Money Money Has Shrunk For Half A Year, Nearly 90% Of The Last Lamentation Of Fortune Birds.

The history of an enterprise is a history of Finance and economics. Some are ups and downs, and some are short-lived.

HK:01819, once the shoe king, unfortunately belongs to the latter.

From a small workshop in the 90s of last century, we went to Hong Kong to go public in 2013 and then went bankrupt and liquidated in 2019. In a short span of 6 years, the bird of fortune came to the end of liquidation and dissolution from the high light of listing.

From the debt crisis to the bankruptcy liquidation process, we can find that the most fundamental reason leading to its destruction is the internal management of enterprises out of control, and the ignorance of business rules.

The fate of rich birds in bankruptcy and liquidation is the inevitable result of such behavior and psychology.

　 Violation guarantee, money money has shrunk by nearly 90% in the past six months.

By the middle of 2018, when the company went bankrupt and liquidated, there were 4 billion 515 million yuan assets on the book of "shoe king", and 3 billion 466 million yuan in liabilities and 76.8% in assets and liabilities.

At first glance, rich birds still have nearly 1 billion yuan of net assets; in fact, it is already in a serious state of insolvency at this time. The wealth of 4 billion 515 million yuan of rich birds has not only been seriously derogatory, but also a huge potential deficit.

From the financial data, at the end of June 2017, rich birds had nearly 5 billion 500 million yuan of assets. By the end of 2017, only 227 million yuan had been left for the money of rich birds, of which 165 million yuan was in a restricted state of pledged security, and the cash available was less than 100 million yuan.

In just half a year, the money of rich birds dropped from 2 billion 35 million yuan to 227 million yuan, a decrease of 1 billion 800 million yuan. The reason why such an unthinkable situation arises is that Fuli bird performs compensation for a series of warranties, but these guarantees have not been disclosed in previous years.

By the end of August 2016, the rich birds had pledged more than 600 million yuan to the 5 trading companies in Wenchang, such as shoes and clothing trade in Wenchang, Shi Na shoes and clothing trade, Ming Yu Trade, Yan Fang shoes and clothing trade, and the trade of elegant princess shoes and clothing, which were not announced publicly.

By the end of 2016, there was no external guarantee for 1 billion 106 million yuan and 1-4 months in 2017. The rich bird added 1 billion 70 million yuan to its external guarantee and failed to fulfill its announcement obligations.

From the point of view of the guarantee object, the registered capital of the secured party is relatively small, which is not in line with the larger loan amount, such as ConocoPhillips trade, the registered capital is only 1 million yuan, and the guarantee amount provided by the rich bird is as high as 548 million yuan.

The companies that accept the guarantee of wealthy birds have the same or similar registered addresses, most of them are located in Fulin mansion in Shishi; some directors, supervisors and senior managers of some companies have a coincidence situation (Table 1).

A lot of coincidences and unreasonable points are unavoidable to be questioned. Where does the fortune of the rich birds ultimately go?

There were rumors in the market that rich birds invested large sums of money in P2P and other fields.

In 2015, Fu Fu bird company, Fu Fu bird group, Fu Fu bird mining group and so on, through the Fu Yin financial information service (Beijing) Co., Ltd., invested in Shenzhen Zhong Rong Capital Investment Co., Ltd., holding a 80% stake, and the latter was the main operator of Ding Dong wallet. Ding Dong wallet was launched on 2016, with a total turnover of 100 yuan and a total turnover of 8 billion 500 million yuan. The number of registered users exceeded 2 million 500 thousand.

Since June 2019, Ding Dong wallet has been overdue, and investors have been unable to contact it.

In addition to Ding Dong wallet, the rich birds also invest in millions of dollars with Shenzhen fusion capital to invest in the Internet trading platform "win win society". The win win society focuses on providing small loans to natural persons.

It is not known whether the Fugu bird group has established a series of "Bag Companies" and used the credit of listed companies to conduct blood transfusion for its investment behavior. But this Bibi guarantee accumulated, increasing the compensatory pressure of birds of fortune.

By the end of July 2017, Fuli bird had been deducted at least 1 billion 615 million yuan from the bank for performing its compensatory liabilities, resulting in huge potential losses and capital chain breakage. It failed to honor the "14 riches and birds" bond interest in time, ignited the fuse and eventually triggered a financial crisis.

While cash is running off, there are also problems with accounts receivable and other receivables.

　 Illegal lending, most of the 4 billion 300 million receivables are bad debts.

In the case of "active" external guarantee, information disclosure is not carried out, resulting in a huge hole in the capital.

As at the end of June 2017, other receivables on the books of fortune birds were 1 billion 588 million yuan, most of which were loans to the previous trading companies, amounting to about 1 billion 216 million yuan (Table 2).

After that, the rich birds continued to provide funds for them. The amount of the loan was about 1 billion 200 million yuan, totaling about 2 billion 400 million yuan.

Therefore, if we consider the 1 billion 615 million guarantee that has not been disclosed before, but is deducted by the bank, the actual amount of other receivables should be around 4 billion 300 million yuan, most of which have become bad debts.

In addition, from the end of 2016 to the beginning of 2017, the rich birds purchased 200 million yuan of trust and financial products, and transferred 200 million capital from the listed companies through the way of trust loans. Finally, the 200 million yuan investment principal was also totally wasted.

In the 2015-2016 year, the lucky birds earned 2 billion 31 million yuan and 1 billion 492 million yuan respectively, and realized net profit of 530 million yuan and 217 million yuan. The operating income and net profit in 2016 decreased by 26.55% and 59.16% respectively.

In 2015, the net cash flow of fortune birds was only 180 million yuan. The net cash flow of rich birds in 2016 was -5 billion yuan, due to a significant drop in revenues.

In the first half of 2017, fortune birds achieved 412 million yuan in business income, down 48.09% compared to the same period last year. Net profit was -0.11 billion yuan, and net cash flow from operating activities was further reduced. The capital of the rich birds has been very nervous, mainly relying on bank loans to finance and maintain the balance of cash flow.

Under such a state of operation and financial strength, rich birds even get more than 4 billion yuan of funds under the eyes of their actual controller Lin Heping family. The reason is puzzling.

One conjecture is that these funds that are "acquired" from listed companies or through the trading company "transit station" are used by Lin family as investments in P2P or other areas.

But without exception, listed companies will not be able to recover this huge sum of money, leaving only "chicken feather".

In August 2016, when the Hong Kong Stock Exchange stopped trading, its market capitalization was still about 5 billion yuan, sitting on 2 billion 35 million yuan in cash, 5 billion 453 million yuan in current assets, and the asset liability ratio was relatively low.

According to the analysis of the foregoing, the rich family actually controls the three families of the forest family through illegal guarantees, illegal lending and foreign investment, so that the rich birds can not recover about 4000000000 yuan in cash. These behaviors occurred mainly in the period of 2016-2017 years.

In addition, other assets such as accounts receivable, inventory, fixed assets and so on, have different degrees of impairment and loss, the amount is about 900 million yuan.

That is to say, the rich bird deducts about 2 billion yuan of assets other than money and other receivables, and the assets that can be realizable are not more than 1 billion yuan. At that time, the debt of the rich bird is 3 billion 466 million yuan.

For the rich and precious creditors, a war around the property of the rich and precious birds is about to begin.

　　 Twists and turns, from reorganization to liquidation

As a "Star" enterprise in Shishi, the fortune bird has started to go bankrupt and liquidated. It has attracted the attention of the local government and many stakeholders. The game between different creditors has been repeated. The focus is on maximizing their own interests.

Generally speaking, when an enterprise enters bankruptcy, it needs to pay off 5 kinds of debts: debt formed by guarantee, bankruptcy expenses and common interest debts, employee debt (wages owed to workers, labor insurance expenses and resettlement expenses), arrears of taxes and general debts.

The first three parties will give full priority to the full payment, and then pay the taxes and general debts in arrears. When the general debt is paid off, the creditor will enjoy different liquidation rates according to different claims. For example, creditors whose debts amount to less than 100 thousand yuan can generally be paid off in full or higher proportion. Creditors with a large amount can only get a small proportion of their debts.

In particular, the debts formed by the guaranty birds are mostly deducted by the banks ahead of time, and the secured creditor's rights have the priority of repayment. Basically, they can be fully paid off. The interests game of the rich and precious creditors is mainly concentrated among the ordinary creditors.

The common creditors of rich birds are mainly composed of three categories: banks, loans amounting to about 500 million yuan; 14 "rich and precious birds" and "16 riches and honour 01" bondholders, the total bond principal amount is 2 billion 100 million yuan; and the daily business related parties, such as upstream suppliers, downstream dealers, and so on, rich birds owe about 300 million yuan.

Because the rich bird is the core business of the rich bird group, the bankruptcy of the rich bird is likely to bring the fortune bird group to the edge of danger, and then cause a series of problems.

Therefore, the local government also joined the war quickly. Shishi led the leader of the liquidation group of the rich birds (the liquidation team became the bankruptcy administrator of the rich birds), which made the main body of the profit seeking more diverse and the situation more complicated. Combing down, the focus of multi stakeholder game lies in three aspects. In this process, the parties are united and divided, and the game continues.

One is liquidation or reorganization?

According to the provisions of China's bankruptcy law, when an enterprise enters bankruptcy, there are three ways of liquidation, reorganization and reconciliation. Liquidation is based on the dissolution of bankrupt enterprises; reorganization and reconciliation are based on debt restructuring and the introduction of investors to save bankrupt enterprises.

Obviously, reorganization and conciliation are more attractive to corporate creditors. After all, there is hope for debt recovery in the future. The bankruptcy of rich birds is the reflection of this idea. After two rounds of reorganization, the birds and birds chose liquidation only third times. The whole process is full of twists and turns.

In July 2018, the governor of fortune bird applied for the first reorganization. At this time, the assets of fortune birds are only 447 million yuan, mainly including inventory, equity investment, machinery and equipment, and 292 trademark rights and 52 patents. The total debts of the birds are as high as 3 billion 466 million yuan.

The main content of the first reorganization plan of the rich birds is to introduce strategic investors, who invest 165 million yuan in cash and 60 million yuan in shopping coupons, which are used to pay the creditor's rights of ordinary creditors. After the completion of the reorganization, the rich and precious birds continue to pay their debts and tax claims. The rate of liquidation is 100%, and the shares held by the rich and precious birds are not handled or adjusted.

According to the reorganization plan, the rate of liquidation of ordinary creditors is about 2.7% (slightly higher than the 2.5% liquidation rate of bankruptcy liquidation), of which cash is about 1.1%, and shopping vouchers are about 1.6%.

If a rich bird's creditor holds 100 million yuan of debt, it can only get 2 million 700 thousand yuan in liquidation. In the 2 million 700 thousand yuan settlement, only 1 million 100 thousand yuan in cash, the remaining 1 million 600 thousand yuan coupons, used to buy rich bird shoes.

The restructuring plan of rich birds is, in a nutshell, the loss of the common creditors of rich birds, such as banks and bond investors.

The investor, who was introduced into the reorganization plan, decided to close up the debt of nearly 3 billion 500 million yuan by 225 million yuan, and also considered the future sales of fortune bird products.

Such a reorganization plan is obviously lacking in sincerity. The key is to let the large shareholders of fortune birds escape the "final punishment" and obviously will not be recognized by ordinary creditors.

In May 9, 2019, the conference of creditors of the birds of fortune first rejected the reorganization plan.

In June 29, 2019, the manager adjusted the reorganization plan and made a comeback and began the second impact. The main adjustment of this plan is to change the way of liquidation from mixed liquidation to full cash payment and no longer use coupons.

But the investor has made another arrangement, and the amount paid is determined by the creditor's choice of different liquidation period.

If the creditor chooses all the 6 months' repayment period, the investor pays the consideration price of 228 million yuan. If the creditor chooses all the 2 years' liquidation period, the reformed investor pays the consideration between 228 million yuan and 240 million yuan. This means that the creditor will receive a higher repayment rate if he chooses the later payment, but it can only exceed 8.7% of the payable amount.

This is still a lack of sincerity. If we say that the rate of repayment of employees' claims and tax claims is 100%, it is understandable that the adjustment of the shareholders' rights and interests of rich birds is the most difficult part of the whole plan.

The most important reason for the reason that the lucky birds fall into bankruptcy is that their major shareholders ignore the rule of corporate governance, despise supervision rules and despise commercial ethics. What is the reason why shareholders do not bear the main responsibility and even assume the main responsibility of a large number of ordinary creditors?

As expected, the second creditors meeting of rich birds still rejected the reformer plan put forward by the manager. In accordance with the provisions of the bankruptcy law, the Quanzhou intermediate people's court finally decided to go bankrupt and liquidate the rich birds. The efforts of the government of Shishi have been lost.

Secondly, the judgement of the effectiveness of guaranty acts.

The core and key of bankruptcy work is to confirm bankruptcy property as much as possible, so that the solvency of creditors can be increased.

If the previous acts of illegal guarantee by the rich birds could not be identified as effective, then it meant that the rich birds did not have to assume the responsibility of guarantee, and the banks needed to return the funds that had been deducted.

Around this starting point, the bankruptcy administrator of Fu's bird makes a complaint. However, compared with the tit for tat atmosphere of creditors in reviewing the reorganization plan, this measure is more of a "helpless struggle".

Rich birds provide the target of violating security, most of which are trading companies. The characteristics of these companies are highly similar to those of "Bag Companies". For this reason, the manager requests the Zhangzhou Banking Regulatory Commission to identify these companies as shell companies.

The logic is that if it is identified as a shell company, it means acceptance of the loan verification work of the secured bank is not in place, and the loss should also be borne by itself.

If this conclusion is established, it will be a subversive result for the birds of fortune. But for banks, it means that they have to shoulder heavy losses.

No accident, the Zhangzhou banking regulatory branch finally thought that it was impossible to determine whether Guarantee Corporation was a shell company. Therefore, fulfilling the compensatory duty of Fuli birds is still necessary.

Similar games also take place in the identification of other guaranty responsibilities, and the result is that the birds should be held responsible.

Thirdly, the judgement of the validity of asset mortgage.

If the judgment of the validity of the guarantee act is a game between the government and the ordinary creditors of the rich and precious birds in the interest of common interests, then the judgement of the validity of the asset mortgage behavior is a direct interest conflict between the two parties.

On the eve of entering the bankruptcy proceedings, the rich birds gave their 285 trademark rights to Shishi lion city Guarantee Corporation (hereinafter referred to as "Lion City Guarantee Corporation"). The reason for the pledge is to provide an anti guarantee for the 150 million yuan loan of the fortune bird mining industry, that is, when the lion city Guarantee Corporation provides financing guarantee for the rich and precious birds mining industry, the rich bird gives the lion city Guarantee Corporation the counter guarantee.

Lion City Guarantee Corporation has two shareholders, all indirectly controlled by the Shishi Finance Bureau. If Fu Gui bird mining can not repay this part of the debt as scheduled, the trademark will be made to the lion city Guarantee Corporation, and ultimately to the government of Shishi.

In addition, the rich birds also used related land property, machinery and equipment for further counter guarantee, amounting to 98 million yuan and 17 million yuan respectively.

Prior to that, the fortune bird group sold some of its land at 383 million yuan to the Shishi land storage center, which was used by the government to collect and store land. The land that is collected and stored is the main production and Management land of the rich birds.

It is worth pondering over the arrangement of these two things.

At the time of bankruptcy and liquidation, the assets of rich birds were only 400 million yuan, and the most important assets should be their trademarks, such as machinery and equipment, inventory and other assets.

But if trademark and land combine into one, it is very easy to recreate a new "rich bird". The local government, through various means, firmly controls the core assets of rich birds.

On behalf of Guotai Junan's pleading, the ordinary creditors of the rich birds represent the rich and precious birds and Lion City Guarantee Corporation to the court. In order that the rich and precious birds are not the ultimate practical users of the 150 million yuan guarantee loan funds, they apply for the cancellation of 17 million yuan for the reverse equipment guarantee for the purpose of providing free guarantee.

The request of Guotai Junan was finally rejected by the two courts of Shishi and Quanzhou.

Who is the winner?

From the whole bankruptcy process, the biggest loss is its large number of ordinary creditors, especially the investors of 2 billion 100 million yuan bonds.

Theoretically, the liquidation rate of Fu's bird's bankruptcy liquidation is 2.5%, but in fact, the income of these machines, stocks and accounts receivable can't be much more uncertain.

In October 9, 2019, fortune bird bankruptcy administrator made the first auction of the bankrupt property such as receivable prepaid debt, inventory, long-term equity investment, fixed assets and intangible assets in Ali's judicial auction platform, with a starting price of 283 million 700 thousand yuan (Table 3).

During the auction, 91 people set up a reminder, more than 6000 onlookers, but no one entered the auction, the first auction auction.

In October 18th, the manager made second auctions, and the starting price was 20 percent off lower than the first time, and dropped to 227 million yuan. Aside from the number of onlookers, most of the assets are still raging. The prospects for repayment of ordinary creditors are not optimistic.

For the local government departments, through a series of positive measures, the most important trademark assets and the most valuable land and real estate assets of the rich birds are preserved, which not only maximizes the security of their borrowing, but also lays a good foundation for the reinvention of a new "rich bird" in the future.

It should be said that the local government has achieved its lowest aspirations.

As for the family members of the rich birds, the rights of the rich birds have returned to zero because the reorganization plan has not been approved by the creditors' conference.

Today, the founder of the bird of wealth, Lin Ping has been listed as a high consumption restriction personnel. The co-founder Lin Guoqiang died unexpectedly in June 2017. In December of that year, Lin Guoqiang's son renounced his father's property in order to avoid carrying huge debts.

What is worth paying attention to is, where did the fortune 40 go through the various ways from the listed companies before the family owned by Lin family?

　　 There are internal causes for success or failure.

Since the beginning of 2001, the development of China's brand apparel industry has begun to accelerate. All kinds of brands have been flourishing, and a large number of "birds" have been born.

Among these brands, fortune bird landed on the Hongkong capital market in 2013 and is listed among the Hong Kong stock exchange.

In recent years, many clothing and footwear companies have been operating under the influence of macroeconomic. Expensive birds are not expensive, Taiping birds are not peaceful. Since its listing, fortune birds have begun to "change their faces".

In 2015, the profits of fortune birds declined for the first time, further declined in 2016, and began to stop trading in August 2016 until bankruptcy liquidation. After the listing of fortunes, fortunes reflect the difficulties of business management to a certain extent.

But it is too simple to attribute the decline of the birds to the external environment. Although the decline and fall of the rich and precious birds are influenced by their external environment, their fate is still determined by their internal causes.

In the short span of 3 years, the rich and precious birds actually control the family's credibility, so that more than 40 billion yuan of funds are taken away from the listed companies.

Finally, because the "14 riches and birds" bonds sold back to maturity, the rich birds and their joint guarantors Lin Heping family failed to pay the principal and interest on time, which led to the concentrated outbreak of the problem.

The fundamental reason for the failure of the rich bird bonds to default is that the Lin family has emptied the listed companies through illegal, secured, illegal lending and foreign investment and other malicious, simple, and crude irregularities. The whereabouts of this fund is still a mystery.

After being drained, the listed companies left behind only a small amount of assets and huge debts. From the results of bankruptcy liquidation, this bitter fruit will be swallowed up by many financial institutions and bondholders.