The repayment crisis of limited partnership products has emerged repeatedly, also exposing the mixed quality of the guarantee industry.

A limited partnership product issued by Hongbao (Beijing) Equity Investment Fund Management Co., Ltd. (hereinafter referred to as "Hongbao Fund") was supposed to start paying investors' principal and returns at the end of March this year, but some investors said that they have not yet fully received their investment funds.

The product involves a total of 109 million yuan, used for a BOT infrastructure project of the Nanchong Municipal Government in Sichuan Province. The project contractor, Hansen Hengfa Investment Co., Ltd. (hereinafter referred to as "Hansen Company"), had previously faced a cash flow problem, and Hongbao Fund raised 200 million yuan for it. (See our June 27 article "PE Fundraising 'Maturity Mismatch': Local Government's 100 Million BOT Project in Repayment Crisis")

On July 16, Liang Bin, vice president of Hongbao Fund, told the 21st Century Business Herald that the company has already used more than 20 million yuan of its own funds to advance payments, and the project party is also in the process of collecting payments, and full repayment is expected in August this year.

It is worth noting that the guarantee company, Zhongguang Wealth Financing Guarantee (Beijing) Co., Ltd. (hereinafter referred to as "Zhongguang Guarantee"), not only failed to advance funds as agreed, but its legal representative, chairman and president Ma Jinbiao has been unreachable since June 15.

Like the recent repayment crises of limited partnership products, although many have guarantees from guarantee companies, failures to advance payments as agreed also occur from time to time.

A private equity lawyer introduced that due to the low threshold for non-financing guarantee companies and the mixed quality, there are relatively many cases of non-performance of guarantee contracts. Recently, Hunan, Shandong, Shaanxi and other provinces are cleaning up and regulating non-financing guarantee companies.

At present, the risks of financing guarantee companies are also beginning to gradually emerge. According to industrial and commercial registration information, Zhongguang Guarantee is a financing guarantee company controlled by a state-owned enterprise.

Fund advances with own funds

According to the reporter's understanding, Hansen Company had previously borrowed 200 million yuan from Hongbao Company due to insufficient cash flow, for the Nanchong project construction funds.

Liang Bin introduced that in December 2012, the two parties signed a cooperation agreement, under which Hongbao Fund established a limited partnership to raise 200 million yuan, divided into two phases, with each phase being 100 million yuan for one year. From March 2013 to the end of that year, a total of 109 million yuan was raised for the project party, which matured in March this year.

According to the agreement, the project party would raise the next phase of funds after paying the first phase. However, the project party has failed to pay the principal and returns as scheduled.

Liang Bin learned from the project party that at the end of 2013, the project party added 20,000 square meters of construction on top of the 60,000 square meters project, and the local government required the replacement of land certificates, and the project company paid more than 100 million yuan in land transfer fees, causing temporary cash flow problems for the project party, and the limited partnership fund was forced to delay repayment.

Liang Bin said that the main project is basically completed, pre-sales began on June 20, and the project party stated that it will repay all principal and returns in a lump sum in August this year. At the same time, Hongbao Fund has already used more than 20 million yuan of its own funds to advance payments.

Previously, after the fund repayment was delayed, Hansen Company, Hongbao Fund, Zhongguang Guarantee and investors gathered in Chengdu and determined a preliminary solution.

A "Delay Statement" obtained by the 21st Century Business Herald reporter shows that the fund's repayment period has been extended from June 14, and the specific repayment time will be determined according to actual conditions, but no later than August 31, 2014. At the same time, the fund company, guarantee company, and project company would provide 15 million yuan (each contributing 5 million yuan) on June 19, 2014, to first repay 50% of the principal of the matured partners and all returns for one year.

However, in the end, only Hansen Company and Hongbao Fund contributed 4.5 million yuan and 9.5 million yuan respectively, while the guarantee company played "hide and seek."

Zhongguang Guarantee under a cloud

Since June 15, Ma Jinbiao, the person in charge of Zhongguang Guarantee, suddenly became "unreachable," forcing the above-mentioned preliminary solution of 15 million yuan to be postponed. In fact, since June 27, the reporter has also tried to contact Ma Jinbiao multiple times, but his four phone numbers were all unreachable.

Recently, multiple limited partnership products have experienced repayment crises. Although they all have guarantees from guarantee companies, it is puzzling that most have not fulfilled the guarantee obligation to advance payments.

According to the guarantee contract, the guarantee period is two years, and the guarantee amount is 200 million yuan, meaning that the guarantee contract will expire after March 2015. In April 2013, Hongbao Fund paid 10 million yuan in deposit to Zhongguang Guarantee, and in September of the same year paid the first guarantee fee of 6 million yuan.

According to the guarantee letter provided by investors, after 5 working days overdue, the guarantee company should make compensation. In addition, the project party mortgaged more than 7,000 square meters of shops to the guarantee company, with an estimated value of about 400 million yuan.

The seemingly safe risk control measures did not work in the face of the repayment crisis.

Several investors in Chengdu, Sichuan reported that the Chengdu office of Zhongguang Guarantee has been closed. Although the Beijing headquarters still has staff working, no responsible person has come forward to explain the situation.

On July 16, the reporter called Zhongguang Guarantee, and the relevant staff said that they have also been trying to contact Ma Jinbiao during this period but could not reach him; whether the guarantee obligation can be fulfilled as agreed is a business matter and they do not know.

Liang Bin said that he has visited the headquarters of Zhongguang Guarantee many times for communication but to no avail. Because he has been unable to contact Ma Jinbiao to get back the 10 million yuan deposit, he has arranged for a lawyer to negotiate with the shareholders of Zhongguang Guarantee.

Industrial and commercial registration information shows that Zhongguang Guarantee was established in March 2010, with Everbright International Construction Engineering Corporation, Zhongji Industrial Investment Co., Ltd., and Ma Jinbiao contributing 340 million yuan, 260 million yuan, and 20 million yuan respectively. It is a financing guarantee company controlled by a state-owned enterprise.

According to the above-mentioned private equity lawyer, since last year, as economic growth has slowed, risks in the real estate and overcapacity industries have gradually emerged, and the risks of guarantee companies have also emerged, spreading to financing guarantee companies.