Jul 17, 2019 09:14 AM

More Financial Institutions Exposed to Camsing Fraud Scandal

Shenzhen-listed Fasten said its subsidiary has 2.9 billion yuan of exposure in the Camsing scandal. Photo: VCG
Shenzhen-listed Fasten said its subsidiary has 2.9 billion yuan of exposure in the Camsing scandal. Photo: VCG

Shockwaves caused by the detention of Camsing Global founder Lo Ching continued spreading through China’s finance sector as more institutions disclosed exposure to Lo’s alleged supply-chain financing fraud.

Shenzhen-listed metal products manufacturer Jiangsu Fasten Co. Ltd. on Tuesday said its wholly owned subsidiary Shanghai Mosan Factoring Co. Ltd. held outstanding asset management products worth 2.9 billion yuan ($422 million) involving financing for Guangdong Zhongcheng Industrial Holdings Co., a Camsing subsidiary controlled by Lo, as of June 30.

It was the first time Shanghai Mosan confirmed its exposure to risks linked to scandal-ridden Camsing since Chairwoman Lo was detained by Shanghai police on fraud allegations. The detention sparked fears that billions of yuan raised by Camsing and affiliates through asset management products are backed by falsified transactions and accounts receivable with business partners including e-commerce giant and

As the scandal unfolds, Caixin learned that the China Banking and Insurance Regulatory Commission on July 11 issued a set of guidelines (link in Chinese) to financial institutions regarding supply-chain financing. The document outlined 22 measures including requirements to enhance transaction verification and logistics monitoring to prevent risks in the sector.

The case sheds light on loopholes and potential risks in China’s often opaque supply-chain finance market, which involves more than more than 500 billion yuan of securities backed by corporate accounts receivable.

Shanghai Mosan is one of the four biggest asset managers doing business with Camsing, Caixin learned. Altogether, the four companies have a combined 9 billion yuan ($1.3 billion) of products outstanding.

More than a dozen nonbanks and asset management companies also have business dealings with Camsing, raising funds for the company and its affiliates backed by their accounts receivable. But the legality of the underlying assets is now in doubt.

Shanghai Gopher Asset Management, a subsidiary of Noah Holdings Ltd. and another major fund manager of Camsing, said earlier that its 3.4 billion yuan of asset management products linked to Camsing are in danger of default. Noah levied fraud accusations against Camsing over the products and triggered the detention of Lo.

Lo founded Camsing in 1996 and acquired Stan Lee’s POW! Entertainment in 2017. Lo is the controlling shareholder of Shanghai-listed Boxin Investing & Holdings Co. Ltd., Hong Kong-listed Camsing International Holding Ltd. and Singapore-listed Camsing Healthcare.

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In Depth: Camsing Fraud Allegations Spotlight Supply-Chain Finance

According to Fasten, Shanghai Mosan has engaged in invoice factoring business with Guangdong Zhongcheng, formerly known as Guangzhou Camsing, since 2015. Fasten is 15% owned by Zhongzhi Capital, a private investment conglomerate.

Fasten said it formed an emergency group to deal with the risk and sent staff to Guangdong Zhongcheng to seek recovery of potential losses. Fasten has engaged lawyers and will take legal measures if there is any suspicion of fraud, the company said.

More to come

More financial institutions are likely to be exposed to risks related to Camsing’s scandal.

Everbright Trust, a unit of China Everbright Group, manages three products involving Guangdong Zhongcheng, data from China Trust Registration Co. showed. But Everbright Trust told Caixin that the three products are entrusted by a third party and Everbright Trust doesn’t bear any obligation or risk related to the products.

Sources close to the matter said Everbright Trust is managing the products for Xiangcai Securities, which has partnered with Camsing in supply-chain financing since 2015. Xiangcai didn’t respond to Caixin’s inquiry on the matter.

However, Shanghai-listed Harbin High-Tech (Group) Co., a company set to be acquired by Xiangcai, said in a filing last week that Xiangcai manages 557 million yuan of outstanding products backed by Camsing’s accounts receivable. Harbin High-Tech said Xiangcai has reported the case to police.

Jiangsu International Trust Corp. is also likely to be hit by the Camsing scandal with its 750 million yuan investment for 49.97% in a joint venture with Guangdong Zhongcheng in 2017.

The venture, Hangzhou Jintou Camsing Investment Management Co., raised about 1.5 billion yuan to fund Lo’s acquisition of Boxin Investing in 2017. In return, Lo pledged all her holdings of Boxin Investing to Hangzhou Jintou. However, the market value of the stake has since shrunk more than 33% to 868 million yuan as Boxin Investing’s share price declined. The stake was frozen by a court after Lo’s detention.

Jiangsu International and its state-owned parent Jiangsu Guoxin Corp. have yet to comment on the matter.

A financial report of Guangdong Zhongcheng showed that by the end of 2018, the company had payables of 1.5 billion yuan to Hangzhou Jintou Chengxing Investment Management Company, 1.48 billion yuan to Everbright Trust, 1.1 billion yuan to Yunnan International Trust Co. Ltd., 500 million yuan to Xiangcai Securities and 178 million yuan to National Trust.

Contact reporter Han Wei (

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