Henan Zhengzhou State-Owned Credit Guarantee Firm: Total Collapse

Chang Sheng Credit Guarantee received a ¥20 million investment from the Zhengzhou City Huiji District Finance Development Corporation. People invested with the firm because they believed it wasn't like private credit guarantee firms, you could rely on its security. As one investor told the reporter:
"I understand a bit myself and found Chang Sheng Guarantee indeed was backed by Huiji District government affiliated institutions equity security company, I think if there's government equity participation there should be no problem."
Mr. Wu decides to invest in a product that yielded 18% interest. Then in 2015:
Without telling investors, the Chang Sheng Guarantee dropped the interest rate to 5% for 3 consecutive months starting in January. After investors questioned the change, Chang Sheng Guarantee informed them that due to funding constraints it would temporarily pay 5 ‰, but would make it up later in the year. After March, not only was the interest not made up, but Chang Sheng Guarantee stopped paying the 5%.
It has turned into a total disaster:
Investors feel is not right, have to ask Huiji District Government. Under the coordination of Huiji District Government has repeatedly said Chang Sheng guarantees the principal and interest in full within the agreed time still on, but most did not materialize, so far, Chang Sheng guarantee funds strand breaks fact gradually surfaced.

June 19, after determining Chang Sheng guarantee fund chain problems, under the coordination of Huiji District Government, Chang Sheng guarantees and investors to develop a new payment scheme. The program shows that in August 2015 principal payment of 0.4%, September's 0.6% payment of principal, 10, 11, Dec. 2% of each payment, 2%, 3%, in 2015 a total payment of the principal amount of 8%. Monthly interest rate reduced from the original 18% to 5%. But in 2016 the principal payment scheme is no clear protocol called "according to operating conditions of the decision."

"Not only do not give the principal, interest are in arrears for several months. A few days ago, said Aug. 1 to a part of the interest, was delayed until August 17 and only to the five days of interest." Wu Yun Say.

Sine: 河南国资背景担保公司兑付危机:郑州担保模式全面崩塌

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