[Exclusive] Cedar Holdings Unit Director Goes Missing, Likely Linked to USD1 Billion in Raised Funds
Zhang Lihua
DATE:  Apr 13 2023
/ SOURCE:  Yicai
[Exclusive] Cedar Holdings Unit Director Goes Missing, Likely Linked to USD1 Billion in Raised Funds [Exclusive] Cedar Holdings Unit Director Goes Missing, Likely Linked to USD1 Billion in Raised Funds

(Yicai Global) April 13 -- Zibo Qixiang Tengda Chemical, an affiliate of the large institutional investor Cedar Holdings, said yesterday that it has been unable to its director, Chen Hui. He has been missing since October and his disappearance is likely linked to fundraising worth over CNY7 billion (USD1.02 billion), Yicai Global learned from a source close to the authorities.

“People related to the investigation of economic crimes summoned him because he was involved in pledge financing worth CNY7 billion between Guangzhou Rural Commercial Bank and Cedar Holdings Group and fundraising between Cedar and Shanghai Pudong Development Bank,” the insider added.

Qixiang Tengda announced that the company’s board still has eight directors performing their duties normally. Chen’s absence will not cause the number of board members to fall below the statutory minimum and will not affect normal operations of both the company and the board. The company’s business and management are all normal, it added.

According to publicly available information, Chen worked for China Construction Bank and Shenzhen Development Bank, now renamed Ping An Bank through a merger. Yicai Global also learned that Chen joined Cedar Holdings Group in 2003 and was among the group’s early senior members and headed its business of financing via formal channels.

Per corporate information platform Qichacha, Chen still serves as the legal representative of 14 firms affiliated to Cedar Holdings, all of which exist or are in business.

In November 2016, an affiliate under Cedar Holdings acquired Zibo Qixiang Tengda Chemical for CNY4.8 billion (USD698 million). Last May, Qixiang Tengda admitted to the stock exchange that in the years after it was acquired by Cedar Holdings, more than 80 percent of the business revenue of its domestic supply chains was fake.

Cedar Holdings was also a shareholder of Guangzhou Rural Commercial Bank through its affiliated institutional investor in 2011. But according to publicly available information in 2019, the affiliated institutional investor is no longer among the top 10 shareholders of the bank.

“Chen is very likely connected with Cedar Holdings’ CNY7 billion pledge fundraiser with Guangzhou Rural Commercial Bank and is also probably linked with the case involving Wang Jikang, former chairman of the bank,” the insider pointed out.

In July, 2019, Wang, former chairman and party secretary of Guangzhou Rural Commercial Bank, stepped down. A month later, the Guangzhou Municipal Commission for Discipline Inspection and the Municipal Supervision Commission said he was under investigation for suspected serious violations of discipline and law.

Chen’s disappearance may also be related to a trust fund from Shanghai Pudong Development Bank, Yicai Global also learned.

Tu Jiandong, Chen’s subordinate, also has been missing. Tu previously worked at a branch of SPDB before joining Cedar Holdings as an executive in charge of a subdivision of the group’s financing center, responsible for communicating with SPDB and reporting directly to Chen.

“In May last year, a number of Cedar Holdings executives were called in for questioning,” the insider added.

Editors: Shi Yi, Peter Thomas

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Keywords:   Zibo Qixiang Tengda Chemical