1 Year Later: HFIG Executives Detained, Credit Guarantee Chaos

Government owned Hebei Financing Investment Guarantee (HFIG) officially defaulted over a year ago, but losses are still being uncovered. The firm is conservatively estimated to have guaranteed 50 billion, against 4.2 billion in capital, exceeding the regulatory limit of 10 times leverage. The trust industry has lost trust in the entire credit guarantee industry, putting it in an even greater state of crisis. Meanwhile, as cases work their way through court, some investors have yet to see a single penny of their investment returned.

Hexun: 一年多前遭河北融投违约 历经法律程序至今分文未得
Sina: 河北融投再起风波 担保业乱象频现
HFIG's critical situation is still fermenting. Recently there have been news that the HFIG senior personnel was detained, so this was a creditor of the debt collection company queued deeper into a critical situation, and for the expansion of the business behind the ultra-times guarantee violation again by the market concerned, Reflected in the security industry chaos once again a hot topic.

Recently, news that, as of now, the former party secretary of Hebei Rong Li order to vote, a subsidiary of Hebei Rong Ma Guobin, general manager of investment guarantees, as well as chairman of its guarantee business Cathay Pacific Group Pengguo Chang, chairman Zhang Yingjie Jialong Tech have been taken in for questioning. When Beijing Chinese Commercial News reporters Xiang Xiang and Guan Renshi verify the news without comment.

However, some analysts said the rise was taken in for questioning normal, because the financial investment has been mired Hebei breach whirlpool for nearly two years, many creditors are calling for regulators to solve the problem.

As China's second-largest security company, Hebei financial investment event dates back to 2014. In July 2014, before the financial investment in Hebei secured capital projects Haicang legal representative Jiang Tao to bring 400 million yuan of funds fled, pressed Hebei melt cast default "switch." Subsequently, Hebei financial investment and then another exposed more than information management products can not be fulfilled the guarantee liability for breach of contract disputes, guarantees the company into turmoil, financial institutions and investors together to be dragged into the abyss.

Up to now, the amount of external guarantees Hebei Rong vote conservatively estimated at 500 billion yuan, involving banking, trust, fund, P2P, a total of more than 50 financial institutions, bank funds at least 200 billion, but the company has lost its ability to guarantee.

In fact, the amount of financial investment and Hebei had also secured beyond its capabilities. According to business information, the company registered capital of 4.2 billion yuan, according to relevant regulations, the balance of the financing guarantee liability shall not exceed 10 times the net assets, financial investment and that is up to Hebei with only the ability to guarantee 42 billion yuan.

...Compared to banks, trust companies trust in the security industry has probably been destroyed. Liaohe Kai said that the original trust very concentrated and Hebei financial investment cooperation, and other security agencies are straggling. Hebei financial investment because of high rating, a large scale, personnel, strong comprehensive strength, have more local and surrounding resources, trust companies, and some of them want to contact with SMEs, to be ten million project, found himself hardly channels equivalent to needle in a haystack, Hebei financial investment is a very good bridge.

  "But after this incident, the trust industry may be difficult to have such cooperation with the security industry, unless risk control particularly good, but it will not carry out a large area of ​​the business." Liaohe Kai said.

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