State Orders Takeover Of D'Long Group Assets
The Peoples' Bank of China, China's central bank, has
ordered the takeover of the D'Long Group assets by Huarong
Asset Management. The D'Long Group was once one of China's
largest private business conglomerates, but has been in
financial trouble since spring of this year.
D'long boss Tang Wanxin was taken into custody two weeks
ago, according to a Chinese magazine. D'Long vice-president
Li Qiang, who is in charge of finance, is also in custody.
The central bank also ordered the asset management company
to oversee the restructuring of the group, which owns
a wide range of seemingly unrelated assets. D'Long's 15
main creditors have been informed of the arrangement.
The central bank said it will release 7.3 billion yuan
in re-lending to Huarong to bail out a beleaguered securities
broker controlled by D'Long, according to the report.
Tang, under police investigation since August 4, is not
allowed to leave his home, although he has been allowed
to meet management officials there.
Almost all the banks in Shanghai are creditors of the
troubled company, with loans totalling 2.8 billion yuan,
earlier reports said.
D'Long is controlled by brothers Tang Wanli and Tang Wanxin,
whose wealth was estimated last year by China Money magazine
at US$250 million. The conglomerate owns a wide range
of businesses ranging from finance companies to food purveyors
to tourism interests including a military theme park built
around a former Soviet aircraft carrier Minsk, moored
near Shenzhen.
The Tang family is originally from the northwest province
of Xinjiang, which borders the states of central Asia.
When it was founded and prospered in its early years,
it was hailed by many analysts as hailing the new era
of private companies in China.
However, the group got into trouble when it diversified
into many unrelated fields. When it over-expanded, it
began to raid acquired companies for their assets. Management
from the acquired companies took their stories to the
Chinese financial media, which triggered widespread criticism
of the company.
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