Two major effects of the Huanghao case

Chu Shanwen Recently, a report on the German capital executive partner, Shanghai Huixin Investment Group Chairman Huanghao "suspected illegal absorption of public deposits were arrested" news, attracted the attention of Chinese venture capitalists. According to media reports, Huanghao is in the afternoon of May 10, in Shanghai International Conference Center attended Shanghai Huixin Investment Group (hereinafter referred to as "Hui le Group") and Hainan Wuzhishan Group stock Exchange contract signing ceremony, in the bathroom by the Shanghai Municipal Public Security Bureau by the two units of the police took away, At the same time was taken away by the financial director of Hui Lok Group, the prosecution of the state.　　A number of other senior executives of the group were also called by the police to assist in the investigation. This is China's first widely watched case of the alleged illegal absorption of public deposits by the head of the venture company. Prior to that, China had the precedent of being sentenced by the head of a venture capital company for illegally absorbing public deposits. June 2008, including China Ding Xin Venture Capital Co., Ltd., the former president of Chen Qingchun, including three senior executives, has been Beijing Xicheng District People's Court sentenced to up to 5 years 6 months of imprisonment.　　Ding Xin Chuang surrendered involved in the amount is not large, so in the venture industry has not aroused high concern. The Huanghao case is obviously different.　　Overall, the Huanghao case has two major impacts on China's venture investment industry. The impact will make it more prudent for local government-led funds to choose managers. The official website of Hui Le Group has revealed that Huanghao, as an executive partner of the Tak-thick Capital China Growth Fund, is an industrial investment fund set up in Tianjin on June 11, 2008, with a fund scale of RMB 1 billion, and its operating headquarters in Shanghai Lujiazui,　　Its two major limited partners (i.e., investors), including the Tianjin Binhai New Area venture capital Investment Guide Fund, as well as Tianjin Hi-tech Zone state-owned assets authorized operation unit of Tianjin Hai Tai Holding Group Co., Ltd. The involvement of the Fund, at least to a large extent, demonstrates the legitimacy of the venture's operations. Because the conditions that guide the fund to choose managers are extremely harsh, there is a rigorous selection process. In simple terms, the founder, manager, trustee, lifetime of the China Growth Fund of Tak-thick capital is no different from the domestic mainstream venture. But if you look closely, it is quite intriguing.　　The only two executive partners, including Huanghao, are very young, Huanghao or generation, as the main managers of the Fund's investment experience, investment performance, is sufficient to obtain guidance fund investment, pending research. It is unclear whether Huanghao's involvement was solely related to the Shanghai Huixin Group, which was Chairman, or to the capital of Germany. If it involves the operation of its capital in Germany, then its enthusiasm for the active setting up of the guiding fund for the local governments of China is undoubtedly a chilling blow to the winter pledge.　　Imagine if there is a wealth of investment institutions to choose the experience of the large well-known guidance fund-Tianjin Binhai New Area venture capital Investment Guide Fund will also be "mistaken", not to mention other places, especially in the less developed areas of the Venture Investment guidance Fund. Impact of the second venture in raising fundswill be more stringent in preventing the illegal absorption of public deposits.　　Before the Huanghao case, most of the private equity funds that violated the crime of illegally absorbing public deposits were concentrated in the two-tier private equity fund. For example, March 13, 2009, the Second Intermediate People's Court of Shanghai, Zhejiang Merchants Securities Co., Ltd. Shanghai, Sichuan Middle Road Sales Department of the original general manager Xu to make a first-instance judgment, to illegally absorb public deposits and misappropriation of funds for two crimes and penalties, sentenced to 10 years in prison. Court heard that Xu to the name of the business department and customers to sign entrusted financial management, Treasury bonds repurchase agreements, and commitment to guarantee and pay fixed income, this behavior is a disguised form of absorption of public deposits,　　and absorb the huge amount of funds (total absorption of funds amounted to 237 million yuan), the absorption of objects are not specific personnel, so the illegal absorption of public deposits crime, and should be directly responsible for the unit in charge of the staff to bear criminal responsibility. The more famous cases of illegal absorption of public deposits include the Sun Daxu case, the Tak Heng Securities case, and so on. For the very sensational case of the de-Heng Securities, the court found that although the de-Heng Securities did not use the way of deposit to the society to absorb funds, but its commitment to repay and pay the fixed income and the nature of the absorption of the public deposit debt service is not fundamentally different, objectively seriously disturbed the state's financial management order,　　The nature of absorbing public deposits illegally disguised in disguise without the approval of the People's Bank of China constitutes the crime of illegally absorbing public deposits. In addition, the illegal fund-raising for the first half of the market, is more than the court identified as the crime of fund-raising fraud. In December 2006, the High People's Court of Shanghai sentenced to life imprisonment for the Pan Xuecheng of the accused, and the confiscation of the property by 600,000 yuan.　　Pan Xuecheng's main criminal fact is that Xi ' an Hyundai new Agricultural AG will be listed overseas as the name of the illegal sale of shares to not specific investors. In the Huanghao case, we are not clear on the specific case. But according to media reports, Wang Degen, director of the group, said he entered the August 2006 music, investment 800,000 yuan, such as his shareholders in the Hui Le Group at least 300. Moreover, although at that time the company did not agree to a fixed return on investment, but 2007, 2008 years have been red, two years are 10%. The group was founded in 2006 years, and in 2007 and 2008 all dividends were 10%.　　Such a short investment cycle, for the real sense of venture capital, it is difficult to imagine. In a word, when raising funds, venture capital should have a deep understanding of the crimes related to illegal fund-raising, that is, the crime of illegally absorbing public deposits as stipulated in the 176th article of the Criminal law, and the crime of collecting funds in the 192th article of the Criminal law.　　At the same time, it is also understood that the circular on issues related to the suppression of illegal financial institutions and illegal financial operations, as well as the provisions on the further suppression of illicit fund-raising activities, on illegal fund-raising. An obvious rule is that "the commitment to repay the funds for a certain period of time" is illegal fund-raising. This is oftenOften neglected by the managers of the venture investment institutions.　　Last year, when a venture capital was raised, it was in fact a disguised form of illegal fund-raising for investors to buy back the funds of investors after the expiry of the fund for 8% of their annual income. (Chu Shanwen)