In the past, there was the "Oceanwide Department" debt collection that was not completed, and then there was the "Oriental Department" risk, and Minsheng Bank was in an eventful situation
"China Science and Technology Investment", Zhang Ting, Long Qiuyue
On June 26, Dongfang Group (600811.SH) announced that it had received the "Notification Letter" from the creditor Heilongjiang Donghui Construction Engineering Co., Ltd. (hereinafter referred to as "Donghui Company"), and because the company failed to pay off the due debts of Donghui Company, it obviously lacked solvency but had a certain reorganization value, and Donghui Company had submitted materials to the Harbin Intermediate People's Court to apply for the reorganization of the company. It is worth noting that Donghui Company is the contractor of the renovation project and interior decoration project of Harbin Oriental Building, and the remaining project payment to be paid by Oriental Group is only 752,300 yuan.
In fact, it has only been about a week since the emergence of public opinion in the Eastern Bloc. As an associate, the debt crisis of the Oriental Group has also brought Minsheng Bank (600016.SH) to the forefront again. On June 26, Minsheng Bank held a general meeting of shareholders. In the exchange session, small and medium-sized shareholders expressed their concerns about the related party transactions of Oceanwide and Dongfang. Huang Hongri, vice president of the bank, said, "The related credit of the Oriental Group was also disclosed in last year's annual report, and the balance of the Oriental Group's loans in our bank was 9.889 billion yuan." According to a report by Caixin on June 27, the liquidity of shareholders "Dongfang" was under pressure, and Minsheng Bank said that related loans had fallen to more than 7 billion yuan.
Minsheng Bank is the first national commercial bank established by private capital in Chinese mainland, established on January 12, 1996, and its major shareholders include Liu Yonghao's New Hope Group, Zhang Hongwei's Oriental Group, and Lu Zhiqiang's Oceanwide Group. Related to the background of shareholders, Minsheng Bank also has a lot of related loan business. According to the 2023 annual report, the bank's total related loans are as high as 85.609 billion yuan, and the balance of the "Oceanwide system" loans alone has reached 18.726 billion yuan. In January 2023, the Beijing branch of Minsheng Bank filed a lawsuit against Oceanwide Holdings Co., Ltd. (hereinafter referred to as "Oceanwide Holdings") and other companies and Lu Zhiqiang on the grounds of a dispute over a financial loan contract, kicking off debt collection. Minsheng Bank has failed to collect debts from the "Oceanwide System" in the past, and then its shareholder Oriental Group has fallen into a restructuring dilemma.
Debt collection "Oceanwide Department"
According to the annual report, from 2021 to the end of 2023, the total balance of related loans of Minsheng Bank was 63.714 billion yuan, 70.743 billion yuan, and 85.609 billion yuan respectively. Specifically, from 2021 to 2023, the loan balances of "Oceanwide System" in Minsheng Bank will be 21.219 billion yuan, 21.2 billion yuan, and 18.726 billion yuan respectively; The balance of loans of Oriental Group and its affiliates in the bank was 8.521 billion yuan, 8.837 billion yuan and 9.599 billion yuan respectively.
In January 2023, Minsheng Bank Beijing Branch filed a lawsuit against Wuhan Center Development and Investment Co., Ltd. (hereinafter referred to as "Wuhan Central Company"), Wuhan Central Business District Co., Ltd. (hereinafter referred to as "Wuhan Central Company"), Oceanwide Holdings and Lu Zhiqiang on the grounds of a dispute over a financial loan contract. In June 2018, Wuhan Center Company signed the Fixed Asset Loan Loan Contract with Beijing Branch, which stipulated that the loan amount was RMB 4 billion and the outstanding principal was RMB 3.972 billion, and the guarantee was in the form of mortgage of the land and construction in progress of the Wuhan Center Project, and guarantee by Oceanwide Holdings and Lu Zhiqiang. In March 2020, Wuhan Central Company and Beijing Branch signed the Fixed Asset Loan Loan Contract, which stipulated that the loan amount was 3.066 billion yuan, and the outstanding principal was 3.046 billion yuan. The guarantee method is the mortgage of five pieces of land under the name of Wuhan Central Company, Oceanwide Holdings and Lu Zhiqiang's guarantee. In October and November 2023, the above-mentioned cases ushered in the first-instance judgment, and Wuhan Central Company and Wuhan Central Company were required to repay the loan principal of 3.046 billion yuan and 3.972 billion yuan respectively to the Beijing Branch, as well as the corresponding interest, overdue penalty interest and compound interest.
In May this year, the Beijing branch of Minsheng Bank filed a lawsuit against China Oceanwide Holdings Group Co., Ltd. (hereinafter referred to as "Oceanwide Holdings Group"), Oceanwide Holdings, Tonghai Holdings Co., Ltd., Oceanwide Real Estate Investment Management Co., Ltd. and Lu Zhiqiang on the grounds of a dispute over a financial loan contract, requesting that the defendant Oceanwide Holdings Group be ordered to repay the loan principal of a total of 4.266 billion yuan, and that the defendant Oceanwide Holdings be ordered to repay the loan principal of a total of 1.2 billion yuan, as well as the corresponding interest, penalty interest and compound interest. At present, the case has been filed and has not yet been heard. Minsheng Bank also mentioned in this announcement that including the amount involved in the above-mentioned disclosed litigation matters, the cumulative amount involved in the litigation and arbitration matters incurred by the Bank in the past 12 consecutive months has reached 10% of the absolute value of the Bank's latest audited net assets.
According to the first quarter report of this year, 1.803 billion A shares of Minsheng Bank held by Oceanwide Holding Group are in a pledged state, and 389 million shares are frozen by the judiciary. According to the announcement on the progress of a number of litigation matters made public by Minsheng Bank, the bank currently collects debts from the "Oceanwide Department" through judicial litigation with a total amount of 12.484 billion yuan.
On June 26, the results of the re-election of the board of directors of Minsheng Bank were released. As expected, Lu Zhiqiang, who faced the bank in court, was not eligible for re-election on the board of directors.
The risk of the "Oriental system" has risen again
At the end of the first quarter of this year, Oriental Group held 1.28 billion A shares of Minsheng Bank, ranking the tenth largest shareholder, and its 1.268 billion shares were pledged.
On June 19, Oriental Group announced that it had received a written reply from Oriental Group Finance Co., Ltd. (hereinafter referred to as "Oriental Finance Company") that due to the temporary tightening of liquidity in Oriental Finance Company recently, the company and its subsidiaries were restricted from withdrawing large amounts of deposits in Oriental Finance Company. As of June 17, the company and its subsidiaries had a deposit balance of 1.64 billion yuan in Oriental Finance Company, and a loan balance of 666 million yuan from the company and its subsidiaries in Oriental Finance Company. Subsequently, the Shanghai Stock Exchange quickly issued a regulatory inquiry letter to Oriental Group, requiring it to self-examine the deposit and use of deposits in affiliated financial companies and other related matters. On June 19, Oriental Group said that it had received the "Letter of Commitment on Resolving the Relevant Risks of the Financial Company", and that Oriental Group Co., Ltd. (hereinafter referred to as "Oriental Company"), as the controlling shareholder of Oriental Financial Company, and Zhang Hongwei, the actual controller, planned to support Oriental Financial Company in resolving the problem of insufficient liquidity funds by means including but not limited to asset disposal, so as to ensure the safety and liquidity of the company's deposits in Oriental Financial Company.
On June 21, Oriental Group received a decision on administrative supervision measures issued by the Heilongjiang Securities Regulatory Bureau of the China Securities Regulatory Commission for failing to perform the review procedures and information disclosure obligations of related party transactions in accordance with the regulations. On the same day, the China Securities Regulatory Commission decided to file a case against Oriental Group on suspicion of illegal information disclosure by the company. On June 22, Tibet Oriental Runlan Industrial Investment Co., Ltd. (hereinafter referred to as "Oriental Runlan"), the major shareholder of Oriental Group, and its controlling shareholder Oriental Company defaulted on debts and was affected by the continuous decline in stock prices, and CITIC Securities (600030.SH) forced liquidation of part of the shares of Oriental Runlan's margin financing and securities lending business on June 21. Dongfang Runlan passively reduced its holdings of 23.06 million shares. Affected by the above-mentioned events, from June 19 to 21, the daily closing price of Oriental Group deviated by more than 20% in three consecutive trading days, and abnormal fluctuations in stock trading occurred.
On June 25, Oriental Group announced that the closing price of the company's shares on June 24 was 0.9 yuan per share, which was lower than 1 yuan for the first time. If the daily closing price of the stock is less than RMB 1 for 20 consecutive trading days, the company's shares may be terminated from trading by the Shanghai Stock Exchange. On June 28, Oriental Group closed at 0.66 yuan per share, and the stock closed below 1 yuan for 5 consecutive days. On June 26, Oriental Group issued a suggestive announcement that the creditor Donghui Company applied for reorganization.
Only 752,300 yuan of claims were submitted to the court to apply for the start of reorganization, and the cash flow situation of Oriental Group may not be optimistic. The announcement of the application for debt reorganization also plunged Minsheng Bank into the whirlpool of public opinion again, how could Oriental Group's loan of nearly 10 billion yuan in the bank be preserved?
Coincidentally, on June 26, Oriental Group and Minsheng Bank held a shareholders' meeting on the same day. Judging by the disclosed announcement of the resolution, it seems that the Eastern Bloc does not have a separate "emergency motion" on the current issue. In the exchange session of the shareholders' meeting of Minsheng Bank, small and medium-sized shareholders expressed concern about related party transactions such as Oceanwide and Oriental. Huang Hongri, vice president of the bank, said, "By the end of last year, the balance of the Group's loans to Oceanwide Group was 18.726 billion yuan. At present, we will speed up the tracking of the resolution of the debt risk of Oceanwide Group, and have actively made corresponding provisions, which are not expected to have a significant impact on the operation and management of the Group. The balance of Oriental Group's loans in our bank is 9.889 billion yuan, and the relevant loan guarantee methods are mainly real estate mortgage and equity pledge, and the actual controller and the group joint and several liability guarantee are also added. We have also paid attention to the restrictions on the withdrawal of large deposits of the Oriental Group, and we will continue to strengthen the risk monitoring of the Oriental Group and actively promote the risk mitigation work."
According to a report by Caixin on June 27, the liquidity of shareholders "Dongfang" was under pressure, and Minsheng Bank said that related loans had fallen to more than 7 billion yuan.
At the end of the first quarter of this year, the total assets of Minsheng Bank were 7,727.511 billion yuan, and the operating income and net profit attributable to the parent company were 34.273 billion yuan and 13.431 billion yuan respectively, down 6.8% and 5.63% year-on-year respectively. The non-performing loan ratio and provision coverage ratio were 1.44% and 149.36% respectively.
In response to issues such as Minsheng Bank's related party transaction loans and its own operations, the reporter sent a letter to Minsheng Bank, but as of press time, no reply has been received.
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