Spark Trader Limited reports:
Xin Jizhao, reporter of 21st Century Business Herald in Shenzhen, reported that the default of China Merchants Bank’s daye trust product on commission is not the first trust default in the industry, but it may have the biggest impact among non-standard defaults.
On August 16, China Merchants Bank responded by selling a 500 million yuan trust fund to provide 500 million yuan of financing to Jiutong Foundation Investment Co., LTD. In order to guarantee the performance of jiutong Foundation Investment Co., LTD. ‘s payment obligations, China Fortune Provides an irrevocable joint and several liability guarantee. The trust program expired on August 16, 2021.
“It is indeed against the rules.”
On August 16, China Merchants Bank and Daye Trust respectively responded to a 500 million yuan trust product default.
CMB responded that CMB’s commission product Daye Trust – Junrui no. 15 (Jiutong Land Development) project pooled fund trust plan, the original plan expires on August 14, 2021, credit measures include China Fortune Land Development Co., Ltd. to provide joint liability guarantee. Today, daye trust announced that the product did not receive the repurchase price payable by the financing party, and the guarantor did not perform the guarantee responsibility.
China responded that China happiness since the debt crisis, in order to protect clients’ interests, China merchants, as agencies and product active management of the trust to keep high frequency communication, urging him to do a good job in risk resolve to respect the beneficiary, the beneficiary conference committee vote on whether to join debt, preferred disposal scheme, maximize the interest of the customer.
CMB said it will closely monitor the communication between the active manager daye Trust and the Creditors’ Committee of financial institutions, and urge it to properly resolve issues such as the distribution of trust benefits.
On the same day, the daye Trust product publicity department responded that the company has joined the China Happiness Debt Committee, and everything is being promoted mainly at the pace of the debt committee. The company has done its duty as a trustee, and if there is any progress in the future, the information will be disclosed as soon as possible. “Because the whole industry is also required, just against the rules.”
Previous media reports said that the daye Trust · Junrui 15 project pooled fund trust plan, which was sold by CMB on a commission basis, has yet to distribute interest to investors for the second quarter of 2021. The trust expired on August 14 and investors have yet to receive a clear payment offer. Junrui no. 15 has a guarantor but no collateral, which is mainly “digested” by natural persons of private banks of China Merchants Bank Shanghai Branch and Beijing Branch, and partly undertaken by family trusts of Private banks of China Merchants Bank.
Non – standard “broken just” who to take responsibility
Overdue trust products have already occurred in individual regions and individual companies.
On July 19, the reporter learned that the 21st century economy, “guizhou zunyi sowing obviously by citic trust investment trust accounts receivable flow 2 period” trust plan after six months, the overdue financiers still hasn’t been completed reimbursement, citic trust has appealed to the court and the state development investment and related parties of multiple bank accounts, real estate, equity for property preservation before litigation, etc. Long before Citic Trust, Huarong Trust and Daye Trust sued Bozhou SDIC to the court because of the dispute over loan contract, and bozhou SDIC was also listed as the person subject to enforcement for trust-breaking due to the failure to fulfill the payment obligations ruled by the court.
On July 21, The Chinese capital industrial announcement, before the purchase of 120 million yuan “new era trust · [Heng New 63] collection fund trust plan”. The trust plan principal and part of the interest income are not recovered.
On August 11, media reported that “Minsheng Trust – Zhishin1071 China Jiasengyuan loan project pooled funds trust plan” exploded, and Minsheng Trust has told investors to postpone payment. “Zhishin1071” has a total existing scale of 1.35 billion yuan.
The particularity of Junrui no. 15 project lies in that most of the companies involved are “bigger” and have strong strength, including debtors, trust managers, distributors and other stars in the financial market.
More importantly, “when the trust lending, China Happiness has been in a panic, this background can also approve pure credit loans?” “Admits one industry insider.
Another trust industry also said that China Happiness default for so long, actually expected not to pay. The risks should have been warned.
15 jun farce, public information display, trust products was founded on August 14, 2020, after the establishment of the trust plan, the trustee in accordance with the provisions of the trust documents, the trust funds for the nine connections built to accepting its holdings of accounts receivable, the creditor’s rights of ding xing offers nine through inheritance promise according to the account receivable creditor’s rights transfer and the repurchase contract agreed repurchase of account receivable creditor’s rights. Jiutong Foundation Uses the transfer price of accounts receivable creditor’s rights to supplement daily working capital and subscribe for trust industry guarantee fund.
CMB subsequently issued a public company announcement said that CMB for junrui 15 project collection fund trust plan, the trust plan product issuer and active management of daye Trust. The trust funds will be used to finance 500 million yuan to Jiutong Foundation Investment Co., LTD. In order to guarantee the performance of the payment obligations of Jiutong Land Development Co., LTD., China Fortune Land Development Co., LTD., provides an irrevocable joint and several liability guarantee. The trust program expired on Aug. 16.
Another industry insiders also believe that after the release of the new regulations on asset management, trust companies can not “rigid payment”, but there is a fiduciary responsibility.
The debt crisis of China Fortune Broke out in late January 2021, and news of overdue trust and non-payment of commercial acceptance bills were reported in Succession. On February 1, China Happiness disclosed a debt overdue announcement, acknowledging the existence of overdue debt and other conditions.
However, China Happiness’s debt problems in the 2020 third quarter of the report has emerged. Last year’s third-quarter report showed that the company’s short-term borrowing and debt maturing within one year amounted to 94.02 billion yuan, up 55.6% from the end of the previous year. Long-term loans reached 65.21 billion yuan, an increase of 33.7% over the end of the previous year; There is another bond payable balance of 52.545 billion. While debt has climbed, cash on hand has dwindled. As of the third quarter of last year, its cash on hand was 36.68 billion yuan, down 10 percent from 2019, and its cash-to-debt ratio was just 0.39.
As for trust companies, Article 25 of the Trust Law stipulates: “The trustee shall abide by the provisions of the trust documents and handle trust affairs for the best interests of the beneficiary. The trustee, in managing the trust property, must fulfill his duties and fulfill the obligations of honesty, credit, prudence and effective management.”
As for the commission agencies, the notice on Regulating the Sales Agency Business of Commercial Banks also requires that the commercial banks should rate the risks of the commission products according to such factors as the investment scope, investment assets, investment proportion and risk status of the products. Commercial banks should carry out due diligence on the products to be sold on commission, and should not only take the product approval materials of the cooperative institutions as the basis for product approval.
As for the follow-up disposal of the product default, CMB announced that as of the date of this announcement, Daye Trust has not received the payment due from the financing party, and the guarantor has not performed the guarantee responsibility. Daye Trust has joined the bond Committee of China Fortune Land Co., Ltd. on behalf of the beneficiaries of the trust plan according to the voting results of the beneficiaries of the trust plan. According to the rules of the Debt Committee, the debt resolution plan of each creditor can only be known after the unified debt resolution plan determined by the debt Committee is announced. At present, the debt committee has not announced the debt solution. The company will, from the perspective of safeguarding the interests of the company’s customers, urge the active management party Daye Trust to properly solve the distribution of trust interests.
As of July 31, China Fortune has failed to repay the debt as scheduled with a total of 81.566 billion yuan. In order to resolve the company’s debt risks and accelerate the orderly operation of the company, The company is actively coordinating various parties to discuss a variety of ways to solve the current problem, The company said. Under the guidance and support of the local government, the company is developing a comprehensive risk mitigation plan as soon as possible. At the same time, the Financial institutions Creditors’ Committee is also actively coordinating and pushing forward the company’s debt rolutions, so as to gain the necessary time for the formulation and implementation of a comprehensive solution.