Jan 23, 2023 06:32 PM

Developer Oceanwide and Tycoon Lu Zhiqiang Sued in $1 Billion Loan Dispute

A branch of China Minsheng Bank. Photo: VCG
A branch of China Minsheng Bank. Photo: VCG

China Minsheng Banking Corp. Ltd. (600016.SH +0.57%), the country’s largest privately owned lender by assets, is suing developer Oceanwide Holdings Co. Ltd. (000046.SZ +1.50%) and its de facto controller property tycoon Lu Zhiqiang over a 7 billion yuan ($1billion) loan dispute.

The bank’s Beijing branch has filed a lawsuit against Oceanwide, Lu and two property developers based in the central Chinese city of Wuhan. The firms, namely Wuhan Centre Building Development Investment Co. Ltd. and Wuhan CBD Co. Ltd., failed to repay of debts 3.97 billion yuan and 3.05 billion yuan, respectively, China Minsheng said in a Friday stock exchange filing.

Oceanwide and Lu guaranteed the loans and are now on the hook to cover the outstanding liabilities. The lawsuit has been accepted by the Beijing Financial Court, according to the filing.

It has become common to see creditors pursuing developers for unpaid debt in China as the country’s real estate sector continues to suffer from a liquidity crunch. Triggered in mid-2021 by a series of high-profile defaults, scores of Chinese property companies have missed bond and loan repayments and consequently been cut off from much-needed funding sources. The country’s housing market remains in the doldrums, despite government support and hundreds of billions of dollars in state-backed investment.

Lu, who founded and chairs China Oceanwide Holdings Group Co. Ltd., Oceanwide’s parent, is also a vice chairman of Minsheng Bank. As of June 2022, the conglomerate and its related companies had 21.2 billion yuan of outstanding loans with the Shanghai and Hong Kong-listed lender.

China Oceanwide and related entities also own a 5.8% stake in Minsheng Bank. Some 70.5% of that has been frozen, according to a filing on Thursday.

 Read more 
In Depth: Major Evergrande Creditor Faces Wave of Bad Loans

Wuhan Centre Building Development Investment and Wuhan CBD took out loans of 4 billion in 2018 and 3.07 billion yuan in 2020 from the lender’s Beijing branch, respectively. It secured them with land and construction projects.

Minsheng Bank is seeking the priority right to repayment of the mortgaged properties, or the proceeds from auction or sale of them, according to the Friday filing.

Contact reporter Zhang Ziyu ( and editor Jonathan Breen (

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article
Open WeChat and scan the QR code
Get our CX Daily, weekly Must-Read and China Green Bulletin newsletters delivered free to your inbox, bringing you China's top headlines.

We ‘ve added you to our subscriber list.

Manage subscription