A conference to ensure the disposal of assets involving a bankruptprivate firm at the center of a series of major lending scams washeld on Friday. "Seventy-two out of the 77 representatives attended the meeting todiscuss their future duties and working systems," said HongZhourong, deputy director of the publicity department of Taishuncounty, Zhejiang province, referring to the first Liren Groupcreditor representative conference. The liquidation process for Liren Group has begun, county officialssaid earlier on Wednesday. An initial investigation showed thegroup owed 4.5 billion to 5 billion yuan ($713 million to $793million) to 7,000 individual creditors. |
As a common practice, Liren borrowed money from private investorswith a promise to pay high interest. But the group failed to secureenough loans from big banks to repay the debts and declared itselfinsolvent last October. Many of the creditors are local officialsand businesspeople who wanted to beat inflation. Liren, which said it would stop repaying its creditors lastOctober, previously operated in the education, real estate andmining sectors.
The group's head Dong Shunsheng was detained on Feb3 for alleged fraudulent fundraising. The case has heightenedpublic concerns over reforms in the financial sector. Representatives at the latest conference have also discussed waysto deal with property in eastern Jiangsu province's Huai'an cityunder the Liren Group, Hong said. Taishun authorities began disposing of the group's assets onTuesday, according to an announcement on the county's website onApril 8. The disposal includes all assets belonging to Liren, all stock andmining rights registered in the name of the group or affiliatedcompanies, all stock rights and mining rights not registered in itsname but belonging to the group, funds recovered in criminalinvestigations and other assets belonging to Liren or itsaffiliated companies.
"The detailed asset disposal plan is expected to be released by theend of this month. The details of the debts that Liren faced arebeing examined and calculated at present, and will very likely bereleased this month," Hong said. "In order to facilitate the asset disposal work, a creditorcommittee will be set up as soon as the creditor representativeshave been selected," Hong said. Many creditors had previously placed a lot of confidence in Liren.One creditor, surnamed Wu, told Xinhua News Agency they invested inthe group because they believed that its chairman was "a personwith vision".
"The group was doing such a good job in mining and propertiesstarting from 2003. At that time, the market was also good. Wenever expected things to deteriorate as such," Wu said.
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