Regulators Rush To Stop Private Lending Of Trust And Blood Pfusion

Green City Trust "investigation door" surprised another version.

"A lot of trust products produced by Lvcheng or in order to return to the public.

Capital hungry Greentown has been issued only in the first half of 2011.

Prior to this, regulators have begun to be very vigilant against funds from banks or other financial institutions, or are playing the risk of private lending bridge funds.

In the third quarter of 2011, Liu Mingkang, chairman of the China Banking Regulatory Commission, warned that "in the future, we should pay more attention to the behavior of making huge interest in usury."

Analysts believe that the supervision of regulators to increase or highlight the supervision of the Banking Regulatory Commission to try to cut the trust capital flows to the bridge of private lending, and strictly guard against the risk of the banking system pferred to the system's determination.

A few days ago, many trust companies received a notice issued by the CBRC on the investigation of trust business between the trust company and the Greentown group and related enterprises, and attached a survey report.

A person close to the CBRC also confirmed to reporters that "something happened".

The green city, which has long been reluctant to talk about funding problems, has also chosen to respond positively.

"Green city and safe cooperation issue trust products, not lack of money to borrow" usury ", green city is short of money, but what is missing is the money to buy land.

3900.HK, executive vice chairman and executive chairman of the green city, said publicly about the media.

The rapid development of enterprise scale by high debt operation has always made green city much questioned.

Green city China 2011 China Daily reported that the net assets and liabilities ratio of Greentown group reached 163.2%.

Shou Bo has repeatedly stated publicly that green city will reduce its net asset liability ratio to a relatively reasonable level in the next two or three years.

"Issuing fund trust products will be one of the attempts of green city to reduce its debt ratio."

According to incomplete statistics of Puyi wealth, in the first half of 2011, green city issued a total of 20 trust products through Ping An Trust, Zhonghai trust, Zhongtai trust and many other trust companies, with a scale of up to 9 billion 160 million yuan.

Analysts pointed out that in this year's increasingly stringent property market restriction policy, the sales situation of Greentown is worrying.

At the end of the first half of the year, the total loans of the Greentown group reached 35 billion yuan and the net assets liabilities ratio was as high as 163.2%.

At the same time, the sales of green city did not give in to high debt management: in the first half of the year, the total sales volume of 72 sales items reached 20 billion 300 million yuan, and only 37% of the annual sales target was achieved.

Shou bentin also said that the green city development is positioned as high-end residential, the layout of the region is mainly based on the high price of the first tier cities, the "purchase restriction" policy is more serious, at present, it is difficult to complete the annual sales target of 55 billion yuan.

Regulators warn risks

Is the fund raised through trust projects really served as a bridge loan for high interest social loans when the capital of Lucheng is extremely tight?

In fact, in addition to the massive trust financing, the green city already had a "curve" financing case.

As early as in 2005, the Greentown group raised funds for the "Jinsha port" project by entrusting the trust company to handle the fund trust, and used the fund to the "Jinsha port" project. The green city's "cloves apartment" project also used this kind of financing method, the annual yield of each financing is different, the highest has reached more than 15%.

Regarding the internal fund-raising, the green city has issued an internal document. The main content is: due to the need for the development and construction of item company under the Greentown Holding Group Co., Ltd., the Greentown Holdings Limited company intends to carry out phased financing. Greentown employees need to report the list and amount of the contributive personnel through the trade union group of their units and departments, and sign the contract of entrustment with the group labor union.

Zhang Yin, chief analyst of tiger investment in Beijing, a real estate listed company, believes that compared with other housing companies, the unique feature of Greentown is the existence of private lending. "5 years ago, Greentown began to appear in private lending. Although many housing companies are engaged in private lending, there are not many behaviors such as Greentown lending and trust financing.

The tension of capital chain has always been the biggest feature of Greentown, and this trust financing is only a pition. The biggest possibility is to repay the gap between private lending and lending.

Zhang Yinyi endorsed the statement of the insider.

"China business" reporter on this point to Greentown group to verify, green city China Dong Feng Feng acknowledged that the Greentown group did have a number of internal financing behavior, but Feng told reporters that "green city listed companies have nothing to do with."

For private lending and high interest financing behavior, Feng Zhengjun denied.

Continuation loan pfusion technology

"Some real estate enterprises have expanded rapidly in recent years. When financial resources can not keep up with time, some enterprises will borrow high interest funds, including private lending and foreign capital high interest debt, which are almost all above 20%."

The head of an investment company in Hangzhou said that the use of development loans to replace the high interest capital borrowed before was undoubtedly a shortcut for the green city to crack down on financing difficulties.

According to previous media reports, in May 2009, Greentown redeemed the principal interest rate of 400 million dollars in advance with a price of 15% off, and the debt of the 9% interest rate was originally due to expire in 2013. There is a breach in the green city. First, the net asset liability ratio is as high as 140%, exceeding the relevant stipulations. Two, the terms of the bond limit the proportion of the investment scale of the green city to the joint venture company is larger than the Convention.

According to the terms of the issuance of bonds, if the green city fails, the bondholders can ask the green city to redeem the bonds in advance in June 2009.

In this regard, green city China said in its announcement that the capital needed for early redemption of high interest debt mainly came from its internal resources.

Shou Beng explained that the blue money project in Hangzhou, apart from 2 billion 100 million yuan of bank loans, is self owned capital, and the trust product has 1 billion 500 million yuan into the project, which represents the company can take 1 billion 500 million yuan and high interest debt from the capital.

Similarly, the trust product of Taihu new town project in Wuxi invested 500 million yuan, and the company can pay 500 million yuan from the 800 million yuan investment.

Obviously, relying on low cost development loans and trust products financing, "green city" has solved the risk of high interest loans.

"High debt and high growth" has also become the financial technology label of Greentown.

Liu Mingkang's previous speech at the third quarter analysis conference of the CBRC in 2011 also showed that private lending and other financing methods were high voltage lines that housing companies could not touch.

"There are some state-owned Guarantee Corporation in coastal areas such as Zhejiang. Financial companies use state owned bank funds to sneak up usury. These actions should be strengthened by making use of bank low cost credit and engaging in usury to earn huge interest."

Liu Mingkang said that because of the strong demand for credit, some Guarantee Corporation, investment companies and consulting companies have switched to the usury business, and a large part of the loan funds come from banks. They are loans from banks to large enterprises. These companies take advantage of management loopholes and fictitious projects of large enterprises to acquire low-cost loans from banks and secretly borrow usury to get the difference.

Liu Mingkang said that the CBRC will strictly manage the list management of development enterprises in the future. The development of loans must be secured as a construction project, not on the loan of developers.