How a Tycoon Looted the Now-Delisted Jinzhou Port (AI Translation)

【周刊提前读】锦州港退市：一位东北富商的虚假贸易黑洞

Jinzhou Port (600190.SH) was delisted by the Shanghai Stock Exchange on July 25, 2025, becoming the first port company to face forced delisting due to financial fraud. On its final trading day in A-shares, the company’s market capitalization was only 1.261 billion yuan, an 80% decline since investigations began. From 2018 to 2021, Jinzhou Port, driven by profit motives, engaged in bogus trading with seven companies, inflating revenue by over 8.6 billion yuan and profits by nearly 180 million yuan. Further fraudulent activities from 2022 through Q1 2024 inflated profits by an additional 120 million yuan, with 16.77 billion yuan in undisclosed related-party transactions. This persistent financial fraud over four years triggered its forced delisting as decided by the stock exchange on June 28, 2025 [para. 1].

The aftermath did not dissipate with delisting. Minority shareholders filed nearly 100 lawsuits for securities misrepresentation, and over 1,000 investors in Korea Asia Yunchuang Asset Management (Shanghai) Co., Ltd., which invested in Jinzhou Port-related entities, sought legal recourse after fund products became nonredeemable [para. 2]. Behind both Jinzhou Port and Korea Asia Yunchuang was the elusive Northeast tycoon Liu Hui, who, while acting as the actual controller of Jinzhou Port, also controlled Huaxin Trust [para. 3].

Liu Hui orchestrated bogus trading to boost Jinzhou Port and Jinguotou (Dalian) Development Co., Ltd.’s performance for the purpose of securing loans from financial institutions. The capital raised was funneled into his own alumina project, and when liquidity issues emerged, wealth management companies were roped in to take over, with Liu Hui cashing out and leaving others to absorb the losses. This resulted in tens of billions in losses for Jinzhou Port and its investors [para. 3].

With the police investigating Jinzhou Port’s fraud, Liu Hui and his appointed directors left the company by the end of 2024. The controlling shareholder, Liaoning Port Group, subsequently appointed new key personnel and gained control over Jinzhou Port [para. 4]. There is potential for Jinzhou Port’s restructuring with other regional ports, but considerable uncertainties remain due to extensive litigation and a severe debt overhang, including nearly 6 billion yuan in short-term liabilities [para. 5].

Jinzhou Port, founded in 1986 and a key bulk cargo port in Northeast China, has a history marked by several waves of control struggles and was China’s first port company to undergo corporate restructuring. After various shareholder battles, Liu Hui gained control in 2013-2014, amid a background of secretive wealth and influence, including his ties to Huaxin Trust, a significant local financial institution [para. 7-9]. Once in power, Liu Hui led a series of questionable investments and related transactions that siphoned off core business to affiliated shell companies, draining assets, and culminating in substantial losses and asset impairments [para. 11-16].

Regulators found that from 2018-2021, Jinzhou Port carried out grossly inflated revenues and profits by colluding with seven companies, with Liu Hui’s affiliates controlling key points in the trading chains and acting as clearance points for funds. These were textbook cases of “financing-oriented trade” — fake commodity circulation intended solely for creating false accounts and inflating balance sheets. The scale of undisclosed related transactions reached 16.8 billion yuan between 2022 and 2024. Serious management negligence and absence of internal controls deepened the crisis [para. 24-36]. The authorities banned Liu Hui and former chairman Xu Jian from the market for 10 years and imposed heavy fines. Several key personnel, including Liu Hui, are under criminal investigation [para. 39].

Much of the illicitly raised funds was invested into ambitious exploration, notably the failed Qihui Aluminum project in Chifeng, intended as China’s largest alumina plant, which ran into cash flow crises, entered bankruptcy, and dragged in further innocent investors through dubious fund products managed by Korea Asia Yunchuang. Over a thousand retail investors now face financial losses and have filed complaints [para. 43-52].

Years of mismanagement led to declining port competitiveness, stagnating throughput, and heavy indebtedness, with liabilities of 10 billion yuan vastly exceeding available assets by 7.3 billion yuan as of March 2025. Defaults, frozen accounts, and extensive litigation have become routine. The new management’s efforts focus on stabilizing operations, optimizing assets and debt, as well as aggressively recovering disputed contract payments [para. 54-61].

Jinzhou Port’s forced delisting stemmed from systemic fraud, managerial misconduct, and the exploitation of listed companies for personal gain. The resulting fallout left investors, financial institutions, and the local economy paying a heavy price, while the port, under new management, faces an arduous path to recovery [para. 62].