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Zhao Jing, a reporter from the headquarters of Maosheng International Group Co., Ltd., located at No.1051 Xinzha Road, Shanghai
Liu Genshan, Chairman of Maosheng International Group
Liu Genshan, the former "king of highways" in Shanghai and the 51-year-old chairman of Maosheng International Group Co., Ltd. (hereinafter referred to as "Maosheng Group"), is suspected of defrauding huge sums of money and is being investigated by relevant state departments.
According to a person familiar with the Shanghai real estate industry, Liu Genshan was investigated at the beginning of this year for allegedly defrauding huge sums of money. It is said that the amount of fraud is as high as 4.3 billion yuan.
According to another person familiar with the matter, Liu Genshan was taken away by the relevant authorities about a week ago. According to relevant sources, Liu Genshan’s arrest is even more implicated in Zhejiang.
Liu Genshan, who was born in Shanghai, was familiar with Zhang Rongkun, president of Fuxi Group, and Zhang Rongkun was later called the "king of highways" in Shanghai. On the morning of June 22nd this year, the Higher People’s Court of Jilin Province made a final judgment and sentenced Zhang Rongkun to 19 years’ imprisonment.
Report letter leads to financial crisis.
2004 was the heyday of Liu Genshan, who ranked 36th in the Hurun China Rich List in 2004, with assets of 2.1 billion yuan. Liu Genshan, who is also the chairman of Shanghai Maosheng Group and the chairman of the board of directors of Hong Kong listed company Maosheng Holdings Limited, was once named as "the richest man in China".
It is worth noting that it was at the beginning of the following year that the contents of a tip-off letter sent to the Hong Kong Independent Commission Against Corruption were made public, which made the fund problem of Liu Genshan’s company widely concerned by all parties.
According to the tip-off, Shanghai Maosheng transferred a large amount of loan funds of nearly RMB 3 billion to overseas countries through illegal means such as underground banks, and some of the funds acquired Asean Resources, a Hong Kong listed company that had been suspended, and renamed it Maosheng Holdings.
The tip-off letter said that Shanghai Maosheng’s practice of transferring project funds led to the suspension of its loan construction projects in the mainland, such as two expressway projects in Shanghai and Ningbo, due to lack of funds.
As evidence, Liu Genshan invested in three expressways in Zhejiang: Ningbo Ring Expressway, Beilun Port Expressway and Yongjin Expressway.
Among them, in the 2004 Zhejiang Expressway Maintenance Inspection Report, Beilun Port Expressway Maintenance became a negative model and was criticized by name. Ningbo Transportation Bureau confirmed in April 2005 that Maosheng withdrew its capital from Ningbo Ring Expressway project in the second half of 2004.
On the evening of September 10th, 2005, Liu Genshan said in an interview at Maosheng Business Center, Xinzha Road, Shanghai, "Chongqing’s family affairs have been settled, and nearly 1 billion assets have been returned to me. Maosheng Holdings will purchase domestic highway assets in a big way in the next step."
"Road to Life" operation mode
Since the end of 2005, Liu Genshan has suddenly faded out of the public eye. Up to now, through the Shanghai 114 telephone inquiry, we can’t find the public telephone number of Maosheng Group. On the evening of July 7th, a police car was parked in the courtyard of Maosheng Business Center Building, No.1051 Xinzha Road, Shanghai, the office of Maosheng Group.
Time goes back more than 20 years. Liu Genshan and its Maosheng Group have invested in many industries for more than 20 years, including infrastructure, real estate, trade, shipping, entertainment and finance. In 1999, Liu Genshan got the first expressway project-Jialiu Expressway, and embarked on the journey of making money as a "king of highways". In the following years, Maosheng invested in seven expressways in a row.
According to the public information in 2003, all the seven highways invested by Liu Genshan adopted the operation mode of "living by road". Shanghai Jialiu Project is a project company jointly established by Shanghai Maosheng Group and Shanghai Urban Construction. The registered capital of the company is only 100 million yuan, of which 51% is contributed by Shanghai Urban Construction (Group) Company and 49% by Shanghai Maosheng Enterprise Development (Group) Co., Ltd., with an investment of less than 50 million yuan. The total investment of the project is 450 million yuan.
The second Shanghai-Qingping Highway is composed of Shanghai Maosheng Group, Shanghai Urban Construction and Shanghai Construction Engineering Co., Ltd., with 67%, 25% and 8% respectively, with a total capital of 620 million yuan and a total investment of 3.5 billion yuan. Maosheng invested 420 million yuan.
The third road, Shanghai Tongsan Expressway, started almost at the same time as Shanghai Qingping Highway, and was also jointly established by Shanghai Construction Engineering (47.75%), Shanghai Urban Construction (26.25%) and Shanghai Maosheng Group (26%). The company’s capital is 960 million yuan, the total investment is 2.88 billion yuan, and Maosheng invested 250 million yuan.
Subsequently, the investment level of Shanghai Maosheng was enlarged. Article 4 Shanghai South Ring Expressway registered capital of 800 million yuan, which was wholly owned by Maosheng Group. The total investment is 3.618 billion yuan.
Article 5 Ningbo Ring Expressway Co., Ltd. was jointly established by Shanghai Maosheng and Ningbo Communications Investment and Development Company. The company invested 1.2 billion yuan in the first phase, with Shanghai Maosheng Group as the controlling shareholder and 80% of the company’s equity. The total investment of the project is 3.65 billion yuan, and the second phase of Ningbo Ring Road (Beilun to Camel section) needs to invest 5.1 billion yuan, totaling 8.75 billion yuan. Maosheng needs a total investment of 2.5 billion yuan.
Article 6 Yongjin Expressway is jointly funded by Shanghai Maosheng Group and Shaoxing Traffic Investment Co., Ltd.. The company’s capital is 840 million yuan, of which Maosheng, as the controlling shareholder, owns 70% of the company’s shares with a total investment of 2.8 billion yuan. Maosheng invested nearly 600 million yuan.
The seventh road, Ningbo Beilun Port, was acquired. It was revealed that the acquisition cost was nearly 2.5 billion yuan.
There are luxuriant executives who sum up the trilogy of Liu Genshan’s investment highway: the first step is to seek highway resources and make strategic planning; The second step is to make a decision immediately, win the road with real potential, and decide not to go through a complicated procedure of voting by shareholders of listed companies; The third step, after the highway is completed, according to the specific situation of the capital market, put it into the listed company.