The operation of this "state-owned enterprise" is difficult to understand, with 298 million shares changing hands twice a day. MCC | Kanghexin | Operation

Recently, Zhongxin Finance received a report clue that Fu Liewu, the legal representative, chairman, and general manager of MCC Jixin Health Industry Co., Ltd., had previously served as the head of two "state-owned enterprises" at Kanghe Xin Health Medical Management Co., Ltd. during which he had carried out bizarre operations, with 298 million shares changing ownership twice within a day. Is this operation suspected of violating regulations? In addition, Fu Liewu is an individual business operator of a handicraft shop called Fu Gongfang in Jinniu District. Is the CEO of a state-owned enterprise still working as a sole proprietorship? What is the truth?

Screenshot of enterprise inspection.

Bizarre operation

298 million shares transferred twice a day

According to the business registration information, MCC Jixin was established on September 23, 2019, and Kanghexin was established on November 9, 2020.

Fu Liewu, the legal representative, chairman, and general manager of MCC Jixin, also served as the legal representative and chairman of Kanghexin after its establishment. He only stepped down from Kanghexin's position in August 2021.

During the two weeks when Fu Liewu became the head of two companies, MCC Jixin and Kanghexin, he carried out "bizarre" operations:

In the first week, on November 16, 2020, Kanghexin fully acquired a natural person wholly-owned company, Beijing Kangyang Architectural Design Consulting Co., Ltd. The supervisor of the acquired Beijing Kangyang Company was Fu Liewu himself, and the legal representative was Fu Hongying.

According to Tianyancha, on November 16, 2020, the major shareholder of Beijing Kangyang changed from Fu Hongying to Kanghexin, and the enterprise type changed from natural person sole proprietorship to legal person sole proprietorship.

Screenshot of Tianyancha.

In the second week, on November 24, 2020, Beijing Kangyang invested 298 million yuan to acquire all the shares of MCC Jixin held by Jilin Trust.

On the same day, Kanghexin invested 298 million yuan to acquire all the shares of MCC Jixin held by Beijing Kangyang Company.

On November 24, 2020, MCC Jixin underwent two changes in its absolute controlling shareholder, involving funds of 298 million yuan.

Complete two equity changes on the same day

Is it compliant?

"Real state-owned enterprises and acquiring companies all have a strict process." An anonymous lawyer interviewed believes that the transfer of equity in state-owned enterprises is relatively complex. If it involves the external transfer of state-owned assets, it is generally necessary to enter the transaction process, and it is impossible to see whether the corresponding procedures have been completed from the industrial and commercial change information alone.

Wu Jingming, a director of the China Consumers Association who is proficient in company law and vice president of the Beijing Consumer Law Society, told China News that whether two equity changes were completed on the same day in accordance with the legal procedures and whether the statutory approval procedures for state-owned equity changes were fulfilled are the prerequisites for judging whether they are legal. If they are not carried out in accordance with the procedures in accordance with the law, it is considered an illegal equity change.

On August 6, 2021, the major shareholder of Beijing Kangyang changed from Kanghexin to Fu Hongying, and the type of enterprise changed back to sole proprietorship by natural persons. Afterwards, Beijing Health Care was cancelled in July 2022.

Beijing Health Care shareholder information change record. Screenshot of iQicha.

Chen Lifei, a lawyer at Beijing Yingke Law Firm, told China News Finance that it is not yet possible to determine whether the above procedures are legal and compliant based solely on the information disclosed by the industry and commerce authorities. However, such a transaction model is indeed complex and unconventional. There are many doubts about the purpose of the sale and purchase of Beijing Health Care by Kang Hexin and Fu Hongying, whether the process is legal, and whether there is any transfer of benefits. Further investigation and verification are needed.

Zhongxin Finance has made multiple public phone calls to Kanghexin and MCC Jixin, but has not been able to reach them.

Formerly served as both chairmen of state-owned enterprises

Still a sole proprietorship?

According to enterprise information query platforms such as Tianyancha, Fu Liewu is suspected to be a sole proprietorship.

Screenshot of Tianyancha

The National Enterprise Credit Information Publicity System also shows that an individual business operator named "Jinniu District Fu Workshop Crafts Shop" is Fu Liewu.

Screenshot of the National Enterprise Credit Information Publicity System

In addition, according to the enterprise information query platform, Chen Ying, the current legal representative, chairman, and general manager of Kanghexin, has also personally invested in and started a company. She has worked in multiple private enterprises and used to be the owner of nail salons and beauty salons.

The two state-owned enterprises mentioned above, one of which is the chairman of a state-owned enterprise and the other works in multiple private enterprises, are unbelievable.

Wu Jingming stated that in accordance with the requirements of the Company Law of the People's Republic of China and the Several Regulations on the Integrity of Leading Personnel in State Owned Enterprises, any part-time job outside of this enterprise must be approved by the government or the state-owned asset management department. It is illegal to concurrently serve as a director, supervisor, or executive of different companies without approval. Fu Liewu, the legal representative, chairman and general manager of MCC Jixin, was once also the legal representative of Kanghexin. It should be easy to find out what department his position and identity were, and through what procedures he was designated or appointed.

Article 5 of the "Several Provisions on the Clean and Honest Employment of Leaders of State owned Enterprises" implemented in 2009 clearly stipulates that leaders of state-owned enterprises shall faithfully fulfill their duties and shall not engage in profit-making business activities or paid intermediary activities, or invest in or invest in similar operating enterprises, affiliated enterprises, and enterprises with business relationships with the enterprise; It is not allowed to concurrently hold leadership positions in the enterprises invested by this enterprise or other enterprises, institutions, social organizations, or intermediary organizations without approval, or to receive salary and other income without authorization if approved for part-time work.

Kang Hexin Equity Penetration Chart. From Tianyancha

The penetration chart of Kanghexin's equity on Tianyancha shows that Jilin Trust holds 100% of Kanghexin's shares, and the actual controller of Jilin Trust is the Jilin Provincial Department of Finance. Kanghexin is the major shareholder of MCC Jixin, with a capital injection of 477 million yuan and a shareholding of 99.58%. Therefore, from the surface of industrial and commercial information, Kanghexin and MCC Jixin belong to the subsidiaries and grandchildren of state-owned enterprise Jilin Trust.

China News Finance reporters have sent letters to Jilin Trust and Jilin Provincial Department of Finance for interviews to verify relevant information, but as of the time of publication, they have not received a response.