Recently, a fraud case involving the state-owned enterprise **chain** has aroused widespread concern in the society. It is reported that Guangzhou Yihai, a subsidiary of the well-known brand Arowana in the grain and oil industry, was prosecuted by the procuratorate, accusing it of assisting Yunnan Huijia and others to commit contract fraud, resulting in a loss of more than 5 billion yuan to the state-owned enterprise Anhui Huawen. Arowana denied the accusations, saying that Guangzhou Yihai was only a warehouse and did not participate in the fraud. How exactly did this case happen? What are the risks and hidden dangers in the chain? How can SOEs prevent and respond to such risks? This article will uncover the answers to these questions for you.
A "power-for-money transaction".
To understand the ins and outs of this case, we need to first introduce the main parties involved in the case. Anhui Huawen is a state-owned enterprise mainly engaged in international and service-oriented business, mainly engaged in the import and export business of bulk commodities, providing customers with logistics, financial and other resources integration and chain operation solutions. Yunnan Huijia is a private enterprise that used to be the largest palm oil financier in China, accounting for a significant share of the domestic palm oil import market. Palm oil is a common edible oil and the main raw material for grain and oil products such as Arowana. Guangzhou Yihai is a wholly-owned subsidiary of Arowana, mainly responsible for the warehousing and logistics services of grain and oil products.
The deal between the three companies began in 2008, when Yunnan Huijia imported large quantities of palm oil from abroad through Anhui Huawen**, while Guangzhou Yihai acted as a transit warehouse to store the palm oil. According to the normal ** process, Yunnan Huijia should first pay Anhui Huawen for the goods, and then pick up the goods from Guangzhou Yihai, or transfer the right to the goods to other buyers. However, Zhang Lihua, the person in charge of Yunnan Huijia, came up with a "clever trick", he reached a transaction agreement of "goods before payment" by bribing Wang Min, chairman of Anhui Huawen, and Wang Xiaohu, vice president and chief financial officer, that is, Yunnan Huijia can get the goods first and then pay for the goods within the agreed time limit. In this way, Yunnan Huijia can use this time to resell the goods to other buyers, earn the difference in price, or use the goods as collateral to obtain financing from banks or other sources to expand the scale of its own funds.
This was originally a very non-standard way, but Zhang Lihua did not repay the loan as agreed, but played a bigger trick. He used the warehousing service in Yihai, Guangzhou, to forge some documents for the transfer of ownership of goods, so that Anhui Huawen mistakenly believed that he had resold the goods to other buyers, when in fact, he secretly sold the goods to other channels, or used the same goods to refinance repeatedly, thus defrauding more funds. In order to cover up his fraud, he also forged some reconciliation letters to convince the financial department of Anhui Huawen that his accounts were clear, and a palm oil salesman in Anhui Huawen also cooperated with him because he accepted bribes from Zhang Lihua. In the process, Liu Degang, the general manager of Guangzhou Yihai, and Yu Ping, the warehouse manager, also accepted bribes from Zhang Lihua to provide him with warehousing services and the convenience of forging documents. In this way, from 2008 to 2014, Zhang Lihua defrauded Anhui Huawen of more than 5 billion yuan in this way, but Anhui Huawen never found out that his goods had been secretly taken.
It wasn't until the end of 2014 that Anhui Huawen realized that he had suffered a huge fraud and immediately reported it to the public security organs. After years of investigation, the procuratorate finally determined that Yunnan Huijia and its person in charge, Zhang Lihua, and its employees, constituted the crime of contract fraud, while Guangzhou Yihai and its person in charge, Liu Degang, and others constituted aiders in the crime. In addition, Zhang Lihua is also suspected of bribery, and Wang Min, Wang Xiaohu and other Anhui Chinese executives, as well as Liu Degang and others, are also suspected of ** crimes. The criminal acts of these people have directly led to the huge loss of state-owned assets and caused serious damage to the state and society. At present, the case is being tried in court, and Arowana insists that Guangzhou Yihai only provided warehousing services, did not participate in the fraud, and did not cause losses to Anhui Huawen, so it should not bear any responsibility.
Risks and precautions of the chain.
This case has aroused people's attention to the **chain**, especially the **chain** in which state-owned enterprises participate, are there some potential risks and hidden dangers? Chain is a model involving multiple subjects and links, which improves the efficiency and effectiveness of the enterprise by integrating the resources and needs of upstream and downstream enterprises, and also provides more financing channels and opportunities for enterprises. However, the **chain** is not without shortcomings, its complexity and opacity, but also to some criminals to take advantage of the name, in the name of the **chain**, to carry out false transactions, arbitrage funds, evade supervision and other illegal acts, to the country and society has brought huge risks and losses.
In recent years, state-owned enterprises have frequently broken out major risk events involving financing. Financing is a kind of business in the name of the business, in fact, the act of providing funds to the outside world or providing funds in disguise, its essence is false without commercial substance, and it is easy to breed corruption. The typical characteristics of financing ** are that there are common expressions in loan contracts such as advances, financing, loan principal, and loan interest in the contract terms, while there are various unreasonable delays or changes in the delivery and settlement of goods, or even the actual flow of goods at all. The purpose of financing is to take advantage of the capital advantages and credit advantages of state-owned enterprises to provide financing convenience for upstream and downstream enterprises, or to obtain more funds for themselves, so as to expand business scale and profitability. However, there is also a huge risk of financing, once the market volatility or the capital chain is broken, it may lead to the loss of funds or default liability of state-owned enterprises, and even trigger a greater financial crisis.
In order to prevent and curb the risk of financing, the national and local governments have introduced a series of regulatory measures and regulatory requirements. For example, in Document No. 74 issued by the State-owned Assets Supervision and Administration Commission last year, it clearly put forward the prohibition of "ten prohibitions", including "not allowed to carry out any form of financing" and "not allowed to carry out all kinds of false business". At the same time, the State-owned Assets Supervision and Administration Commission also requires state-owned enterprises to strengthen internal management and risk prevention and control, establish and improve the approval, supervision, verification, accountability and other mechanisms for business, strictly implement the first contract, standardize the first settlement, and prevent funds from being misappropriated or occupied. In addition, state-owned enterprises should also strengthen the audit of the compliance and authenticity of the first chain, conduct on-site inspections of the goods, warehouse receipts, bills, etc., conduct qualification reviews on the partners, warehousing parties, logistics parties, etc., and conduct rationality analysis on the transaction mode, transaction and transaction cycle involved, so as to avoid participating in or being involved in false or improper activities.
Chain is a model that is beneficial to the country and society, which can improve the efficiency and effectiveness of the company, and can also provide more financing channels and opportunities for enterprises. However, the **chain** is not without shortcomings, its complexity and opacity, but also to some criminals to take advantage of the name, in the name of the **chain**, to carry out false transactions, arbitrage funds, evade supervision and other illegal acts, to the country and society has brought huge risks and losses. Therefore, state-owned enterprises participating in the **chain** must comply with the relevant national and local regulations and requirements, strengthen internal management and risk prevention and control, strictly implement the ** contract, standardize the ** settlement, and prevent funds from being misappropriated or occupied. At the same time, state-owned enterprises should also strengthen the audit of the compliance and authenticity of the first chain, conduct on-site inspections of the goods, warehouse receipts, bills, etc., conduct qualification reviews on the partners, warehousing parties, logistics parties, etc., and conduct rationality analysis on the transaction mode, transaction and transaction cycle involved, so as to avoid participating in or being involved in false or improper activities. Only in this way can state-owned enterprises give full play to their advantages in the chain, create more value for the country and society, and at the same time protect their legitimate rights and interests and avoid unnecessary losses.