhua Trust and Tianjin Chuangfu. On 15 May 2023, the administrator applied to the court to declare Xinhua Trust and Tianjin Chuangfu bankrupt.
On May 2023, 5, Xinhua Trust and Tianjin Chuangfu were declared bankrupt.
What are the warnings behind bankruptcy?
Why did Xinhua Trust go bankrupt?
In the second half of 2022, the Chongqing Banking and Insurance Regulatory Bureau issued more than <> "fines" to Xinhua Trust.
The "fine" shows that Xinhua Trust has more than ten violations of laws and regulations, including: failing to report related party transactions in advance; issuing improper incentives; Illegal industrial investment through related parties; Total risk management failure; Exceeding the authority to approve the business of related parties; Illegal approval of investments on behalf of related parties causing huge losses; False disclosure of assets through related party assets in violation of regulations; financing of prohibited or restricted areas; The "three checks" seriously failed in their duties; inaccurate asset risk classification and insufficient provision for impairment; Failure to disclose information in accordance with regulations; Illegal transfer of trust beneficiary rights; Entrusting referrals from non-financial institutions; Illegal provision of channel business for banks, etc.
The screenshot is from the former Chongqing Regulatory Bureau of the China Banking and Insurance Regulatory Commission.
"The bankruptcy of Xinhua Trust also shows that enterprises have deviations in their control of industry risks." Qing Yuqing, founder of third-party research and consulting agency Lens Research, told reporters, "Now risk control is a 'lifeline', if this line is not grasped well, it is not a problem of whether the company runs fast or not, it may be related to life and death." ”
Zeng Gang, director of the Shanghai Finance and Development Laboratory, said, "From the perspective of the trust industry, it is a process of survival of the fittest. In any industry, there will be some enterprises with poor operation and illegal operation resulting in risk losses, and such risk disposal will help the healthy development of the entire trust industry and achieve industry metabolism. (End)
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