Futures Firm Linked to Fugitive Tycoon Seized by Securities Regulator

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The China Securities Regulatory Commission (CSRC) in a Friday statement said it has taken over Hehe due to serious governance and management issues

China’s securities regulator has taken control of Hehe Futures Co. Ltd., a futures company linked to insolvent investment firm Shanghai HHSC Capital Management Co. Ltd. and its fugitive chairman Lin Qiang.

The China Securities Regulatory Commission (CSRC) in a Friday statement said it has taken over Hehe due to serious governance and management issues.

A special takeover team has been established to oversee the company’s operations, and Gelin Dahua Futures Co. Ltd. has been appointed to form a designated custodial team to manage Hehe, the commission said.

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The China Securities Regulatory Commission (CSRC) took control of Hehe Futures Co. Ltd. due to governance issues linked to its parent company, Shanghai HHSC Capital Management Co. Ltd., which is embroiled in a massive fraud case with losses of 100 billion yuan ($14.1 billion).
CSRC appointed Gelin Dahua Futures Co. Ltd. to manage Hehe's operations, with oversight lasting one year, extendable as needed.
Hehe's parent, HHSC, allegedly sold illegal products worth 30 billion yuan; its chairman Lin Qiang fled China and was arrested in Indonesia in October 2023.

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Who’s Who

Hehe Futures Co. Ltd.: Hehe Futures Co. Ltd. is a futures company seized by China's CSRC due to serious governance issues. It is part of a network associated with the insolvent Shanghai HHSC Capital Management Co. Ltd. and its fugitive chairman Lin Qiang. Established in 1993, Hehe is partly owned by entities blacklisted for violations. A custodial team, guided by CSRC, aims to stabilize Hehe and protect investors' rights. The takeover is set for a year, possibly extendable.

Shanghai HHSC Capital Management Co. Ltd.: Shanghai HHSC Capital Management Co. Ltd. is an insolvent investment firm allegedly involved in defrauding nearly 50,000 victims, causing a loss of 100 billion yuan ($14.1 billion). Established in January 2016, it offers various investment services but failed to repay 30 billion yuan in wealth management products since August 2023. Its chairman Lin Qiang fled China but was arrested in October and is linked to illegal fundraising activities.

Gelin Dahua Futures Co. Ltd.: Gelin Dahua Futures Co. Ltd. has been appointed by the China Securities Regulatory Commission to form a designated custodial team to manage Hehe Futures Co. Ltd. as part of a special takeover. This custodial team will work under CSRC's guidance, aiming to ensure Hehe's stable operation and safeguard investors' rights.

Shanxi Jida Engineering Co. Ltd.: Shanxi Jida Engineering Co. Ltd. is a company that holds a 40% stake in Hehe Futures Co. Ltd. It is controlled by Wen Jifu, who is a business associate of Lin Qiang. Shanxi Jida was blacklisted by regulators for violations. The company is part of the complex business network associated with Shanghai HHSC Capital Management Co. Ltd., embroiled in a major financial scandal involving allegations of illegal fundraising.

Shanghai Yiheng Investment Management Co. Ltd.: Shanghai Yiheng Investment Management Co. Ltd. is a 30% owner of Hehe Futures Co. Ltd. and is an affiliate of Shanghai HHSC Capital Management Co. Ltd. The company has been blacklisted by regulators for violations. It is part of a network tied to Lin Qiang, the fugitive chairman of HHSC, who fled China after the firm was linked to illegal fundraising and insolvency issues.

Shenzhen Yujin Zhongkun Equity Investment Fund Management Co. Ltd.: Shenzhen Yujin Zhongkun Equity Investment Fund Management Co. Ltd. is one of the shareholders of Hehe Futures Co. Ltd., owning a 30% stake. It is affiliated with Shanghai HHSC Capital Management Co. Ltd. and has been blacklisted by regulators for violations. The company's shareholding structure ties it to HHSC, which is embroiled in fraud allegations and illegal fundraising.

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