The company was fined 43.73 million yuan of illegal gains for insider trading Jilin Forestry stocks and was fined twice as much. The decline in performance, pressure on asset quality, and the investigation of the chairman all made the company turbulent and uneasy
Text | Reporter of "Investment Times" Liu Jiaxin
Jilin Trust in 2017 has been unfavorable in the current year.
The biggest storm was that Li Wei, the Party Secretary and Chairman of the Board, was investigated by the organization for suspected serious violations of discipline.
However, those who are lucky will never suffer singly. At the end of the year, while Shanghai Trust, National Trust , Jingu Trust, Lujiazui Trust, Ping An Trust and other peers were intensively punished for being involved in the "Jiangxi Xing Debt" incident, Jilin Trust was also "hit" again due to an insider transaction.
At the end of December 2017, Jilin Trust received an administrative penalty decision issued by the China Securities Regulatory Commission: Jilin Trust's illegal income of 43.7332 million yuan was confiscated and fined 43.7332 million yuan for insider trading of Jilin Forest Engineering Co., Ltd. (hereinafter referred to as "Jilin Forest Engineering") stocks, over-proportion holdings and trading within the restricted period. The then legal representative and chairman of Jilin Trust were given a warning and a fine of 200,000 yuan was imposed.
The total fine of nearly 88 million yuan is certainly not a decimal to this company that is not strong. Wind data shows that among the 68 trust companies in China, Jilin Trust ranked 38th in terms of total assets ranking in 2016; however, it ranked 56th in terms of net profit.
What's worse is that the company's performance decline seems to be accelerating. In 2016, its trust project achieved revenue of 3.998 billion yuan, a year-on-year decrease of 27.69%, and its trust profit after deducting asset losses was 3.605 billion yuan, a year-on-year decrease of 14.23%. In the first half of 2017, Jilin Trust achieved operating income of 286 million yuan and net profit of only 198 million yuan, ranking quite low in the industry.
was fined for insider trading
Against the backdrop of stricter supervision, many trust companies received fines from regulators in 2017. Jilin Trust chose the last moment when the calendar cards were about to be torn, which was somewhat "unlucky".
It is reported that the target of its insider trading is Jilin Forest Engineering (SH600189). The company is a holding listed company under China Jilin Forest Industry Group and was listed in 1998. Public information shows that Forestry Group is China's first large state-owned forestry enterprise and one of China's four major forestry groups. Both Jilin Trust are state-owned enterprises in Jilin Province.
According to the investigation by the China Securities Regulatory Commission, Gao Fubo, who was then the chairman of Jilin Trust, was familiar with Bai Mouxin, the chairman of Forest Engineering Group, and the two contacted frequently on the phone before and after the account involved in the case.
On August 3, 2015, when the two accounts of "Jilin Jiusheng" and "Changchun Hengxin" bought a total of 5% of Jilin Forestry's issued shares, Jilin Trust did not stop buying before fulfilling its reporting and announcement obligations. Instead, it bought 3.2563 million shares in excess of the proportion, with a transaction amount of 41.0248 million yuan.
The account involved in the case, "Jilin Jiusheng", bought a total of 12.025 million shares from July 10 to July 17, 2015, with a transaction amount of 148 million yuan. On July 30, 1.095 million shares were sold, with a transaction amount of 15.9413 million yuan. On July 31, he bought 1.1827 million shares again, with a transaction amount of 15.9146 million yuan. All sold from December 23 to 24, with the above transaction accounting profit of 23.3185 million yuan. From the time of opening the account to the investigation, only one stock in Jilin Forestry has been traded, and the amount of stocks bought and sold accounts for nearly 100% of the available funds in the account.
data shows that after the insider information was formed and before the disclosure, the account involved bought a total of 22.23 million shares of "Jilin Forest Worker" with a transaction amount of 279 million yuan, a total of 3.4494 million shares were sold, with a transaction amount of 50.3623 million yuan, and after the insider information was disclosed, all "Jilin Forest Worker" was sold, and the accounting transaction profit was 43.7332 million yuan.
The asset quality pressure is high
Why did Jilin Trust take risks? Industry insiders have different views on this, but one thing is worth noting, that is, it is facing considerable pressure on asset quality.
data shows that in 2016, the non-performing loan rate of Jilin Trust was 22.87%, and the non-performing assets were 59.9894 million yuan. At that time, only three trust companies had a non-performing rate of more than 20%, and Jilin Trust was one of them. During 2014 and 2015, the non-performing rate of Jilin Trust was even 35.25% and 23.25%.
Two events have attracted much attention in the asset quality issues encountered by Jilin Trust. In 2012, Jilin Trust was cheated of 150 million yuan in loans by a "quarry". In 2014, the incident was revealed. After investigation, it was found that there were almost no workers in the quarry. In desperation, Jilin Trust had to announce the use of its own funds to cash the principal; another breach was the redemption dispute over the "Jisin Songhuajiang No. 77 Shanxi Fuyu Energy Project Income Rights Collective Fund Trust Plan" reorganization, which was related to Shanxi Liansheng's restructuring. It is reported that the incident has not been completely resolved yet, and the amount involved in the project is nearly 1 billion yuan.
Jilin Trust was formerly Jilin Provincial Economic Development Company. It was established in 1985. In February 2009, with the approval of the China Banking Regulatory Commission, it was renamed Jilin Provincial Trust Co., Ltd. It is the only non-bank financial institution in Jilin Province specializing in financial trust business.
Jilin Trust’s registered capital is 1.596 billion yuan. In the first half of 2017, Jilin Trust achieved operating income of 286 million yuan and net profit of 198 million yuan.
default crisis continues, and the violations of discipline by many senior executives of the company have made Jilin Trust's performance very turbulent.
In terms of net profit growth rate, the company is riding a roller coaster. From 2013 to 2016, its net profit growth rates were 61.47%, -37.64%, 103.34%, and -42.85%, respectively. The same is true for the operating income of
over the past four years. It can be seen that Jilin Trust's operating income has been declining year by year, while its net profit is less than that of three years ago.
Wind data shows that Jilin Trust's operating income from 2013 to 2016 was RMB 854 million, RMB 715 million, RMB 903 million and RMB 598 million respectively; net profit was RMB 430 million, RMB 268 million, RMB 546 million and RMB 311 million respectively.
In terms of shareholder structure, the Jilin Provincial Department of Finance holds 97.496% of the shares on behalf of the Jilin Provincial Government, and is the largest shareholder of Jilin Trust. The other four shareholders, Jilin Energy and Transportation Corporation, Jilin Carbon Group Co., Ltd., Jilin Grain Group Co., Ltd., , and Jilin Chemical Fiber Group Co., Ltd., , each holds 0.626% of the shares.
In a sense, Jilin Trust is a 100% provincial state-owned company.
Chairman was investigated for turmoil
Judging from the short history of Jilin Trust, the position of chairman also seems to be particularly "shocking".
In 2009, former chairman Zhang Xingbo was sentenced to death with a suspended life for committing corruption and bribery; in June 2007, the second chairman Gao Fubo took the helm of Jilin Trust; in 2008, Jilin Trust once hoped to go public through the backdoor of Tonghua Jinma, but failed to make a fortune. A series of default risk events such as the "Jisin Songhuajiang No. 77 Shanxi Fuyu Energy Project Income Rights Collective Fund Trust Plan" reorganized by Shanxi Liansheng also occurred during this period. Gao Fubo was also fined 200,000 yuan for insider trading in Jilin Forest Workers. As early as October 2015, the Jilin Provincial Government removed Gao Fubo from his position as chairman, and Li Wei took over as chairman of Jilin Trust.
Li Wei has served in the position of chairman for less than two years. In May 1997, he was appointed as deputy director of the Jilin Provincial Department of Construction; in January 1999, he was appointed as secretary of the Municipal Party Committee (deputy department level); in June 2002, he was appointed as member of the Standing Committee of the Changchun Municipal Party Committee and secretary of the Yushu Municipal Party Committee; in August 2002, he was appointed as deputy mayor of the Changchun Municipal Government; in January 2008, he was appointed as secretary of the Baishan Municipal Party Committee; since September 2015, he has served as secretary of the Party Committee and chairman of Jilin Trust.
However, the storm failed to stop. In 2017, the Jilin Provincial Commission for Discipline Inspection announced that Li Wei, Secretary of the Party Committee and Chairman of Jilin Trust, was suspected of serious violations of discipline and was under organizational review.
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