Liuzhou Laowai

Random thoughts on life in Liuzhou, Guangxi, China

Liao’s Liuzhou Loans

廖荣纳

廖荣纳

A storm has been building up over the last few weeks concerning a Liuzhou company.

Liuzhou Zhengling Group Company Ltd (柳州正菱集团有限公司), head-quartered in (柳邕路) Liuyong Road, is part of Liuzhou’s automotive industry and manufactures heavy vehicles, concrete mixer trucks, automobile parts machine tools etc.

Like many of these large companies, they have also speculated and become involved in building industrial parks, hotels and the ubiquitous shopping malls*. Group chairman, 廖荣纳 (left) has been described as Liuzhou’s richest man.

Zhengling Group main products

Zhengling Group main products

In April, the Tencent social media giant(QQ anf WeChat) published an item on their news portal claiming the group was about to declare itself bankrupt. Zhengling responded by issuing their own notice denying all ‘rumours’ and threatening to take legal action. Tencent finally removed the item in question.

However, following the story, several creditors, including the local banks came forward to say that the company had indeed defaulted on a huge number of loans.

Now, the company is under investigation amid reports that it is in debt to the tune of ten billion RMB, and that illegal fundraising activities are suspected. It has even been reported that Liao, the chairman has had death threats from criminal loan shark organisations.

The full story of the company’s finances is extremely complicated (and I’m no economist), but the company’s affairs are being pulled apart by several Liuzhou and Guangxi government departments. It has been suggested that the company should have the assets to cover the debt, but this will require that the group will have to be broken up and sold off.Many employees are said to have left, concerned that their pensions may be at risk.

The scandal and its effects go far beyond the company itself, feeding into the whole of Liuzhou’s automotive industry.

Nothing has been heard from Mr Liao.

Main Source (in Chinese)

* The Wall Street Journal has come up with this insightful article on China’s mall building madness, confirming what I’ve been saying for years.

. This entry was posted on Sunday, June 8th, 2014 at 12:07 pm and is filed under Chinese Banks (Grrr!), Corruption, Crime and Punishment, Liuzhou News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Liao’s Liuzhou Loans”

  1. Liuzhou Calls Interpol | Liuzhou Laowai Says:

    […] back in early June I wrote about the scandal looming over Liuzhou company, Liuzhou Zhengling Group Company Ltd […]

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