(Source: 21st Century Business Herald 2024-01-06)
Recently, Zhongyuan Trust Co., Ltd. (hereinafter referred to as "Zhongyuan Trust") won the second instance with a 1.65 billion yuan debt.
In the second instance judgment, the Henan Higher People's Court basically upheld the first instance judgment content, ordering the borrower Shenzhen w88 online live casino Venture Capital Co., Ltd. (hereinafter referred to as "w88 online live casino") to repay the principal of 1.097 billion yuan and interest of 180 million yuan to Zhongyuan Trust, and the penalty interest, compound interest, and liquidated damages of about 370 million yuan, with a total amount of 1.65 billion yuan.
However, the realization of the debt may still need to be crossed a considerable distance.
The reason is that during the second instance, w88 online live casino's bankruptcy application had been accepted by the court. After learning the judgment, w88 online live casino has applied to the bankruptcy administrator, requesting the suspension of the confirmation of Zhongyuan Trust's rights, and the bankruptcy administrator shall file a retrial with the Supreme People's Court on behalf of w88 online live casino in accordance with the law to safeguard the legitimate rights and interests of w88 online live casino and other general creditors.
Lou Qiuran, assistant dean and associate professor of the School of Law of the University of International Business and Economics, told the 21st Century Business Herald reporter that the judgment has not yet taken effect since w88 online live casino Company filed a retrial application to the Supreme People's Court.
Borrower has been filed for bankruptcy
This financial loan dispute can be traced back to 4 years ago.
Public information shows that w88 online live casino is a venture capital company engaged in direct investment in high-tech industries and other technological innovation industries, investment consulting business, direct investment or participation in the construction of enterprise incubator.
In December 2018, w88 online live casino and Zhongyuan Trust signed a "Trust Loan Contract", which stipulated that Zhongyuan Trust would issue 1.1 billion yuan of working capital loans to w88 online live casino for w88 online live casino to repay the debts of financial institutions and purchase goods. The total loan term is 36 months, the annual loan interest rate is 9%, and the actual investor of the trust loan funds, Zhongyuan Bank Luoyang Branch.
To guarantee this loan contract, Huang, the actual controller of w88 online live casino, provided joint and several guarantees for the loan, and w88 online live casino provided pledge guarantees to Zhongyuan Trust with approximately 100 million shares of Tianyin Communications Holdings Co., Ltd. (hereinafter referred to as "Tianyin Holdings") held by him and the stock derived income. After the loan contract expired, w88 online live casino and the guarantor did not repay the loan as promised. In May 2023, Zhongyuan Trust filed a lawsuit with the Zhengzhou Intermediate People's Court of Henan Province, and added the actual investor of the trust loan funds, Zhongyuan Bank Luoyang Branch, as a third party to participate in the lawsuit.
The first instance court quickly made a judgment, ruling that w88 online live casino should repay Zhongyuan Trust's principal of 1.097 billion yuan and interest of 180 million yuan, and the penalty interest, compound interest, and liquidated damages of about 370 million yuan, totaling 1.65 billion yuan, and the guarantor shall bear joint and several liability for this. After the first instance judgment, the defendant appealed to the Henan Higher People's Court, and the second instance court basically upheld the first instance judgment.
During the second instance, the borrower w88 online live casino's bankruptcy application has been accepted by the court. In August 2024, the Shenzhen Intermediate People's Court of Guangdong Province accepted the creditor's bankruptcy application for w88 online live casino and appointed Shenzhen Jindaan Liquidation Affairs Co., Ltd. as the administrator of Shenzhen w88 online live casino Venture Capital Co., Ltd.
In this regard, after learning the results of the second instance judgment, w88 online live casino stated that it had submitted an application to the bankruptcy administrator, requesting the suspension of the confirmation of Zhongyuan Trust's rights, and the bankruptcy administrator, on behalf of w88 online live casino, filed a retrial with the Supreme People's Court in accordance with the law, to safeguard the legitimate rights and interests of w88 online live casino and other general creditors.
Pledged equity worth over 1 billion yuan has become the focus of debt realization
Lou Qiuran said that w88 online live casino applied for a retrial to the Supreme Court for the purpose of protecting the rights and interests of general creditors.
"From the practical point of view, after the enterprise initiates the bankruptcy procedure, the bankruptcy administrator applies for a temporary suspension of the recognition of the creditor's rights, which occurs from time to time, because the pledged creditor's rights have priority and will be given priority to the general creditor's payment. This is an act of protecting the legitimate rights and interests of other general creditors. If the Supreme People's Court's retrial changes the judgment on issues including the amount of the debt, the necessity of this temporary suspension of confirmation will be highlighted." Lou Qiuran further explained.
Dr. Yang Xiang, chief architect of Zhonglun Borong’s strategic charity and wealth inheritance team, told the 21st Century Business Herald reporter that in financial loan litigation, the focus of litigation often focuses on interest, liquidated damages, etc. w88 online live casino filed a retrial with the Supreme People's Court, with the purpose of seeking to reduce the burden of debt interest, especially for the huge liquidated damages and penalty interest of up to 400 million yuan.
Yang Xiang told reporters that as an enterprise that has been accepted for bankruptcy, its ability to repay debts is worrying. Whether the 100 million shares of the pledged property can be realized will become the key to creditors' realization of their claims.
The important collateral of this financial loan contract is the 100,473,933 shares of Tianyin Holdings held by w88 online live casino, accounting for 9.80% of Tianyin Holdings' total share capital. The enterprise warning sign shows that Tianyin Holdings' top three shareholders are: Shenzhen State-owned Assets Supervision and Administration Commission (19.03% of the shares), Shenzhen Investment Holdings Co., Ltd. (19.03% of the shares), Tianfutong (9.8% of the shares), and the company's controlling shareholder and actual controller Shenzhen Investment Holdings Co., Ltd. and Tianfutong are joint actors.
From the market value of this share, it has been stable overall and slightly higher. As of press time, Tianyin Holdings' share price was 10.91 yuan per share, and the current market value of the shares is approximately 1.091 billion yuan.
From the risk of the auction of this shares to Tianyin Holdings, Tianyin Holdings pointed out that if the above shares are subsequently transferred for judicial auction or other forced transfers, there is a risk of change in the proportion of the voting rights of Tianyin Holdings shareholders over the company. When asked whether Tianyin Holdings can take protective repurchase measures to maintain the stability of the company's control, Lou Qiuran told the 21st Century Business Herald reporter that the repurchase that is just to ensure that the company's control remains unchanged is not a situation explicitly stipulated in the share repurchase rules of listed companies.
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