China Launches New Probe Into Aggressive Private Conglomerate
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China’s securities regulator has launched a new investigation into Dangdai Group, marking its second case filing against the once-prominent private conglomerate and adding uncertainty to its ongoing bankruptcy restructuring.
The company said it received a notice on Nov. 28 for suspected disclosure violations and illegal financing — the same allegations that triggered a probe by the China Securities Regulatory Commission (CSRC) into its former affiliate Tianfeng Securities (601162.SH). The brokerage and Dangdai Group had long been bound by complex financing and debt ties.
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- China’s securities regulator has launched a second investigation into Dangdai Group for suspected disclosure violations and illegal financing.
- Dangdai Group’s affiliates occupied significant funds: 1.9 billion yuan from Tianfeng Securities and 12.9 billion yuan from Humanwell Healthcare, both later returned.
- Dangdai’s court-approved restructuring plan awaits final approval pending CSRC decisions, with potential penalties delaying the process and risking “special treatment” status for related companies.
- Dangdai Group
- Dangdai Group, a once-prominent Chinese private conglomerate, is under a new investigation by China's securities regulator for suspected disclosure violations and illegal financing. This is its second probe, adding uncertainty to its bankruptcy restructuring. The group previously occupied 1.9 billion yuan from Tianfeng Securities and 12.9 billion yuan from Humanwell Healthcare, its key pharma asset. A restructuring plan was approved, but regulatory penalties are still pending, potentially impacting the completion of the plan.
- Tianfeng Securities
- Tianfeng Securities, a former affiliate of Dangdai Group, is under investigation by the CSRC for suspected disclosure violations and illegal financing. The brokerage was found to have had approximately 1.9 billion yuan ($265 million) of its funds occupied by Dangdai Group and related entities, though these funds were reportedly returned by the end of 2022. The outcome of the CSRC investigation is currently delaying the final approval of Dangdai Group's bankruptcy restructuring plan.
- Humanwell Healthcare
- Humanwell Healthcare (600079.SH) is a Shanghai-listed key pharmaceutical asset of Dangdai Group. Its funds were occupied by Dangdai Group, totaling 12.9 billion yuan from 2019 to 2022. Both Humanwell Healthcare and Tianfeng Securities were placed under CSRC investigation last year due to suspected disclosure violations and illegal financing by Dangdai Group.
- China Merchants Innovation Technology (Group) Co. Ltd.
- A Wuhan court approved a restructuring plan involving a 11.8 billion yuan investment from China Merchants Innovation Technology (Group) Co. Ltd. This investment would give them control of Humanwell, a significant pharmaceutical asset belonging to Dangdai Group. However, the plan's completion is pending due to ongoing investigations by China's securities regulator.
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