Wenzhou Shoe Enterprises Fall Into Credit Mire &Nbsp; Capital Chain Is Afraid To Break Again.

In September 23rd, another business owner fled the debt scandal, causing Wenzhou's "lending city" to suffer in panic.

On the night of September 21st, at the gate of Zhejiang Xintai group in Louqiao Industrial Park, Ouhai, Wenzhou, the creditors gathered for more money, and the police had to send police to maintain order.

According to people familiar with the matter, the chairman of Xintai group lost 800 million yuan in debt.

The boss of the enterprise has been running away because of repayment difficulties.

Such a dense phenomenon has attracted the attention of local regulators. On the one hand, they require banks to carry out risk self-examination to prevent the storm of debt evading from hitting regular financial institutions. On the other hand, they actively coordinate with creditors such as lending enterprises, guarantee enterprises and banks, so as to avoid early loan collection and make the capital chain of enterprises deteriorate.

"In fact, the missing owner of a borrower is not as serious as it has been in public opinion."

In September 20th, Zhang Hanjie, director of the Finance Office of Longwan District, Wenzhou, Zhejiang, spoke of the debtors and enterprises that were "missing" or "shut down" in the region because of usury. "This is mainly the labor pains that must be taken in the industrial pformation, and usury is also an important factor."

Longwan district is one of the three districts in the downtown area of Wenzhou. It is also a densely populated area of private enterprises.

In recent days, several officials of the Finance Office of the Longwan district government have gone down to the grass-roots level to visit financial institutions in the region.

Under the request of the banking regulatory bureau, a self inspection operation of financial institutions has been rolled out in Zhejiang. Some financial institutions in Wenzhou, Ningbo, Hangzhou, Jinhua and Taizhou have received notice from the regulatory authorities.

Some people will sort out the events of capital chain breaking due to the vortex of usury, and list an incomplete list.

In April, Jiangnan leather, Portman coffee, three flag group; in June, Zhejiang Tianshi electronics, debt owed about 70 million yuan; in July, gigantic shoe industry, debt owed about 100 million yuan; August, Jinchao electrical appliances, shoes shoes, Ningbo Tang Eagle dress, bor household appliances......

Rough summary, at least 20 more borrowers "run" incident occurred, causing a large number of creditors panic.

It was not until September 9th that the panic aroused by such acts was calmed down.

On the same day, on suspicion of illegal operation, Zheng Zhuju, the boss of the company, with hundreds of millions of dollars to escape, was detained by local police.

"When people catch up, there will always be a glimmer of hope. Otherwise, who will ask for money?"

The 49 year old Zheng Ju Ju was a legal representative of "Longwan home appliance" in the Longwan District of Wenzhou before the incident. She once took the general agent of GREE electric appliances in Longwan District of Wenzhou, and also ran SIEMENS, SONY, Haier, Panasonic, TCL, LG, Hisense, Mei and Konka.

According to the press survey, Zheng Zhu Ju was also suspected of usury and owed 280 million yuan of debt to creditors, including 180 million yuan in cash and 100 million yuan in bank acceptance bills.

"The financial chain breaking up caused by usury is now happening all over the country.

Zhejiang's private lending activity is obvious. Some are not unusual. Wenzhou is, after all, a wind vane of private finance. It is the most concentrated and advanced in terms of advantages and disadvantages.

Zhejiang, a financial regulator official said.

On the one hand, the regulatory authorities require banks to conduct self-examination. On the other hand, the local government actively smoothed the mood of banks, avoiding the early loan collection and worsening the capital chain of enterprises.

The Longwan District Committee of Wenzhou held talks on business, banks and Guarantee Corporation in August. Enterprises at the meeting said they should "stay away from illegal borrowing".

"The most difficult job at present is to build a crisis firewall to prevent a chain reaction."

Longwan District Finance Office Director Zhang Hanjie said.

For individual enterprises whose capital chain is in danger, the local finance office will help them negotiate with all parties and mobilize the enterprises guaranteed by the crisis to try to repay the loan according to the bank's requirements.

"Recently, capital supervision has been tightened. Not only the banking supervision system has been checked, but also the people's banking system has emphasized the declaration of capital loans and wind control."

In September 20th, a financial stability information liaison officer of a joint-stock bank in Zhejiang said that last Friday, another wave of self inspection action came to an end.

With the tightening of monetary policy, it is easy to borrow large and high interest funds from financing intermediaries.

A survey conducted by the Yueqing people's Bank shows that the daily interest rate of this high interest rate fund is as high as 3 per thousand -6 per thousand. In general, enterprises are only used to make loans for loans, and the term is very short.

"The rate of approval of bank loans has slowed down and the queuing time for enterprise loans has been extended."

Wenzhou Construction Bank credit officer said.

In order to cope with the urgent turnover needs, enterprises borrow high interest funds from the private sector, so that the chain of enterprise financing will be further weighed.

"This is a sharp contradiction with the current weakening of corporate profits, and has become the last straw for individual enterprises to be overwhelmed."

He said.

The investigation report of the local financial regulators for several months concluded: "from the enclosure behavior of the three flag group to the excessive financing of Tianshi electronics, the usurious behavior of private capital has directly affected the stability of the economy and finance.

We must crack down on usury and crack down on the evasion of financial debts.

In order to help these enterprises deal with the debt crisis, financial regulators have made all the stops.

Take the three flag group of Yueqing financial crisis as an example, Yueqing finance office, people's Bank and people's court have coordinated to deal with their bank debts.

However, as the three flag group is a large deposit holder, every day banks are competing for it, even at high cost, so that the owners are very conceited and unwilling to cooperate. It is bigoted that bank loans can be defaulted, and the guarantor should make advances for the secured enterprises, so that many coordination will not result.

The three flag group's mutual insurance and joint guarantee chain are complex, and the disposal of non-performing loans is difficult.

From early 2008 to June 2009, 7 banks issued loans to the "three flags" for nearly 100 million yuan, issuing about 270000000 yuan of acceptance bills, most of which were guaranteed by 3 enterprises such as Ji An.

After the outbreak of the "three flag" crisis, the guarantee enterprises agreed that the "three flags" could afford to repay and would not like to pay for loans until their assets were fully liquidated.

Because the guarantee chain is complex and interlocking, the management departments and banks are in a dilemma between maintaining economic stability and recovering loans according to law.

Subsequently, the Yueqing people's court disposed of the "three flags" property.

Three flag Industrial Park was pferred at a price of 47 million yuan, of which about 26000000 yuan had already returned many bank loans that were mortgaged by real estate and land, leaving about 20 million yuan to be allocated by the court and distributed to other creditors in proportion.

So far, the assets of the "three flags" in the field are still being disposed of.

The guarantee company believes that the "three flags" assets have not yet been liquidated and are unwilling to fulfill their repayment obligations. By the end of June 2011, the "three flags" still had 39 million 450 thousand yuan to guarantee that the loans were overdue.

If the three flag group's collapse is due to over investment and massive investment in real estate, then Tianshi electronics is caused by excessive financing and irregular high interest financing.

When the Tianshi electronic fund chain was broken, the outstanding balance of loans was 20 million yuan, the letter of credit was 30 million yuan, and the bank acceptance bill was 65 million yuan, involving 4 banks, involving 3 guarantee companies.

According to preliminary understanding, the company also borrows nearly 40 million of the society.