FINANCE

Bank of Shanghai Wins Appeal Against Baoneng Over 2.6 Billion Yuan Debt

Published: Jul. 11, 2026 3:04 a.m. GMT+8

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The Baoneng Center in Luohu district, Shenzhen, Guangdong province. Photo: IC

Bank of Shanghai Co. has won a final court ruling to recover 2.58 billion yuan ($380 million) from Baoneng Group, marking its first conclusive victory in a broader legal campaign to reclaim nearly 13 billion yuan from the distressed Chinese conglomerate.

The Guangdong High People’s Court upheld an earlier verdict ordering Baoneng and its founder, Yao Zhenhua, to repay the loan principal plus hundreds of millions of yuan in interest and penalties, according to a recent stock exchange filing.

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Bank of Shanghai won a final ruling to recover 2.58 billion yuan from Baoneng Group.
It is seeking to reclaim nearly 13 billion yuan; two other cases won at lower courts are under appeal.
Baoneng entered a liquidity crisis in 2021 due to tightened developer financing rules.

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What Happened When

2019：: A 3.13 billion yuan loan was extended for a corporate acquisition (later subject of the fourth lawsuit).

By 2020：: Bank of Shanghai’s extensive lending to Baoneng drew public scrutiny.

Early 2021：: Baoneng Group fell into a severe liquidity crisis after Beijing tightened financing rules for developers.

Late 2023：: Bank of Shanghai filed four major lawsuits against Baoneng entities.

As of 2025：: Bank of Shanghai likely made full provisions for its entire Baoneng exposure; the bank’s corporate real estate non-performing loans roughly tripled to 3.6 billion yuan; overall non-performing loans remained stable at 1.18%.

December 2025：: Two other cases involving a combined principal of 7.38 billion yuan were won by the bank in lower courts.

In 2026：: The Guangdong High People’s Court upheld an earlier verdict ordering Baoneng and Yao Zhenhua to repay the loan principal plus interest and penalties; two cases won in lower courts in December 2025 are currently under appeal.