Intermediaries claim to be able to build "firewalls" to isolate risks, starting with fake central and state-owned enterprises affiliated with businesses: clearly priced at 200000 to millions per year per company | clearly priced

Strict statement from the Research Center of the State owned Assets Supervision and Administration Commission of the State Council

On July 22, the Economic Research Institute of the National Development and Reform Commission, through its official account "Guohong High end Think Tank", cracked down on counterfeiting and said that it had no relationship with Hunan CIC Comprehensive Holding Co., Ltd. Two days ago, on July 20, the State owned Assets Supervision and Administration Commission of the State Council, a subordinate unit of the central ministries and commissions, also issued a statement on the official account that the State owned Assets Supervision and Administration Industry Development Co., Ltd. falsely used the name of the Research Center of the State owned Assets Supervision and Administration Commission of the State Council to register the State owned Assets Supervision and Administration Commission of the State Council as its sole shareholder.

According to incomplete statistics from Red Star News reporters, in addition to the above-mentioned units under the National Development and Reform Commission and the State owned Assets Supervision and Administration Commission, since July this year, many central and state-owned enterprises such as China Huarong, China Ordnance Industry Group Co., Ltd., China Three Gorges Group Co., Ltd., China Aviation Industry Group Co., Ltd., China Securities Depository and Clearing Corporation, CITIC Group, and the State Administration for Financial Supervision and Administration have successively issued "anti counterfeiting" statements, revealing the identity secrets behind multiple fake central and state-owned enterprises.

After being cracked down on counterfeits, many companies have been labeled as "counterfeit state-owned enterprises" in their business information. Some companies choose to cancel, some still exist, and some choose to put on new guises and search for new affiliated companies.

An intermediary revealed that after signing the proxy holding agreement, if it is not discovered due to the customer's own reasons, they can assist in transferring to state-owned enterprises and central enterprises at the same level, and also assist in establishing another company at the company's higher level, establishing a "firewall" to achieve risk isolation. "This way, even if it is announced to be anti-counterfeiting, it will not affect the investigation of the company."

01 Forgery of materials, impersonation of identity, intermediary reselling of shell companies with "China", "China", and "China" brand names

When Lin Feng, a fresh graduate, was looking for a job, he came across a state-owned enterprise - a secure and secure job - when he saw the word "Guochu" in a certain group company.

After paying a registration fee of 150 yuan without hesitation, on June 17th, Lin Feng participated in a written interview organized by this state-owned company in Liaoning. There were about 400 people in total for 15 marketing positions and 13 office administration positions.

Lin Feng calculated that this company can earn fifty to sixty thousand yuan from just one registration fee. After the interview, Lin Feng realized that this company was not a true state-owned enterprise. It had just been established for two years and its business was just starting. He posted his job search process online, and many netizens pointed out that Lin Feng should have encountered a "counterfeit state-owned enterprise", and many netizens also reported that he had encountered similar counterfeit state-owned enterprises.

Netizens also helped him summarize a list of "counterfeit state-owned enterprises" in Liaoning, often starting with the characters "China", "National", and "China". The reporter learned that in order to clean up counterfeit central state-owned enterprises, on October 22, 2021, September 20, 2022, and April 25, 2023, the website of the State owned Assets Supervision and Administration Commission of the State Council announced three batches of counterfeit central enterprises, totaling 548. From the name alone, these enterprises are similar to legitimate central and state-owned enterprises: there are 311 enterprises with the prefix "Zhonghe", "Zhongjian", "Zhongnong", "Guochu", "Guokong", etc. Some of them are prominently displayed in the business registration information as being 100% controlled by the State owned Assets Supervision and Administration Commission, resembling a legitimate state-owned enterprise.

An intermediary involved in company affiliation business claims, "If you open a company and give money, you can become a legitimate wholly-owned subsidiary of a state-owned enterprise or central enterprise in the industrial and commercial registration information. Afterwards, you can use the name of a state-owned enterprise to have the human resources company collect money to recruit people. Some people who want to enter a state-owned enterprise or central enterprise will also spend tens of thousands to 200000 yuan to work in your company, and even deceive some customers into thinking they are cooperating with state-owned enterprises and taking on more projects." However, the affiliation business that the intermediary engages in mostly involves forging industrial and commercial information, and the affiliated company is not aware of it.

The background of state-owned and central state-owned assets is very attractive to many enterprises. At the end of April this year, the Changshou police in Chongqing cracked a major case of falsely issuing value-added tax special invoices involving a total amount of over 1.7 billion yuan. The team used multiple shell trading companies to invest heavily in affiliated subsidiaries of state-owned enterprises, making the involved companies appear to have a state-owned and central enterprise background in equity relationships, in order to obtain value-added tax special invoices.

▲ In the social circles of multiple intermediaries, they often promote their affiliated businesses through "mixed ownership reform of state-owned enterprises"

"The mixed ownership reform of state-owned enterprises, central enterprises, and public institutions! Let private enterprises become subsidiaries of state-owned enterprises, and hold shares on behalf of them without participating in business management." In the social circles of many intermediaries, they often use the "Guiding Opinions on Deepening the Reform of State owned Enterprises" issued by the State Council on August 24, 2015 as a language to promote the affiliated business of "mixed ownership reform of state-owned enterprises". In their promotion, this business is aimed at deepening the implementation of the State Council's "encouraging state-owned capital to invest in non-state-owned enterprises in various forms". Central enterprises and state-owned sole proprietorship companies under state-owned enterprises plan to recruit and invest in some excellent private enterprises, attempting to put a "legal coat" on their affiliation behavior.

Most intermediaries themselves engage in agency services for enterprises such as industry and commerce, taxation, etc. They often publish articles on platforms such as Zhihu, Weibo, and Tieba, promoting the advantages of affiliated state-owned enterprises and central enterprises, and leaving contact information in hidden corners such as pictures. In addition, they also promote their involvement in corporate credit recovery business, such as deleting bad records such as administrative penalties and corporate litigation. Not only that, they also claim to be able to delete records of counterfeit state-owned enterprises on business information.

The resale of shell companies such as "Zhongzi", "Guozi", and "Huazi" is also one of the counterfeit state-owned enterprise businesses. An intermediary explained, "Nowadays, strict approval is required for the name of a company that wants to apply for the above name, and it is even more difficult to have a state-owned enterprise background without regional names." The reporter noted that before 2019, private enterprises could indeed obtain the titles of "national" and "medium" by seeking state-owned equity participation and other forms. Later, various regions began to standardize the names of participating enterprises. For example, in August 2019, Beijing required that companies that were converted to state-owned equity after the mixed ownership reform should not have the name of a municipal enterprise or use the trademark and name of a municipal state-owned enterprise in principle, and their use must be reported to the Municipal State owned Assets Supervision and Administration Commission.

A frontline staff member from a local industrial and commercial administration department told Red Star News reporters that from public information, many pseudo state-owned enterprises and central enterprises used to register similar font names to create a false impression that they were related to state-owned enterprises and central enterprises. After the introduction of relevant regulations, many illegal elements even took risks and directly used the method of providing false business registration, forging materials to fake identities.

The frontline staff of the local industrial and commercial administration departments mentioned above introduced to Red Star News reporters that currently, the main way for enterprises to register for business is through "formal review". The industrial and commercial department mainly reviews whether the materials are complete, and the authenticity of the materials is the responsibility of the applicant. This also gives some room for loopholes to be avoided. "Unlike substantive review, if the forged official seal, signature, etc. are very realistic in the early stage, it is relatively easy to pass the review under" formal review "." The reporter noted that in order to optimize the business environment and stimulate market entrepreneurship and innovation vitality, the newly revised "Regulations on the Administration of Market Entity Registration" will be officially implemented in March 2022. The regulations specify that the registration authority will conduct "formal review" on the application materials submitted during the registration process, and ensure that the materials are complete and comply with the law. "Confirm the form and register it on the spot.

02 Affiliation with clear code prices ranges from 200000 to several million yuan per year

"The investigation is now very strict, and there are too many accidents. If you are directly affiliated with a state-owned enterprise or a central enterprise with a higher level, you may not be able to do it for a few days and will be announced by your superior company to crack down on counterfeits." An intermediary surnamed Ma from Beijing revealed that it is not easy to find a stable platform to do projects and can be affiliated with. The intermediary then recommended a higher cost-effective and lower risk public institution to Red Star News reporters.

The intermediary introduced that the affiliation process first needs to determine the main company and matching resources, sign a holding agreement, deliver the first payment, and then have the intermediary assist in operating the business change. After obtaining the business license, the final payment will be paid, and the registration fee will be renewed once a year, with prices ranging from 200000 to several million yuan.

▲ Intermediary promotion, companies such as State Grid and China Construction can all be affiliated

The fee for affiliation is mainly based on the affiliation subject and affiliation level. According to the above intermediary introduction, the affiliated entities are divided into State owned Assets Supervision and Administration Commission, local State owned Assets Supervision and Administration Commission, and public institutions. Public institutions are the cheapest and have relatively low levels of ownership. There are also well-established enterprises such as State Grid, China Construction, China Machinery, CNOOC, and China Electric Power Construction available for selection. In addition, depending on the level of affiliation, the prices also vary. "Two affiliations and three inspections are the most rigorous, difficult to affiliation, and the prices are also the most expensive."“

Another intermediary surnamed Zhong recommended China State Construction Group Co., Ltd., which is 100% owned by the State owned Assets Supervision and Administration Commission. The annual fee for "three hanging and four hanging" is 1.5 million yuan, and the fee for "four hanging and five" is about 500000 yuan. "We usually let customers choose" four hanging and five ", and the annual fee is only 400000 to 500000 yuan, which is low in level, relatively safe, and cost-effective.".

The intermediary revealed that the higher the level of affiliation, the greater the chance of being discovered. "The government has a specialized department under investigation." The reporter noticed that in April this year, China Construction Group Co., Ltd. issued a notice stating that for a long time, illegal elements have registered the enterprise as a subsidiary of China Construction Group and conducted business under the name of a subsidiary of China Construction Group by forging relevant materials. After verification by the group, 16 companies including China Construction Southwest Energy Co., Ltd. and Zhongcheng Construction Investment and Development Group Co., Ltd., as well as their subsidiaries at all levels, are counterfeit state-owned enterprises and have no affiliation or equity relationship with the group, nor any investment, cooperation, or business relationship. All of their actions are unrelated to the group.

"If you insist on becoming a high-end state-owned enterprise, there are also state-owned enterprises and central enterprises, and I can find it for you even if it costs money, but that's not necessary. There is a company called China Guoxin, which can be seen in a search of hundreds of fake companies, and it is easy to be announced for counterfeiting. The money spent is not cost-effective." The intermediary refers to China Guoxin Holdings Co., Ltd., established in 2010 and 100% controlled by the State Council.

The above intermediary introduction, for example, Guoxin Hongyuan Investment Co., Ltd. belongs to the second tier and third tier of China Guoxin. According to Tianyancha, Guoxin Hongyuan Investment Co., Ltd. is a member of China Guoxin Group and is 100% owned by Guoxin Hongsheng Investment Co., Ltd., which is also 100% owned by China Guoxin Holdings Co., Ltd. After being affiliated with a state-owned enterprise, Guoxin Hongyuan Investment Co., Ltd. has fully held shares in six subsidiaries to the outside world. In the industrial and commercial registration information, these six subsidiaries have also transformed into members of China Guoxin, fully controlled by the state-owned enterprise China Guoxin.

In the anti-counterfeiting announcements released since July this year, Guoxin Hongyuan Investment Co., Ltd. has been prominently listed. On July 8th and 15th, China Guoxin twice issued a solemn statement regarding relevant entities impersonating the name of our company, which involved 11 enterprises including Guoxin Hongyuan Investment Co., Ltd. and Shenzhen Langyikang International Holding Group Co., Ltd. As of August 1st, Shenzhen Langyikang International Holding Group Co., Ltd. has been identified as a counterfeit state-owned enterprise, and the general manager, executive director, and others have all withdrawn. Guoxin Hongyuan Investment Co., Ltd. is still in existence.

03 Expert with the largest proportion of construction enterprises: The root cause should be cracking down on the unequal status between state-owned enterprises and private enterprises

According to official data, there are currently a total of 98 central enterprises under the supervision of the State owned Assets Supervision and Administration Commission. These 98 central enterprises have established numerous subsidiary and subsidiary enterprises due to the needs of enterprise reform and development. The vast system also provides opportunities for many illegal elements to take advantage of. On July 22nd, the Economic Research Institute of the National Development and Reform Commission announced a crackdown on counterfeiting, stating that it has no relationship with Hunan Zhongtou Comprehensive Holdings Co., Ltd. A few days ago, the State owned Assets Supervision and Administration Commission of the State Council, a subsidiary of central ministries, also issued a statement stating that the State owned Assets Supervision and Administration Industry Development Co., Ltd. falsely used the name of the State owned Assets Supervision and Administration Commission Research Center to register the State owned Assets Supervision and Administration Commission of the State Council as its sole shareholder.

▲ The Economic Research Institute of the National Development and Reform Commission cracked down on counterfeiting through the official account of "Guohong High end Think Tank"

According to incomplete statistics from Red Star News reporters, in addition to subordinate units of the National Development and Reform Commission and the State owned Assets Supervision and Administration Commission, since July this year, many central and state-owned enterprises, including China Huarong, China Ordnance Industry Group Co., Ltd., China Three Gorges Group Co., Ltd., China Aviation Industry Group Co., Ltd., China Securities Depository and Clearing Corporation, CITIC Group, and the State Administration for Financial Supervision and Administration, have successively issued "anti-counterfeiting" statements.

The State owned Assets Supervision and Administration Commission of the State Council has issued three batches of counterfeit central enterprises in recent years, totaling 548. According to the reporter's preliminary statistics, there are about 100 construction companies, 51 new energy industry companies, and 14 health industry companies. In 2022, China Power Construction Group announced 151 fake state-owned enterprises involving itself on its official official account; In addition, China Railway Engineering Group Co., Ltd. and China National Petroleum Corporation Limited are often falsely registered as shareholders. Among the three batches of anti-counterfeiting lists released by the State owned Assets Supervision and Administration Commission, there are only one third level company under China Railway Engineering Group Co., Ltd. There are a total of 32 counterfeit state-owned enterprises in various branches of China Aviation Airport Construction Corporation, such as Northwest Branch of China Aviation Airport Construction Corporation and Dalian Branch of China Aviation Airport Construction Corporation.

Under a third level company of China Railway Engineering Group Co., Ltd., there are a total of 32 counterfeit state-owned enterprises in various branches of China Aviation Airport Construction Corporation

After being cracked down on counterfeits, many companies have been labeled as "counterfeit state-owned enterprises" in their business information. Some companies choose to cancel, some still exist, and some choose to put on new guises and search for new affiliated companies. The intermediary surnamed Zhong mentioned above mentioned that in addition to signing a holding agreement with a central enterprise, they will also sign a consulting service agreement with the intermediary company. If the client is not discovered due to their own reasons, they can assist in transferring to the same level of state-owned enterprises and central enterprises, or wait for good opportunities under their own name without spending any more money. In addition, they can also assist in establishing another company at the higher level of the company, establishing a "firewall" to achieve risk isolation, "so that even if they are announced for anti-counterfeiting, it will not affect the accountability of the company."

For rights protection state-owned enterprises, the actual operation process of discovering and handling counterfeit state-owned enterprises is not smooth. A head of the legal department of a state-owned enterprise reported to Red Star News reporters, "Currently, the cost of counterfeiting registration is low, such as forging legal person certificates, official seals, and the signature of the responsible person. On the other hand, the cost of investigation is high, and accountability is not in place, which are all pain points in cracking down on infringement and counterfeiting."

At the beginning of 2021, China Resources Group discovered that a subsidiary managed by the group had been falsely registered as a shareholder by a Shanxi Beidou Navigation Data Company. Zhang Gang, Deputy General Counsel of China Resources Group, said in an interview with the "State owned Assets Report" magazine, "It was a coincidence that we were able to discover this counterfeit state-owned enterprise. Some people suspected the true identity of this unit during the process of conducting business with it, and then consulted with our group through the State owned Assets Supervision and Administration Commission whether the company is a subsidiary of our group."

The reasons for being discovered, in addition to being reported, are also some of being caught on their own. According to the above intermediary introduction, some private enterprises feel that their strength is not enough when bidding and they want to find a background to win the project. The intermediary said, "Everyone knows it well, and they don't even go to the higher ups to verify and investigate. But some customers go to the higher ups themselves to verify and ask if the company they want to affiliated with is their subordinate, and the higher ups insist on kicking them out. In this case, we will definitely not be able to refund the money."

Lawyer Wu Shizhu, Director and Senior Partner of Jiangsu Shengdian Law Firm, pointed out that registering a real state-owned enterprise as a shareholder without the consent of the real state-owned enterprise is a confusing behavior that leads to people mistakenly believing that there is a specific connection with it, damages the market competition order, infringes on the enterprise name rights of the impersonated person, and can constitute unfair competition. In addition to administrative violations, such as counterfeiting state-owned enterprises for illegal operations, there are also other legal responsibilities involved. For example, suspected forgery of official documents and seals, suspected false registration, violates criminal law; If one uses their identity to conceal the truth for profit, such as impersonating the person in charge of a central enterprise, they are suspected of committing fraud or contract fraud.

▲ State owned Assets Supervision and Administration Commission of the State Council Supervision and Administration Commission's Enterprise Property Rights Information Query Platform

In order to promote the resolution of the problem of fake state-owned enterprises, relevant departments such as the State owned Assets Supervision and Administration Commission and various central enterprises have also taken many measures in recent years. On November 17, 2022, the State owned Assets Supervision and Administration Commission (SASAC) launched the "State owned Assets Supervision and Administration Commission of the State Council Enterprise Property Rights Information Query Platform". The public can log in to the query platform, enter the enterprise name or unified social credit code to check whether the enterprise is a central enterprise. If it is a central enterprise, they can view basic information such as the central enterprise to which the enterprise belongs and its relationship, property rights level, registration location, registered capital, the largest central enterprise shareholder and shareholding ratio.

"To solve the problem of fake central enterprises from the root, it is necessary to break the unequal status between state-owned and private enterprises, achieve equal status, common development, fair competition, mutually beneficial cooperation, equal supervision, and equal protection, so that state-owned and private enterprises can enjoy the same market access opportunities." Liu Junhai, director of the Institute of Business Law at Renmin University of China, emphasized that in addition, from the perspective of company law, it is necessary to improve the company registration system, including company establishment registration, company change registration, and company cancellation registration, to break the curse of fake central enterprises and fake state-owned enterprises being difficult to thoroughly investigate.