I used alcohol to offset employee wages.

Previously regarded as a "god in the eyes of Yihua people", on January 22, Jiang Yuanhua, the former party secretary and chairman of Hubei Yihua Group, was officially announced to be under organizational review for suspected serious disciplinary violations.

This municipal state-owned enterprise with two listed companies ranks 193rd among China's top 500 companies. Two years ago, the media publicly exposed that the company used wine to pay employees' wages, offset supplier accounts, and owed employees tens of millions of hard-earned money.

Jiang Yuanhua entered the company at the age of 22, started as a technician, and was promoted to chairman at the age of 35. Under his leadership, Hubei Yihua's sales revenue soared from 3.6 billion to 40 billion, but it has continued to suffer losses in recent years, especially in the third quarter of this year, when the net profit dropped to -12.

The official website of Yihua Group shows , which evolved from the Yichang chemical plant founded in 1977, is funded and supervised by the Yichang Municipal State-owned Assets Supervision and Administration Commission, and is a key municipal enterprise. It focuses on the three major chemical industries of coal, phosphorus and salt, and owns two listed companies (Hubei Yihua and Shuanghuan Technology).

In addition, among the top 500 Chinese enterprises in 2017, the group ranked 193rd, the top 500 Chinese manufacturing enterprises ranked 80th, and the top 100 Hubei enterprises ranked 5th. It has also won honorary titles such as "National Advanced Grassroots Party Organization" and "National Advanced Collective for Creating "Four Good" Leadership Teams in State-owned Enterprises".

On December 18, 2017, Jiang Yuanhua was still the party committee secretary and chairman. On that day, the group organized a mid-level training class, and the deputy secretary of the group party committee was entrusted to give a concluding speech. When he was dismissed on January 22, the Hubei Provincial Commission for Discipline Inspection and Supervision Department called him the former Party Secretary and Chairman.

In fact, as early as 10 days ago, news spread on the Internet that he was taken away for investigation. Some people said that this was "good news." The situation behind this public opinion can perhaps be gleaned from a set of public reports published by the Changjiang Business Daily two years ago. On December 14, 2015, this Hubei media exposed the incident of Yihua involving "liquor in lieu of salary" and arrears of tens of millions of hard-earned money to employees with front page headlines + pages 4 and 5.

Incorporating self-operated liquor, red wine and other products into the group’s revenue-generating system is the diversification strategy of listed company Hubei Yihua amid the downturn in its main business. However, this move has been strongly criticized by all walks of life. The reporter's investigation found that the "internal employee sales model" was interpreted as alternative methods such as using wine to pay employees' wages, or even offset supplier accounts.

For many years, Yihua Group has been "forcibly" selling wine to suppliers and buyers. "For example, if we purchase a ton of goods worth 3,000 yuan, the relevant party will only charge 2,900 yuan, and the remaining 100 yuan is for wine."

An old man who worked at a chemical factory under Yihua Group The employee told reporters bluntly, "If you don't buy wine, the payment will be delayed, and you won't get the money anyway." Many internal employees confirmed to reporters that Yihua Group once used wine to offset employees' wages, such as 60% Salary, 40% wine.

In response, the group responded: "It's all a misunderstanding, just a misunderstanding by the supplier. Our employees can voluntarily use private channels to sell alcohol. This is to encourage employees to generate additional income. It is completely voluntary and absolutely impossible. Compulsory purchases occurred. "

As for the alleged arrears of tens of millions of hard-earned money from employees, the newspaper said that as a subsidiary of Shuanghuan Technology, another listed company under Yihua Group, Yihua Real Estate acquired Yihua Mountain. Yucheng project, however, encountered the contractor Luzhou Jiale Company "running away". Employees of Sichuan Sun Labor Service Company who signed a labor contract with the latter moved into the project shop and claimed that the wages owed totaled more than 10 million yuan.

At that time, the Yichang government had intervened in many ways, but the conflict between employees and Yihua was still unresolved because each party held its own account. "We calculated it to be more than 10 million, but Yihua calculated it to be only one or two million, which is a huge disparity." said Song Jiang, head of Sun Labor Service Company.

Multiple price increases were proposed, resulting in the “most expensive” fine

As for Jiang Yuanhua, he was born in 1966 and is a native of Yichang. One university called him an "outstanding alumnus" and disclosed that he has a doctorate in economics and is a senior engineer with a full-time vocational education. He also won the honorable title of "National Model Worker" in 2010.

After graduating from university in July 1988, Jiang Yuanhua entered Yihua. He started as a workshop technician and successively served as workshop director, director of the Chemical Engineering Research Institute, and assistant to the general manager.

Outstanding alumni materials say that he has admired two people in particular since he was a child, one is the modern thinker Yang Shoujing, and the other is Lu Xun from the Three Kingdoms era. Yang Shoujing's former residence is near his hometown of Yidu, and the school site of Yidu No. 1 Middle School is in Chengguan Lucheng Town, named after Lu Xun.

When filling out the college entrance examination application form, the class teacher tried his best to persuade Jiang Yuanhua to apply for a certain college. Jiang Yuanhua blushed and felt a little embarrassed: Teacher, I want to be a general because I hate my surname Jiang. My classmates call me Little Jiang, a descendant of Chiang Kai-shek. Take down the straw!

After graduating and joining Yihua, the 27-year-old became a member of the company team. Excited, he continued his studies, completed a doctorate, and later went to the United States for further studies. When he returned to Yihua, the company fell into a trough and its profits plummeted.

In February 2001, this person was promoted to chairman of Yihua Group. At that time, there was only 10,000 yuan in cash in the bank account, so he had to borrow money and pay wages to employees. Overnight, more than 70% of the group's middle-level cadres were replaced and adjusted.

Reports in 2010 showed that this person revitalized nearly 20 billion yuan of non-performing assets for the country, created and added more than 40,000 new jobs for the society, paid nearly 3 billion yuan in taxes for the country, and enabled Yihua Group to sell Revenue has grown from 3.6 billion yuan to over 40 billion yuan.

However, in the last few years of Jiang Yuanhua’s term, Hubei Yihua began to suffer serious losses. Public information shows that as of the end of September 2017, Yihua Group's total assets were 56.724 billion yuan and total liabilities were 48.954 billion yuan. It has since been included in the watch list for possible downgrade.

In November 2017, Yihua Group announced its third-quarter performance loss, saying that the company’s net profit was -1.276 billion yuan. The performance of Shuanghuan Technology, another listed company under it, is not very good either. From 2014 to 2016, the company's attributable net profits were 7.69 million yuan, 11.82 million yuan and -628 million yuan respectively.

In addition, in September 2017, 18 PVC (polyvinyl chloride resin) companies violated the Anti-Monopoly Law by reaching unified price increase agreements multiple times through WeChat groups and were fined a total of 4.57 The fine of 100 million yuan is the largest fine issued by the price enforcement department to a domestic enterprise in the past nine years.

Hubei Yihua was one of them and was fined 52.6198 million yuan. Moreover, officials also revealed that the company and another company actively proposed price increases through WeChat groups many times, playing a leading role in the case.