In Depth: How a Tycoon Looted Billions of Yuan From a State-Backed Port

Jinzhou Port Co. Ltd. was delisted from the Chinese mainland stock exchange on July 25, becoming the first port operator to suffer this fate. The China Securities Regulatory Commission (CSRC) found that the company had fabricated over 8.6 billion yuan ($1.2 billion) in revenue and nearly 180 million yuan in profit between 2018 and 2021. Jinzhou Port’s market value collapsed by 80% since the regulatory investigation began in late 2023, leaving the company with immense losses, stagnant operations, and heavy debt. During an internal meeting following the delisting, Chairman Yin Shihui admitted that governance and risk control at the company were seriously deficient and committed to learning from these failures. [para. 1][para. 2][para. 3][para. 4][para. 5][para. 6]

Founded in 1990, Jinzhou Port was China’s first joint-stock port company and listed its A-shares on the Shanghai Stock Exchange in 1999. Major early stakeholders included the Orient Group, controlled by then-tycoon Zhang Hongwei. Financial troubles led to a partial sale to state-backed Dalian Port in 2009, but without a clear controlling shareholder, internal power struggles ensued. In 2013, Liu Hui, a coal-turned-finance magnate from Heilongjiang and owner of Huaxin Trust, entered the scene. Through strategic investments, Liu took a 22% stake. Initially welcomed, Liu later aligned himself with Dalian Port to effectively seize control, prompting Orient Group to gradually exit. [para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15]

Liu aggressively consolidated power, becoming Jinzhou Port’s president in 2016 and launching a flurry of investments, especially through Jinguotou (Dalian) Development Co. Ltd., which he controlled. Jinzhou Port invested substantial sums in Jinguotou and its affiliates, including selling its core navigation channel and paying ongoing tolls. These and subsequent investments proved disastrous—by the end of 2024, Jinguotou was defunct and nearly 4 billion yuan in related investments were wiped out. Other similar ventures, including a container company and a shipping firm, also lost millions and went bust. Between 2022 and 2024, Jinzhou Port failed to disclose nearly 16.8 billion yuan in related-party transactions, many involving Liu’s network, including shell companies used to cook the books—ultimately resulting in massive financial losses. [para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25]

A CSRC probe in late 2023 exposed that Jinzhou Port had faked bulk commodity trades between 2018 and 2021 to inflate reported revenue and secure loans. The orchestrated scheme was a circular flow of money between companies all connected to Liu. The CSRC held Liu and former chairman Xu Jian directly responsible, barring them from participating in capital markets for 10 years and fining each 4 million yuan. In October 2024, Jinzhou police imposed criminal measures on them and other executives. [para. 26][para. 27][para. 28][para. 29][para. 30][para. 31][para. 32][para. 33][para. 34][para. 35]

Even while under investigation, Liu continued schemes—most notably defrauding Hantron Capital out of 2.5 billion yuan in a doomed aluminum company deal. Hantron’s wealth management clients now face losses, with over 1,000 affected investors, some filing police reports as repayments have halted. [para. 36][para. 37][para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46]

After Liu’s arrest, Jinzhou Port’s management was overhauled, with state-backed Liaoning Port Group appointing new leadership and taking a majority stake. The company, battling huge debts (10 billion yuan, with only 387 million yuan in liquid assets) and nearly 100 investor lawsuits, is pursuing debt recovery, litigation against Liu’s network, and urgent cost-cutting measures. Despite attempts at stabilization, operational and market challenges remain daunting. [para. 47][para. 48][para. 49][para. 50][para. 51][para. 52][para. 53][para. 54][para. 55][para. 56][para. 57][para. 58][para. 59][para. 60][para. 61]