What’s new: Shenzhen-based insurer Funde Sino Life Insurance Co. Ltd. became the largest shareholder of National Trust Ltd. by acquiring a 40.72% stake in the trust and investment business from two shareholders.
The Beijing Banking Regulatory Bureau approved the equity transfer from Shanghai Chuangxin Asset Management Co. Ltd. and Shanghai Hengfengyu Industry Development Co. Ltd. to their parent Funde, according to a statement by the China Banking and Insurance Regulatory Commission (CBIRC).
Before the transaction, National Trust had four shareholders. The two others are Shanghai Fengyi Equity Investment Fund Co. Ltd. with 31.73% and Shanghai Jing’an Industry Co. Ltd. with 27.55%. Fengyi, Chuangxin and Hengfengyu are all controlled by Funde founder and Chairman Zhang Jun. Jingan Industry is controlled by Guo Xiaoqun and Guo Xiaoting, children of property developer Kaisa Group’s founder Guo Yingcheng.
National Trust should continue to push forward its equity restructuring in accordance with the CBIRC’s equity management regulations and relevant regulatory requirements, the Beijing regulator said.
The background: Originally a trust and investment company under the Zhejiang branch of China Construction Bank, National Trust went through a series of name changes and relocations before finally settling in Beijing under the jurisdiction of the Beijing Banking Regulatory Bureau.
National Trust’s ownership change attracted regulatory attention. For years, National Trust was controlled by Hong Kong businessman Zheng Jianyuan, who has long had connections with former Chinese Prime Minister Wen Jiabao’s family. In 2014, Kaisa’s Guo acquired a controlling stake in National Trust from Zheng. A few months later, Guo transferred the stake to Funde and its affiliates.
The frequent change of ownership violated a regulation barring investors in trust companies from transferring equity stakes within three years. Consequently, it was investigated by the Beijing Banking Regulatory Bureau in 2015.
In August 2015, the CBIRC approved in principle that Funde acquire 93.44% of National Trust and required Funde to urge National Trust to improve corporate governance structure and prevent risks.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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