Dagong Real Estate News On the evening of December 12, R&F Real Estate issued a statement regarding the company's chairman Zhang Li being accused of suspected bribery for celebrating a banquet for the former head of the Public Utilities Department of San Francisco in China and providing hotel accommodation for him. The statement said the company is taking legal action against the allegations of error.
On the morning of December 13, R&F Properties made some explanations on the incident. The announcement shows that the company is aware of media reports that the London court granted bail to the company's director Zhang Li in a pending case involving ZL Properties Inc. (owned by Zhang Li and his affiliates). In response, R&F Properties clarified that it did not provide any margin on bail, it has no interest in ZLProperties Inc. and that the case will not have any material adverse impact on the company's business and operations.
Dapin Real Estate contacted relevant personnel of R&F regarding issues such as the tension incident and the next steps of R&F Real Estate, but no reply was received as of press time.
From the perspective of stock price , R&F Real Estate opened on December 13 and fell by more than 10%. Half an hour after the opening, the stock price was HK$2.22 per share, down 8.642%.
Public information shows that Zhang Li was born in 1953. In 1993, he invited Li Silian to jointly establish Guangzhou Tianli Real Estate Group Co., Ltd. (the predecessor of R&F Real Estate). From 1994 to 2005, Zhang Li served as vice chairman and general manager of R&F Properties; from 2005 to the present, he served as co-chairman of the group. On April 6, 2022, Zhang Li and Tensor father and son ranked 91st in the "2022 Hurun Global Real Estate Entrepreneur List " with 18 billion yuan.
It is worth mentioning that this is not the first time that R&F has been caught up in the "bribery" problem. According to information from China Judgment Document Network, Wang Xiaoyu, former assistant manager of the development department of Tianjin R&F Real Estate Development Co., Ltd. (group: R&F Real Estate), took advantage of his position in charge of the procurement and installation project of Shangyue Home in Wuqing District, R&F Real Estate, to arrange for Tianjin Zhaohong Automation Instrument Co., Ltd. to win the bid for the project and ask Gao, the head of Tianjin Zhaohong Automation Instrument Co., Ltd. for benefits. From September 2016 to September 2018, Gao successively gave the defendant Wang Xiaoyu 1.0413 million yuan through cash and bank transfer. The People's Procuratorate of Heping District, Tianjin believes that its behavior constitutes the crime of accepting bribes by non-state staff and is sentenced to three years and six months in prison and a fine of 800,000 yuan in accordance with the law.
According to Beijing News , on December 28, 2019, Beijing Higher People's Court made a final ruling on the "buying a house and accepting bribery case" by Wang Jian, chairman of the Youth Foundation. The court held that Wang Jian used his position as Secretary of the Party Committee and Director of the Industrial Development Center of the Central Committee of the Communist Youth League and Director of the China Youth High-tech High-tech High-tech High-tech High-tech High-tech High-tech and R&F (Beijing) Real Estate Development Co., Ltd. (group: R&F Real Estate) to jointly develop the "China Youth Publishing House Printing Factory Comprehensive Renovation Project" for R&F Beijing Company. In September 2010, he purchased a commercial house from R&F Beijing Company at a significantly lower market price for his relatives (No. 503, 4th Floor, Building 12, No. 3, Guangqumenwai Street, Chaoyang District, Beijing). The difference between the price paid by the house he purchased and the market price at the time of the transaction was about 3.6885 million yuan. The final ruling was found that Wang Jian was sentenced to 10 years and 6 months in prison for accepting bribes and fined 600,000 yuan. On August 15, 2019, Wang Jian’s family returned approximately 4.5027 million yuan.
Behind the bribery storm, R&F Real Estate is also facing high debt. The 2022 semi-annual report shows that as of June 30, 2022, the group's non-current liabilities were approximately 63.453 billion yuan, current liabilities were 243.07 billion yuan, total liabilities were 306.461 billion yuan, and the debt-to-asset ratio was 80.11%.
On November 10, R&F Real Estate issued an announcement stating that 8 domestic corporate bonds including "H16 R&F 4" were extended, with the total amount of bonds 13.5 billion yuan, and the weighted average maturity period was extended from about 4 months to more than 3 years. In July this year, R&F has completed the overall extension of 10 US dollars bonds, totaling US$4.943 billion (approximately RMB 33.237 billion), and the repayment period has been extended by three to four years.
Faced with the uncertainty of available working capital and the huge debt that will expire in 2022, R&F Real Estate began its asset sale. The announcement shows that in April this year, the group completed the sale of Vauxhall Square in London for a cost of £95.7 million.R&F believes that the sale of VauxhallSquare can offset liabilities due in 2022 and cash out several additional working capital for working capital purposes.
In addition to selling VauxhallSquare, R&F Properties also sells 50% ownership of OneThamesCity (OTC, a similar project in London) for a cost of HK$2.66 billion. R&F said the sale of the OTC project was a large transaction, allowing the group to further reduce its spot liabilities that were originally unable to repay when it expired. As for China, the group sold a hotel in Fuzhou for a price of 430 million yuan.
In addition, Dagong Real Estate also noticed that in October this year, Moody's issued an announcement stating that for its own commercial reasons, it decided to withdraw the "Caa2" company family rating and the "Caa3" company family rating of R&F Properties (Hong Kong) Co., Ltd. Before the rating is revoked, the rating outlooks of both entities are negative.
