On the morning of September 11, the Fengxian Branch of the Shanghai Municipal Public Security Bureau announced that it had filed a case for investigation of Haiyin Wealth Management Co., Ltd. on suspicion of illegal fundraising in accordance with the law, and took criminal coercive measures against many criminal suspects such as Han Moumou, Han Moumou, and Wang. At present, the public security organs are comprehensively collecting evidence of crimes, making every effort to promote the investigation and handling of cases, recovery of stolen goods and losses, and other work, so as to protect the rights and interests of investors to the greatest extent.
On September 10, the market circulated news that Han Hongwei, the actual controller of Haiyin Wealth, was taken away.
Market rumors said that Han Hongwei, the owner of Haiyin Wealth, and more than 20 executives were taken away by the police for review, and some people released pictures of the scene.
Image source: Online on-site pictures
According to the investigation report of the Securities Times, the Haiyin Wealth Management Products have been completely stopped paying, and have not been able to come up with an effective aftermath plan, and a large number of underlying assets have even been confirmed to be completely fabricated and fictitious, and most of the funds raised are unknown. There are nearly 50,000 high-net-worth users, involving a scale of up to 70 billion yuan. After the cashing crisis, Han Hongwei, the actual controller of Haiyin Wealth, promised investors to "go all out".
The 70 billion yuan "capital pool" exploded
Media Investigation: A large number of underlying assets are completely fictitious
In December last year, Hywin Wealth announced that due to the recent economic downturn, the project has been delayed, and Hywin Wealth has set up a special team to actively coordinate with the relevant parties of the project to plan the disposal plan. According to the latest regulatory policies and industry guidance, Hywin Wealth took the initiative to withdraw and sort out the existing business. In this regard, the risk of Haiyin Wealth has fully exploded.
A number of investors of Hywin Wealth revealed to reporters that the minimum investment amount of the products sold by Hywin Wealth is 300,000 yuan or 1 million yuan, and the annualized rate of return is in the range of 7%-10%, and most of the funds of the products are used for financing enterprises. In the past few years, Hywin Wealth and Wuniu Holdings have fabricated false investment projects through registered investment companies and fake gold exchange companies, designed and packaged a large number of investment and wealth management projects such as accounts receivable and urban investment bonds, and then sold them by more than 170 branches of Hywin Wealth across the country, inducing tens of thousands of investors to buy, raising a total of tens of billions of yuan. A large number of investors have submitted their reports to the police and regulatory authorities, awaiting further investigation results and feedback.
After more than 2 months, the reporter went to Zhejiang, Shanghai, Shandong, Hubei and other 8 provinces and cities to investigate on the spot and found that all the wealth management products sold by Haiyin Wealth violated the rules, and manipulated dozens of shell companies to build a "nested capital pool" with a scale of more than 70 billion yuan.
The investigation further found that the underlying assets invested by such pools have generally shrunk significantly compared with the amount of funds raised, and a large number of underlying assets have even been proved to be completely fabricated and fictitious, and the whereabouts of most of the funds raised are unknown.
As early as the end of 2021, the relevant regulatory authorities have launched a clean-up and rectification of the "fake gold exchange". According to the relevant rectification guidance, the so-called "listing and delisting business" and "registration and filing business" engaged in by the "fake gold exchange" are all illegal financial activities, and they will be severely cracked down and banned, and the relevant companies will be required to close down and deregister, or change their names and business scopes.
According to investors' feedback, when the financial planners of Hywin Wealth sold products to customers, they claimed that they were legitimate products that had been registered and filed, which constituted a material misleading situation for investors.
The actual controller is a Henan capital tycoon
It was once known as "product investment in real estate projects such as Evergrande"
As the richest man in Yongcheng, Henan, Han Hongwei is self-made and has a certain mystery.
In 1987, Han Hongwei retired from the army and changed jobs, gave up the iron rice bowl, and harvested the first pot of gold in the freight field. In 1997, he walked out of Yongcheng, Henan Province, and moved to Zhengzhou, the provincial capital, to do business related to automobiles and medical health.
In 2004, Han Hongwei initiated the establishment of the Henan Chamber of Commerce in Shanghai, and later established the Yushang Group on this basis. The regional chamber of commerce formed a similar credit platform to lend and mutual aid in the form of private lending, which allowed Han Hongwei to experience the "magic" of compound interest in financial business.
So far, Han Hongwei has gradually established a Haiyin Group integrating entity investment, financial services and commerce, and finally formed a well-known financial capital "Haiyin System". At its peak, Han Hongwei and Han Xiao controlled nearly 1,000 companies through the "Haiyin system", and they were involved in non-core financial license businesses such as private equity, fund sales, small loans, futures, guarantees, and factoring. It owns the U.S.-listed Hywin Wealth (NASDAQ: HYW) and the A-share listed Rock (600696.SH).
On the 2023 "Hurun Report", Han Hongwei and Han Xiao father and son are still on the list with a net worth of 6 billion yuan.
As an important component of the "Haiyin system", according to the official website, Haiyin Wealth was established in 2006 in the core area of Lujiazui, Shanghai, and stands among the well-known financial investment institutions at home and abroad. After more than ten years of development, the company has set up more than 170 wealth centers in more than 80 major cities in China, and has gradually deployed in United Kingdom, United States and other places. Hywin Fund Sales Co., Ltd., a subsidiary of Hywin Wealth, has the "Securities and Futures Business License" approved and issued by the China Securities Regulatory Commission. As of the end of 2022, Hywin Wealth has more than 2,500 employees, bringing together elites in various industries such as banking, securities, and trusts, as well as professionals with financial qualifications such as CFP and CFA, to provide comprehensive services such as asset allocation consulting, wealth management, and family offices for more than 146,000 high-net-worth individuals and institutions.
On the evening of March 26, 2021, Hywin Wealth was listed on NASDAQ. According to the prospectus, Hywin Wealth is the third largest and fastest-growing third-party wealth management service provider in China. Hywin Wealth disclosed in its prospectus that it is "the largest provider of real estate fixed income products in China", and "the products provided invest in real estate projects of well-known large-scale developers such as Evergrande and Sunac with good credit ratings, with a term of generally 6-36 months".
According to the financial report of Hywin Holdings for the 2023 fiscal year, as of June 30, 2023, Hywin Wealth has 185 wealth management centers, 1,749 financial planners and 46,627 active customers in 91 cities across the country. From July 1, 2022 to June 30, 2023, the company achieved net income of RMB2.092 billion, a year-on-year increase of 7.71%; net profit was RMB120 million, down 49.01% year-on-year.
After the news of the explosion of the Haiyin Fortune flag in December 2023, the share price of Hywin Wealth plummeted for several days, and in May this year, it received a delisting warning from the NASDAQ.
In fact, as early as 2021, when Hywin Wealth had a postponement of payment, it caused the industry to be vigilant. According to Xinhua Finance, Haiyin was deeply involved in the mutual finance business, and with the tightening of supervision, the group was deeply involved in loan disputes; With the adjustment of real estate, after 2021, its well-known private equity fund Wuniu Equity continued to thunder, and in July, it was disqualified as a private equity fund manager; In October 2022, Haiyin Assets, another private equity fund of the "Haiyin system", was also cancelled due to abnormal operation.
(This article does not constitute investment advice, and you do so at your own risk)
Bay Area Finance and Economics Comprehensive Daily Economic News, Securities Times, Xinhua Finance, China News Weekly, Shanghai Securities News, China Fund News, public information and other reports