On February 7, Oceanwide Holdings shares were delisted from the Shenzhen Stock Exchange and delisted on the same day. The financial empire of Lu Zhiqiang, the former richest man in Shandong, collapsed. Photo shows on September 23, 2016, Beijing Oceanwide Holdings is building a US$ 1 billion commercial and residential comprehensive development project in downtown Los Angeles, California. (Mark Ralston/AFP)
[The Epoch Times, Chwefror 10, 2024](Interview and report by reporter He Jiaxing of the Epoch Times Special Topics Department) *ST Oceanwide was the first real estate and financial giant to delist in the new year. Its market value of RMB 100 billion was only 2 billion. The company was banned by the China Securities Regulatory Commission Filing a case. The financial empire of the legendary businessman Lu Zhiqiang collapsed.
On February 7, *ST Oceanwide (hereinafter referred to as Oceanwide Holdings) issued an announcement stating that the company’s shares have been decided to delist by the Shenzhen Stock Exchange and have been delisted from the that day’s list.
On January 26, Oceanwide Holdings received a “Decision on the Termination of the Listing of the Shares of Oceanwide Holdings Co., Ltd.” Shenzhen Stock Exchange. From November 30 to December 27, 2023, the daily closing price of ST Oceanwide’s stock on the trading system of the Shenzhen Stock Exchange was below 1 yuan (about US$0.14) for twenty consecutive trading days, triggering a mandatory withdrawal from the trading category. a decision was made to terminate listing in accordance with city regulations.
On the last trading day before the suspension, Oceanwide Holdings’ share price closed at 0.38 yuan per share (about US$0.053), a drop of nearly 90% compared to the staged high in September 2023. Only 1.975 the market value is one billion yuan (about 277 million US dollars).
Oceanwide Holdings also disclosed that the company’s chairman, Luan Xianzhou, received the “Administrative Penalty Decision” from the Beijing Securities Regulatory Bureau. Luan Xianzhou was fined more than 20 million yuan for insider trading and leaking inside information.
On February 5, Oceanwide Holdings issued an announcement stating that the company received a “Notice of Filing Proceedings” issued by the China Securities Regulatory Commission, Because the company is suspected of violating laws and regulations in information disclosure , in accordance with relevant laws and regulations , on January 26, 2024, the China Securities Regulatory Commission decided to investigate the company Filing a case.
He failed to reorganize and faced bankruptcy
In 2015, the total market value of Oceanwide Holdings was more than 100 billion. At the end of 2018, China Oceanwide’s total assets exceeded 300 billion yuan (about US$42.119 billion). In 2023, the losses of Oceanwide Holdings have been more than 34 billion yuan (about US $ 4.774 billion).
On April 27, 2023, Oceanwide Holdings announced that the Beijing No. 1 Intermediate People’s Court decided to initiate the company’s advance reorganization. On December 1, the pre-reorganisation of Oceanwide Holdings was terminated by the court because as a listed company, Oceanwide Holdings no longer has the possibility of reorganisation.
Analysts believe that this basically spells the end of Oceanwide, that is, it may face bankruptcy. The debt ratio is high, and the biggest fear is taking over a “bottomless pit.”
Oceanwide Holdings announced a plan to increase its holdings by 200 million in September 2023, which boosted the stock price. However, after the share increase plan ends on January 4, 2024, Oceanwide has only increased its holdings by 1,100 shares of the company, and the total increase in holdings is only 2,889 yuan (approx. US$405.61), which is well below the lower limit of the share increase plan.
Shareholders saw this as an act to cut off retail investors, and their last remaining thoughts about Oceanwide helmsman Lu Zhiqiang were dashed.
The actual ruler was once one of the ten richest people in China
Lu Zhiqiang, Oceanwide’s navigator, is from Shandong and graduated from Fudan University’s Department of Economics. In 1989, he founded Oceanwide Holdings, which was listed on the Shenzhen Stock Exchange in 1994. It was one of the earliest listed companies in China’s real estate industry.
In Beijing, Lu Zhiqiang developed Guangcai International Apartments, Minsheng Financial Center, and Oceanwide International Residential Area. In Shanghai, he created a new world of Shanghai Oceanwide. In Wuhan, Central China, he invested and built the Wuhan Wangjiadun Business District (CBD). At one time these were local landmarks.
Since 2014, Oceanwide Holdings has shifted its focus from real estate to finance, acquiring and merging financial assets such as trusts, insurance, securities, futures, mortgages, and asset management. It has full financial licenses as Minsheng Securities, Minsheng Trust, and Minsheng Futures. By 2020, Oceanwide Holdings’ industry classification will be changed from “real estate” to “finance”.
With the help of financial assets, the overall performance of Oceanwide Holdings has grown significantly since 2015. The company’s market value once exceeded 100 billion (about US$ 14.04 billion), second only to Vanke and Poly among share real estate stocks A. In the same year, Lu Zhiqiang became the richest man in Shandong with a wealth of 83 billion yuan (about US$11.653 billion).
In 2016, Oceanwide Holdings achieved revenue of 24.67 billion yuan (about US $3.464 billion), a year-on-year increase of 79.4%, setting a historical record for the company and reaching its peak.
Lu Zhiqiang entered the top ten of the Hurun Rich List in 2015 and 2016, surpassing Evergrande Group’s Xu Jiayin in terms of net worth.
At its peak, the Oceanwide Empire controlled and participated in 45 listed companies, including Legend Holdings, Alibaba, Gome Electrical Appliances, China Minsheng Bank, Guotai Junan, etc.
The collapse of the “Ocean-wide” financial empire.
Lu Zhiqiang’s Oceanwide empire was built on the constant use of capital and leverage, and the massive expansion caused Oceanwide Holdings’ debt to skyrocket. At the end of 2013, the company’s asset-liability ratio was 76.31%, rising to 86.60% by the end of 2018, and rising further to 87.51% by the end of 2021.
In 2017, the Chinese Communist authorities began to request divestment, which affected a large number of real estate companies and also affected Lu Zhiqiang. In 2019, Lu Zhiqiang had already felt the pressure of debt and started selling assets to make money, but failed to completely solve Oceanwide’s liquidity crisis.
In 2020, Oceanwide Holdings was involved in the Wuhan Golden Phoenix fake gold case, causing the group to lose more than 4 billion yuan (about US$562 million) that year. Under the CCP’s new coronavirus epidemic containment policy, Oceanwide Holdings’ losses continued to widen.
In February 2021, Oceanwide Holdings and its subsidiary Wuhan Company were sued in court by the Sino-British Yili Asset Management Company over an unpaid debt of 1.3 billion yuan (about US$183 million). Since then, Lu Zhiqiang has continued to receive lawsuits, and Oceanwide’s debt iceberg has become more and more exposed.
As of the end of 2022, Oceanwide has gone seriously bankrupt.
In January 2023, Minsheng Bank launched a lawsuit against its shareholder Lu Zhiqiang, the vice chairman of Minsheng Bank, to recover a debt of 7 billion yuan. Lu Zhiqiang’s hometown Shandong Hi-SpeedGroup also chased a debt of 2 billion yuan from him. The 3.471 billion shares of Minsheng Securities, the highest quality financial asset held by Oceanwide Holdings, were ordered by the Shandong Jinan Court to be auctioned to repay debts in February, and were finally auctioned by Guolian Group in December.
Oceanwide Holdings also actively or passively sold its shares in financial assets such as Minsheng Trust and Minsheng Bank, but it was a drop in the bucket.
In January 2024, Oceanwide Holdings and related parties were sued by the Tianjin Free Trade Pilot Zone Branch of Bohai Bank, and about 2.02 billion yuan (about US$284 million) of bank deposits under the company’s name were frozen and confiscation by the court.
Abolition of a business district with financial help
Lu Zhiqiang’s success in becoming bigger and stronger is due to the support of the Taishan Club, a circle of billionaire entrepreneurs behind him. Liu Chuanzhi, chairman of Lenovo Group, is the president of the “Taishan Club”, and more than ten business leaders including Sitong Duan Yongji, Wantong Feng Lun, Giant Shi Yuzhu, Baidu Robin Li, Fosun Guo Guangchang, Bubugao Duan Yongping and others are members from the Taishan Club. As chamber members, they use their resources to help each other.
Taishan Club has a quota for recruiting members. Wanda’s Wang Jianlin wanted to join, but he could only wait for the opportunity. At one time, Taishan members such as Lu Zhiqiang and Liu Chuanzhi financed Wanda Wang Jianlin to be successfully listed in Hong Kong.
In 2005, Lu Zhiqiang’s capital chain was affected because he acquired too much land, and Liu Chuanzhi helped him get out of the difficulty. When Liu Chuanzhi, Lei Jun, Sun Hongbin and others encountered financial difficulties, Lu Zhiqiang also stepped in to take the lead.
Lu Zhiqiang gave full play to the advantages of his network capital Whether it was related to real estate or switching from real estate to the financial industry, every step he took to build the Oceanwide Empire was supported by his friends in the circle business.
In 2021, the Chinese Communist authorities demanded that the club be disbanded. The Taishan Association was also dissolved. Under the CCP’s financial tightening policies and mandatory public-private partnership policies, the assets of billionaires that year have shrunk severely. Some of them went bankrupt, some had their debts restructured, and some were forced to retire. When Lu Zhiqiang needed help, none of his capitalist friends could save him.
In the New Year 2024, the once prosperous billionaire Lu Zhiqiang has become the subject of an operation, and the amount involved in the case is more than 8 billion yuan (about US$1.124 billion ), and is restricted from high usage.
Zhang Jinglun, a US financial commentator, told The Epoch Times on February 8 that Oceanwide’s bankruptcy and Lu Zhiqiang’s debt are a microcosm of China’s current economic ecology. Lame reforms have ended, and the tide of financial capital has receded, leaving behind a pool of mud.
Zhang Jinglun explained that private entrepreneurs and wealthy businessmen in the ideology of the Communist Party are untrustworthy. Although Lu Zhiqiang is a member of the Communist Party, even if his loyalty pleases the CCP, he is still a member of a dangerous capital group in the eyes of the CCP. The nature of the Communist Party does not allow private capital to develop and grow, which almost doomed the fate of Lu Zhiqiang and others. Unless the Communist Party is destroyed, there will be no real entrepreneurs in China, and the Chinese people will not be able to truly enjoy happiness and freedom. The fall of Lu Zhiqiang and his financial empire is the most typical example.
Editor in charge: Lian Shuhua#
#Oceanwide #Holdings #delisted #billion #dollar #financial #empire #collapsed #Real #Estate #Finance #Epoch #Times
