China News Service, Beijing, March 29 (Reporter Chen Hang) The reporter learned from the Beijing No. 2 Intermediate People's Court on the 29th that from 2020 to 2023, the number of cases involving private equity fund enforcement awards accepted by the Beijing No. 2 Intermediate People's Court has generally been on the rise. A total of 144 cases were concluded, and the funds involved were all contractual private equity funds, and the fund managers were all persons subject to execution.
According to the Beijing No. 2 Intermediate People's Court, contractual private equity funds are established based on fund contracts and do not have independent civil subject qualifications. Fund properties are held by the fund manager on their behalf. When a fund manager becomes a person subject to execution due to abnormal fund operations, overdue fund products, or overdue debts of the fund manager, it often results in the fund property accounts under his name being seized or frozen by the court, which triggers related The right holder raises an objection to execution.
In litigation, it is often difficult to distinguish private equity fund custody accounts from fund managers’ own accounts for various reasons. Some fund managers’ accounts are not opened in a standardized manner, and the accounts are named with “fund name”, “fund manager-fund abbreviation”, “fund manager (note: fund name)”, etc., resulting in the actual purpose of the account being unclear; some accounts are not managed properly. According to the regulations, fund managers carry out their daily expenses and borrowings through fund accounts, regardless of public or private use; some custody accounts lack a custody agreement, or only have a written confirmation letter issued by the fund custodian, which violates the regulatory requirements for private equity funds. These situations will have an impact on the independence of the fund's assets.
The Beijing No. 2 Intermediate People's Court suggested that in order to reduce the legal risk of fund property being executed, all relevant parties should work together to safeguard their legitimate rights and interests. Fund investors should be wary of false propaganda and enhance risk awareness before investing. Private equity funds may not promise investors that their investment principal will not be lost or promise minimum returns; they may not promote in the name of the fund custodian; they may not use newspapers, radio stations, television stations, the Internet and other mass media, phone calls, text messages, instant messaging tools, emails , leaflets, or lectures, reports, analysis meetings, etc. to promote promotion to unspecified targets.
At the same time, fund investors can inquire about fund registration, manager qualifications, and whether the manager is involved in litigation through public channels such as the China Securities Investment Fund Association website to avoid investment risks and avoid blind investment. After an investor discovers that the fund account has been sealed or frozen by the court, he or she can either urge the fund manager to raise objections to the exclusion of all fund properties on behalf of all investors in accordance with the provisions of the fund investment contract, or they can individually raise objections to the entire fund account for their investment. The share portion of the property raised an objection to the exclusion of execution. (over)