More on Yang Dingguo Disappearance; Network of Credit Guarantees May Be An Issue

A few days ago, a major department store in Hangzhou shuttered: Hangzhou Department Store on Financial Street Closes Suddenly. The disappearance of owner Yang Dingguo (head of the Zhongdu Group) was given as the reason, and it was believed he fled ¥200 million in debts. Now that number is up 10 times. The latest figure comes from official records, but it may not be the final figure. One creditor said he believes the firm has ¥2 billion in debt and ¥1 billion in assets.

The article closes with a reminder on Hangzhou's network of credit guarantees. Any number of firms could be pulled into this crisis either because they guaranteed Zhongdu's debts or because Zhongdu guaranteed theirs. This news looks like nothing in the grand scheme of things and will be nothing if it is isolated, but it could also be pulling on the loose thread of a sweater.

杭州中都集团董事长杨定国跑路 留下20亿巨债烂摊子
Yang Dingguo left a final message outside the June 16 evening Hangzhou flights to Beijing, and then disappeared.

Yang Dingguo overwhelmed running, led to the outside of the huge financial hole behind him guessing.

As both chairman of Yang Dingguo, Hangzhou is well-known local entrepreneurs, both Group was established in 2002, is currently the main business of real estate, commercial department stores, hotels, Fushen special series ( Property Management , Real Estate, Novi garden, finance , etc.) of the four business units, its total of more than 20 wholly owned subsidiary.

The Yang Dingguo missing, reminiscent of some entrepreneurs in Wenzhou three years ago due to financial crisis staged foot chain tide events. So, in the end both the Group owed much debt?

2000000000 huge debts

For all of the Group's financial position, in addition to Yang Dingguo addition, Zhou Hong, the former chief financial officer of the Group are perhaps most clearly. However, both internal staff said over the years, has been to follow Yang Dingguo Zhou Hong, has been working in both groups, but recent weeks have group leaving from Rainbow.

Departure from Zhou Hong, Yang Dingguo now and then on foot, so that more and more of our employees are uneasy. Today, both internal staff, pointing to the company's financial concerns have been suspicions, and the group began to have a variety of self-examination.

"As of June 20, in both the Group's external debt of about 20 million, this figure is not everyone's guess, but the last two days, according to the certificate of financial statistics out of the room, and that this data is constantly changing." In Investment Ministry official said all groups.

It is reported that both owned by the Group, "both" trademark, has won three consecutive Hangzhou famous trademark, the group also has been awarded both the bank and the credit unit credit "AAA" grade enterprise. The main sources are the Group's financing, including bank loans, entrusted loans, trust loans, small loans, etc.; addition, Yang Dingguo and in both groups, but also to the internal employee fund-raising, as well as lending to the local population.

Reporters learned that on June 18, the day that Yang Dingguo on foot, in both the Group had a bank loan of $ 4.7 million to be repaid, but Yang Dingguo disappearance, also means that the loan becomes overdue. "Then, all of the Group due loans, there are many, Yang Dingguo this walk, other creditors such as banks, and will definitely come ahead dun." Are Group insiders said.

Guarantee crisis

Currently, the outside world can query all Group Public debt is three pen close ties with the capital market financing. That June 14, 2012, China Railway Trust is a trust in both the department provided $ 130 million loans for a period of 30 months, the level of annual yield of 8.7% to 11%. In addition, Ting Holdings (03398.HK) Announcements, December 24, 2012, the company through the Bank, to Hangzhou in both shopping centers to lend 30 million yuan, the period of 24 months, the loan interest rate is 18%. July 15, 2013, the Great Wall Trust Trust issued 50 million yuan in loans to Lin'an Properties Limited, the product term of 18 months.

Creditors Wu told reporters that he learned of the message is:. "Currently, Yang Dingguo debt of about 20 billion, but the value of all the Group's existing assets should be 10 million, the two meet, the funding gap, but also one billion yuan Yang Dingguo this one running, the problem becomes more complicated., both groups will accelerate the collapse. "

Right now, is how to find Yang Dingguo imminent. Many of our staff have hope, Yang Dingguo just lost phone contact, or in a bad mood shut down for two days, a few days will be able to return to Linping. However, they have prepared for the worst - in front of the clues to find the way out to the local public security authorities.

Jiangsu and Zhejiang, the capital, has always been a custom of financing guarantees, guarantees of extending outward these layers, and ultimately the formation of a large-scale security circles, in the end there is a drag on the number of enterprises affected by this guarantee, is still a mystery.

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