After hearing that more and more suppliers and distributors were reporting the crime, Xu Fusheng chose to surrender to the public security organ. 51-year-old Xu Fusheng and Beijing Haifuxin Trading Co., Ltd. (hereinafter referred to as Haifuxin Company), which he worked hard to run, were accused of obtaining bank loans by deception and were tried in the Haidian District Court of Beijing on October 9.
The procuratorial organ alleged that Haifuxin Company and Xu Fusheng should be held criminally responsible for the crime of fraudulently obtaining loans. Xu Fusheng said: "I admit all the facts and the process. Regarding the charges, I don't know much about the law." Unlike Xu Fusheng, the litigation representative of Haifuxin Company stated that he did not recognize the facts and charges of the alleged crimes. . The lawyers present in court all pleaded not guilty.
The wine business suffered a "Waterloo" and began to borrow money at high interest rates
In the defendant's seat, Xu Fusheng's hair was gray, and he no longer had the working style of the business world. Xu Fusheng, born in 1965, chose to serve in the military after graduating from high school and changed careers 18 years later. In January 2005, he became the legal representative and chairman of Haifuxin Company through equity transfer.
"This time it is because the company's merchants reported that our company used the merchant's name to obtain bank loans, which caused credibility losses to the merchants. I am here today to surrender and explain the situation." Xu Fusheng said when being interrogated.
Haifuxin Company was established in 1997 with a registered capital of 80 million yuan. It mainly engages in the wine business. It is the China Food [-0.28] Northern Sales Company (formerly known as China Great Wall Grape Co., Ltd.) red wine under COFCO Group. The general agent for sales in North China and Northeast China. In 2011 and 2012, Great Wall Red Wine ranked first in the country.
Xu Fusheng recalled that the heyday of the company’s development was in 2010 and 2011. The number of employees at its peak reached more than 1,100. Sales outlets are mainly located in North China, Northeast China, Shandong Province, and Henan Province, with annual sales reaching more than 500 million yuan. However, starting in 2012, the company's sales performance declined, with sales falling by 50% from 2013 to 2014. Operating under debt, the company has only two to three hundred employees. Before the incident, the company's sales business was at a standstill and unable to operate.
Xu Fusheng believes that his business has suffered a "Waterloo", mainly due to the impact of national policies and the external environment. High-end red wine and liquor cannot be sold, resulting in a large backlog of wine in the company's warehouse and extremely difficult capital turnover. At the same time, a large number of loans, borrowings and high interest rates have to be repaid, which eventually breaks the capital chain.
Xu Fusheng confessed that before 2011, the company's main source of development funds was bank loans. At that time, the company's performance was very good and there was no problem in repaying bank loans and interest. After the company's performance declined in 2012, it became difficult to repay bank loans and interest. Therefore, he chose a private small loan company for short-term lending, but this part of the funds had to pay a high monthly interest rate of 3 to 6.
In the context of the sluggish development of the industry, relying on private high-interest loans to cope with bank loans and interest, and having to repay the loans and high monthly interest, is almost like "drinking poison to quench thirst".
In 2013, his wrong prediction of market development put the company in trouble. In June, Haifuxin Company paid 180 million yuan to China Food Northern Sales Company to purchase red wine. Among them, half of the funds are the company's own funds, and the other half are high-interest loans from private institutions.
Xu Fusheng said that shortly after the purchase, the market price of red wine dropped, making it difficult to sell his wine, and there was a large backlog of red wine worth 150 million yuan. At the same time, the company also has a backlog of nearly 190 million yuan of liquor. This resulted in Haifuxin's 340 million yuan being unable to be repaid. In addition, due to market reasons, it is also difficult to collect money in various places. In Beijing alone, major supermarkets have owed them 40 million yuan in payments over a long period of time. In this case, Haifuxin's capital chain is in danger of being broken.
Xu Fusheng confessed that he started to borrow high-interest private loans in May and June 2012. There were nearly 50 banks with a total loan amount of about 860 million yuan. The company has repaid the high monthly interest of 2.8 billion yuan. 100 million yuan, and the principal repayment is 150 million yuan.
To solve the financial pressure, lobby suppliers and sellers for loans
In addition to private high-interest loans, Xu Fusheng turned his attention to merchants and banks.
"It may be that in 2012, Haifuxin Company acted as a guarantor at the Jinyuan Branch of China Everbright Bank [-0.79 Fund Research Report], and made two short-term loans in the name of a Beijing distribution merchant, and both paid the principal on time. This loan model has gained a certain reputation in the banking system," Xu Fusheng confessed. In the second half of 2012, Minsheng Bank [-0.32 Fund Research Report] Beijing Guomao Branch found his brother Xu Fu. Success, I want to apply the previous loan model with Everbright Bank and make a loan with them: Haifuxin Company first pays a deposit of 20 to the bank. After the loan is obtained, it will be credited to the merchant's credit card, and then the bank will transfer it to Haifuxin Company. The account has a term of one year and an annual interest rate of RMB 12. After maturity, for the amount used by the merchant, the merchant will repay the principal and interest to the bank in one go. For the amount used by Haifuxin Company, the company will repay the principal and interest to the bank in one go. The bank then returned the deposit to Haifuxin Company. If the merchant does not know the principal and interest, the bank will deduct it from the deposit.
"I considered that this would allow Beijing distributors to use loans to offset the payment for wine purchased from our company, and also reduce the pressure on the company's wine inventory, so I agreed." Xu Fusheng confessed, in 2013, Baotou Commercial Bank Beijing Tongzhou Branch, China Guangfa Bank Beijing Shangdi Branch, Ping An Bank [-0.22 Fund Research Report] Chaoyangmen Branch, etc. successively approached Xu Fucheng and wanted to copy this model for loans.
Xu Fusheng said: "The merchant agrees to transfer the loan from the bank to the merchant's credit card first, and then transfer it to Haifuxin Company. After the loan is transferred to the merchant's credit card or the bank loan limit has been approved, I The company's salesperson signed an agreement for the use of the loan with the merchant."
Zhang, who runs a trading company in Beijing, testified that Haifuxin Company is one of its wine suppliers. In the second half of 2012, Haifuxin's salesperson suggested that he apply for a loan at Beijing Jingguang Branch of Minsheng Bank, with an amount of 3 million yuan and a term of one year. Haifuxin Company would provide guarantee and the interest would be paid by Haifuxin Company. He could use With a loan limit of 20, you can purchase goods from Haifuxin without paying the purchase price. Zhang felt that this loan method would have no bad impact on him, so he agreed.
In the first half of 2013, Zhang borrowed another 300,000 yuan from Baotou Commercial Bank through the salesperson of Haifuxin Company. The principal and interest of both loans were repaid by Haifuxin Company.
In September 2013, at the suggestion of the salesperson of Haifuxin Company, Zhang applied for a loan of 1.8 million yuan at the Beijing Jingguang Branch of Minsheng Bank, and Zhang could use 600,000 yuan. In September 2014, Zhang, who had repaid the principal of 600,000 yuan to the bank as agreed in advance, received a reminder notice from the bank, requiring Zhang to return the above-mentioned money. It was only then that the Haifuxin Company salesperson told Zhang that the company had not repaid the bank principal and interest of 1.2 million due to financial constraints.
After the incident, Xu Fusheng recalled that they provided loans to more than 100 merchants in Beijing from Baotou Commercial Bank, China Guangfa Bank, Minsheng Bank, and Ping An Bank, with a loan principal of more than 100 million yuan.
After feeling deceived, more and more suppliers and sellers reported the case to the public security organs. On August 18, 2015, Xu Fusheng chose to surrender to the public security organ. He admitted that by October 2014, the company's capital chain was completely broken and there was really no money to repay the principal plus interest to the bank. He communicated with the bank and requested to postpone the payment of principal and interest. The bank replied that the merchant should repay it first, so the merchant was urged by the bank.
Accused of defrauding more than 145 million yuan in loans, claiming that he did not understand why the merchant reported it
On August 18, 2015, Xu Fusheng was arrested by the Beijing Municipal Public Security Bureau on suspicion of defrauding loans. Criminal detention by Haidian Branch.
On September 24, with the approval of the Haidian District Procuratorate, Xu Fusheng was arrested. On June 2, 2016, the Haidian District Procuratorate prosecuted the case to the Haidian District Court.
According to the prosecution’s accusation, affected by the market environment since 2012, the sales volume of the defendant’s unit Haifuxin Company has continued to decline and funds have been tight. In order to maintain operations, the defendant Xu Fusheng decided to sell goods to Haifuxin Company in the name of Haifuxin Company. A number of banks and small loan companies borrowed money, and while concealing the above-mentioned operating conditions and liability status, they signed batch business cooperation agreements with a number of banks. Haifuxin Company recommended the downstream dealers it cooperated with to obtain loans from the banks. When paying for the purchase of wine from Haifuxin Company, Haifuxin Company assumes joint and several liability or provides a pledge guarantee.
At the same time, Xu Fusheng assigned the business personnel of Haifuxin Company to reach a private agreement with the downstream dealers. They would pay after delivery, promise to give the merchants interest-free use of part of the loan, or have Haifuxin Company undertake the cooperation for the merchants. Different conditions such as loan interest during the period induced many merchants to obtain bank loans in their personal names for the use of Haifuxin Company.
The above-mentioned loans, totaling more than 145 million yuan, were all entered into the account of Haifuxin Company and used for the company's daily operations, repayment of company loans and interest, etc. Haifuxin Company paid monthly payments to the bank on behalf of the loan merchants. repayment, but only partially fulfills the obligation to supply goods or refund money to the loan merchant. In October 2014, Haifuxin's capital chain broke, and it stopped repaying loans to banks and stopped supplying goods to merchants.
In court, the prosecutor pointed out that the defendant’s unit and the defendant should be held criminally responsible for the crime of fraudulently obtaining loans. Xu Fusheng said: "I admit the facts and the process. I don't know much about the crime."
Xu Fusheng's defense lawyer believes that Baotou Commercial Bank, Minsheng Bank, China Guangfa Bank, and Ping An Bank Fuhaixin Company's dealer loan project was legal and the procedures were proper. Fuhaixin Company did not provide false documents to the bank to obtain the loan, and the dealers were aware of the loan process. In addition, the agreement on the use of loan funds between Haifuxin Company and the dealer was signed after the loan was issued. It did not affect the issuance of the loan and was actually performed. It should not be considered as a basis for fraudulently obtaining loans.
“The merchant reported me and the company for fraud. I couldn’t figure out that there was something wrong with the company’s operation. At that time, both parties had normal needs for funds. After repaying the loan and interest, I did not escape from the merchant. Escape from reality, but actively think of ways and do your best to solve problems," Xu Fusheng said.
"In late August 2014, the company was still supplying goods to merchants, but the supply volume was not large. The supply volume in September was very small, and there would be no supply in October." Xu Fusheng explained, Due to the break in the capital chain, the company could not repay the loans and high interest from the private small loan company on time, and the other party gradually mortgaged and sealed its inventory of wine. Until October 2014, he actively negotiated with small loan companies and requested that more than 10 of the company's drinks be unblocked. In this way, more than 30 million yuan of drinks were supplied to Beijing distribution merchants.
Regarding the whereabouts of the loans involved, Xu Fusheng testified that according to the agreement between the merchant and his company, they used a loan of approximately 30 million yuan; ** paid a deposit of about 20 million yuan; the company paid interest of about 20 million yuan to Baotou Commercial Bank, Guangfa Bank, Minsheng Bank and private small loan companies; it spent 20 million yuan on delivering goods to merchants; company personnel salaries and office expenses were about 1,000 yuan Ten thousand yuan.
The case revealed the rules of the alcohol sales industry and the practice of promotional rebates
During the handling of the case, the investigative agency also conducted a forensic audit of the accounts of Haifuxin Company and discovered a number of large expenditures . In March 2014, the company's accounts showed that cash payments totaled more than 17.286 million yuan.
Xu Fusheng explained that this is the red wine cap fee, bottle cap fee, ticket fee, promotional cash rebate and other expenses accumulated by the company over the past year, which are to be returned to the company's salesmen and promoters ’s, which are then returned to alcohol consumers and hotel and restaurant waiters. During major festivals or promotional activities, such expenses amount to millions of dollars.
This is the market practice for wine sales.
From November to December 2013, the accounts of Haifuxin Company showed that 97 cash payments of 49.823 million yuan were made, but there were no signatures from the applicant, user, or approver. In this regard, Xu Fusheng explained that the company holds wine ordering meetings every year during the Spring Festival, National Day, New Year's Day and other times, and promises to return a certain proportion of cash and market support fees to the dealers' order amount, but this part of the fee is not actually paid to the dealers. The dealer's cash is recorded in the cash account as a dealer's advance payment.
He gave an example, for example, if a dealer ordered 1 million yuan of wine from his company, the actual payment was only 800,000 yuan, but the company had to record it as 1 million yuan of capital income and send out 1 million yuan of wine. The difference of 200,000 yuan is returned to the dealer as the cost of his next order. Because wine profits are huge, the sales market basically follows this model. In order to balance the accounts, the company made a fictitious cash withdrawal of 200,000 yuan.
Ms. Li, the manager of an international trade company in Beijing, testified that the competition in the wine market is relatively fierce. If Haifuxin Company requires dealers to promote sales, there will be entrance fees, red wine cap fees, bottle cap fees, and small items. Ticket fees, promotions and other expenses are borne by Haifuxin Company, which is a market practice. Haifuxin Company also uses car incentives to promote drinks. Some sales managers with good performance have annual salaries ranging from hundreds of thousands to millions of yuan. The alcohol market follows a similar model.
Prosecutor handling the case: The desire to turn losses into profits prompted him to keep borrowing money
“Xu Fusheng’s desire to turn losses into profits prompted him to keep borrowing money and using new debts to repay old ones. debts, and eventually the capital chain was completely broken, leaving him completely unable to repay these debts." Chen Chen, the prosecutor handling the case, told reporters, "The occurrence of the case has a huge impact on Xu Fusheng and his Haifuxin company, as well as the use of their own names to help with loans. It is a very regrettable thing for small merchants and banks, but all three parties have certain responsibilities." Chen Chen analyzed that for Xu Fusheng and the Haifuxin Company he worked so hard to manage, Haifuxin Company originally had good business experience, but his misjudgment of the market and overly radical business methods caused the company to fall into trouble. If Xu Fusheng could adjust his business strategy in time and shrink the scale and scope of his business, it might not lead to today's ending.
"The actions of Xu Fusheng and Haifuxin Company have put small merchants who lend money and the banks that issue loans at risk." Chen Chen said that Haifuxin Company's operations have reached a certain scale, and compared with There are many merchants with whom we have done business. The loan amount of a single small merchant is not high, but when accumulated, the loan amount of many small merchants will be very large. This is one of the reasons why Haifuxin Company finally found it difficult to repay.
For small merchants, due to the impact of the market environment, they also hope to obtain some interest-free loans or obtain certain discounts in their business dealings with Haifuxin Company, but they have not seriously considered Haifuxin Company. Why does it need to borrow money from banks, causing itself to fall into crisis to a certain extent?
For banks, it is inevitable that they will suffer certain losses. Small merchants apply for loans in the name of purchasing goods from Haifuxin Company. Based on Haifuxin Company's previous reputation, the bank believes that it has the ability to supply goods. However, there are flaws in the loan issuance review, especially in the substantive review. Judging from the evidence in the case, the loan information provided by some small merchants was not very complete, and the bank did not verify the past business dealings between Haifuxin Company and the small merchants, or the true performance of the purchase and sales contract during the review.