company was removed from MSCI and almost forced to delist.
Zhu Li Yuehua (right) and his father Li Huiwen
will be returned sooner or later.
The China Hong Kong Government Gazette announced on February 15 that the Hong Kong Securities Regulatory Commission requires the freezing of assets of several customer accounts of Cheung Kong Securities (Hong Kong), Haitong International and Jinlifeng, with a total value of 3.815 billion yuan.
The reason is that when a listed company raised funds in 2015, two senior management personnel of the listed company were suspected of disclosing false or misleading information to induce transactions. The listed company raised 3.815 billion yuan in its fundraising activities since then.
In addition, the two people are also suspected of misappropriating part of the funds raised by the listed company in 2015 through a company registered and established in the British Virgin Islands (BVI) and wholly owned and controlled by the two, with a total amount of 258 million yuan.
As for why several client accounts of the above three securities companies were frozen, the announcement shows that some misappropriated funds of in were deposited into a company A, and company A held the above-mentioned account frozen by the Securities Regulatory Commission.
As the only Hong Kong company in China, Jin Lifeng, its founder Zhu Liyuehua is one of the few "securities sisters" in the Hong Kong financial industry who can compete with male wealthy people. In the 2018 Hong Kong Rich List, Zhu Liyuehua firmly ranked in the throne of the richest woman in Hong Kong with a net worth of 12 billion .
Jinlifeng officially introduces its business to provide comprehensive financial services, including securities brokerage, underwriting and allocation, margin and initial public offering financing, corporate financial advisory services, futures brokerage and asset management services. In addition, the company also provides gambling and hotel services in Macau. In the eyes of industry insiders, Jinlifeng is a well-known event for helping mainland Chinese companies to "backed backdoor" listing and financing in Hong Kong through various methods, and is well-known for listing third- and fourth-tier penny stocks and "backed backdoor" activities in the Hong Kong stock market. Therefore, Zhu Li Yuehua has always been known as the "behind the shell". In addition, because his father Li Huiwen is a veteran of the gambling industry in Macau, Zhu Li Yuehua is also known as the "Princess of the Gambling Hall".
But 2018 was not going well for Zhu Liyuehua. In the latest 2019 Hong Kong Rich List, Zhu Li Yuehua not only lost the position of the richest woman in Hong Kong, but also became the Hong Kong richest man with the largest decline in wealth. His personal wealth fell from US$12 billion to US$3.3 billion in 2018, evaporating 73%, and ranking fell 21 places.
Some accounts were frozen this time, and perhaps it was just the beginning. Luo Mingwei, a former executive of a Hong Kong listed company, told Time Finance that this may involve Jinlifeng Securities helping the actual controller of a domestic company to use BVI and Hong Kong shell companies to misappropriate listed companies to raise funds, or it may have violated Hong Kong financial regulations.
The year of unfavorable
It is worth noting that this is not the first time that Jin Lifeng has received such punishment. In September 2018, Kim Lifeng also appeared in the gazette of the Hong Kong Special Administrative Region Government. All transactions in its related accounts were suspended for suspected conspiracy with certain management of the group in a suspicious transaction involving a listed company, planning fraudulent plans, with a maximum of HK$10.2 billion, which is the largest frozen capital scale in the history of Hong Kong stocks.
Jinlifeng Financial Group CEO Zhu Liyuehua said at the Hong Kong financial services industry New Year's reception that it is common for securities bank clients to be frozen, and receiving letters from regulatory agencies or other regulatory agencies is also common in the industry, but it is a bit rare for gazetted documents.
As early as the end of January 2018, Jin Lifeng also experienced a negative news. On January 29 of that year, the Hong Kong Securities Regulatory Commission issued an announcement stating that as of January 8 of that year, Jinlifeng Financial's equity was excessively concentrated on minority shareholders, and warned the market. The announcement shows that the company's top 20 shareholders hold a total of 91.653% of the issued shares, that is, only 8.347% of the company's equity is held by public shareholders.
Luo Mingwei emphasized that major shareholders are highly controlled and are easy to manipulate stock prices, so Hong Kong and the mainland generally require major shareholders of listed companies to hold more than 75% of their shares and public shares should exceed one-quarter. If the shareholding ratio of the major shareholder exceeds the limit for a period of time, it is generally necessary to delist.
Affected by this, Jinlifeng plummeted by 30% the next day. Although Jin Lifeng made a timely statement, it confirmed that the public's shareholding had exceeded 25% after inquiry.But the stock price continued to plunge in the following days.
Disaster will never happen singly. On May 15, 2018, the MSCI Hong Kong Index of the Global Index series was adjusted, excluding Jinlifeng, causing its stock price to fall for three consecutive days. The effective period was around May 31, 2018 and there was another wave of decline.
In addition to being frequently named, Jinlifeng's performance is also on the decline. The company's 2018 interim report shows that the six-month turnover ended September 31, 2018 was HK$1.571 billion, a decrease of about 3% from HK$1.616 billion in the same period last year; the company's profit attributable to owners decreased by 35% year-on-year; the company's earnings per share decreased by about 35% compared with the same period last year.
Specifically, Macau's gaming and hotel industries continued to grow, with margin and initial public offering financing not much change, accounting for about 69% of the company's total revenue. However, the company's main sources of income, securities brokerage, underwriting and allotment services, has decreased by about 26% compared with the same period last year, accounting for 7% of the Group's total income from 9% last year; the revenue reduction of mainly corporate financial advisory services, futures brokerage and other financial services, which mainly include corporate financial advisory services, futures brokerage and asset management, reached 44%, but this type of income only accounts for about 2% of the company's total income.
Company explained that the global financial market is turbulent, and China's domestic GDP growth rate shows signs of a slight slowdown, which makes the market full of prudent investment atmosphere, resulting in a slowdown in financial activities during this period, and the average daily trading volume of the Hong Kong securities market has declined.
"Zhu Tai" fierce
Although Jin Lifeng's performance in 2018 was not good, it could not change the legend that Zhu Li Yuehua was talked about.
Zhu Woyu, Liu Luanxiong, Zhu Li Yuehua, Li Huiwen
Zhu Li Yuehua was originally named Li Yuehua. She was born in Hong Kong in 1958 and immigrated to the United States to study at the age of 14. She was renamed Zhu Li Yuehua because she married Zhu Woyu and named her husband's surname. Therefore, she was later called "Teacher Zhu". After marriage, the couple expanded their real estate business in the United States. It was not until 1992 that Zhu Liyuehua, who had been away from his hometown for 20 years, returned to Hong Kong and found that Hong Kong was developing rapidly, and then chose the securities industry to start a new career.
Because Zhu Liyuehua had no professional securities experience before, although her husband studied accounting, the couple still studied while doing it. But during the tide of Asian financial crisis in 1997, Jin Lifeng made a miraculous progress. Zhu Liyuehua later made it public that Jin Lifeng did not fall into the financial crisis. The key is that he did not speculate in stocks, nor did he allow his subordinates to speculate in stocks, and he was very cautious in handling customer services and rarely participated in speculation, so that he could survive the stock market crash safely. After stabilizing his foothold, Jin Lifeng established his position in the martial arts world through several "big moves". Zhongce's "Snake Swallows Elephant" acquisition of Nanshan and the privatization of telecommunications Yingke became the focus of discussion at the time. But to sum up the rules, we can see that Jinlifeng is targeting the fine stocks in Hong Kong stocks. The so-called fine stocks are low-priced stocks. The number of stocks issued by the company is relatively small, the stock price is low, and the market value is also low, which is similar to what we call "junk stocks" today. These stocks are usually difficult to raise funds, so international investment banks generally disdain to contact them. Jin Lifeng just uses this to make money.
First of all, it meets the financing needs of these fine-priced stock companies. Jinlifeng raises funds from large shareholders of low-priced stock companies and charges high interest rates. When the company was unable to repay its debts, Jinlifeng gained control of the company through equity mortgage, that is, it obtained "shell stocks". Then, it joined forces with some wealthy people to inject concept assets into the shell stocks and mobilized the wealthy people to join together to create momentum, which eventually attracted local retail investors and even mainland funds to influx. Jinlifeng and Hong Kong wealthy people cashed out at high prices and made huge profits.
It can be seen that the key to Zhu Li Yuehua's operation is to gather a group of wealthy people to create momentum, and his status as a "Casino Princess" can obviously help a lot. You should know that Zhu Li Yuehua's father Li Huiwen is a person of the generational rank of his uncle in the Macau gambling industry. He is considered to be the right-hand man of Macau's " gambling king " Stanley Ho , and is known as "Brother Fu". There are rumors that for every 100 yuan of gambling king Stanley Ho earns, Li Huiwen accounts for 20 yuan.
Relying on his father's status in Hong Kong, Zhu Liyuehua gathers in many wealthy people. When operating Zhongce Group acquired Nanshan Life Insurance, Taiwan, China through the "snake swallowing elephant", the "iron triangle" composed of Liu Luanxiong, Zhang Songqiao and Zheng Yutong gave real money to support it.Why is
called "snake swallowing elephant"? It is because Zhongce Group was really not worth mentioning at the beginning. Before Jinlifeng's operation, Zhongce Group's closing price before the suspension was only HK$0.38, which is a typical fine stock. At the end of August 2007, as the allotment agent, Jinlifeng allocated 1.588 billion allotment shares for Zhongce Group in two batches at a price of HK$0.33 per share, accounting for 360.25% of the issuing share capital.
At the same time, Jinlifeng will also issue convertible notes with a total amount of up to HK$1.32 billion, with the maturity date being the end of 2010. If all of them are converted in 2008 at a price of HK$0.33, the company will issue 4 billion new shares, accounting for approximately 907.45% of the issued share capital.
This round of asset inflation is not enough. Zhongce Group intends to acquire 97.59% of Nanshan Life Insurance's equity for HK$16.77 billion, but Zhongce Group itself has no funds, so Jinlifeng began to show its means. In 2009, Jinlifeng plans to raise 7.8 billion yuan in shares allotment to at least six people. It is worth noting that Zhongce Group's market value was only more than 500 million yuan at that time. Jin Lifeng did it, and Zhu Liyuehua's wealthy friends Liu Luanxiong, Zhang Songqiao and Cheng Yutong participated in the subscription of 7.8 billion yuan of convertible stock notes. Jinlifeng, a securities firm as an allotment agent, received a 2.5% share allotment commission and earned 195 million yuan.
Since then, Zhu Liyuehua has joined hands with some well-known groups and politicians to form a Bozhi Consortium, which once won Nanshan Life Insurance. However, due to factors such as Nanshan salesmen also took to the streets to protest several times, the Taiwan Financial Control Commission rejected the acquisition proposal. Although the acquisition was not successful, the industry saw Zhu Liyuehua's strategy: not only provides financial services, but also contacts multiple parties with exclusive resources and is responsible for promoting projects. Therefore, it has won the favor of many wealthy people. Li Ka-shing's son Li Zekai privatization of PCCW Yingke is the main force that Jin Lifeng is short, so Jin Lifeng is nicknamed "Rich Prince Securities Bank" by the industry.
But Zhu Li Yuehua's operations of tens of billions of yuan often harm the interests of small shareholders of listed companies. Taking the above-mentioned Zhongce Group's 1.32 billion convertible notes issued by Hong Kong dollars as an example, if the allocation is completed and the convertible notes are fully converted at HK$0.33 per share, the public shareholders' equity will drop directly from 71.46% to 5.23%. Zhu Liyuehua made a big profit by making up for the lack of damage and making up for the surplus, and even wandered on the edge of the rules. It seems inevitable that he was repeatedly targeted by relevant government departments of the Hong Kong Special Administrative Region. (Beijing Time Finance Chen Shiai)
