Quanshi convenience stores were suspiciously 'sold', leaving a large number of investors unable to recover their debts. As creditors pressed, a mysterious 'bet-on agreement' emerged, leading to suspicions that the mastermind was playing a game of escape. Who owns Quanshi convenience stores now? This is the most pressing question for investors in Quanshi financing products. Currently, behind Quanshi, Shanhai Lantu, Hanya Capital, and Fuhua Group have all taken the stage, performing a confusing drama. On the stage, the protagonist is Beijing Quanshi Sanliuwu Chain Convenience Store Co., Ltd. (hereinafter referred to as 'Quanshi'), along with Fuhua Holdings Group (hereinafter referred to as 'Fuhua'), the guarantor of Quanshi financing products and major shareholder of Quanshi; Shanhai Lantu, the acquirer of Quanshi; Hanya Capital, the related party of Quanshi financing products; and investors whose hundreds of millions in principal have vanished, running around like ants on a hot pan. Since the beginning of this year, Quanshi has repeatedly been rumored to be sold to Shanhai Lantu. Currently, based on information from multiple channels, Quanshi, which Suning Tesco failed to buy, now has its signboards, logos, stores, official WeChat accounts, and even employees all belonging to Shanhai Lantu, a company newly established at the end of 2018. Interestingly, on July 9, Hanya's president Cao Chunhua was still denying to investors that Fuhua had sold Quanshi. At this moment, a 'bet-on agreement' for the 'sale' appeared. Investors suddenly discovered that their money had become chips on the 'gambling table' without their knowledge. Ming Jie, an investor in Quanshi financing products, revealed to Shijie: While being pursued for principal and interest, Quanshi's parent company Fuhua showed investors a bet-on agreement signed between Quanshi and Shanhai Lantu, in which Fuhua's chairman Wang Xin borrowed 300 million yuan from Shanhai Lantu in his personal name, mortgaging Quanshi's stores in Beijing, Tianjin, and Chengdu. If the money was not repaid by the deadline, the stores would belong to Shanhai Lantu. Now that Quanshi has no money to pay principal and interest, and after the signboards and stores have been transferred to Shanhai Lantu, the whereabouts of Quanshi's huge investment funds are unknown, and investors do not know who to hold responsible. The drama is not over, but no one can provide the next script. Investors do not know what roles Quanshi and other companies are playing, only that they are ambiguous. Sudden Explosion! The Long Road to Debt Collection At the end of March 2018, Ming Jie learned about Quanshi's financing products through Hanya Capital's Tianjin branch. He visited Suning Xiaodian, Bianlifeng, and Quanshi convenience stores in Tianjin and Beijing for comparison. At that time, Quanshi was ambitiously announcing its strategic goal of '1 million terminals', planning to become the world's largest convenience chain brand, with 350 stores, with Beijing as its base, having the most stores, surpassing 7-Eleven and Haolinju Convenience in the same region. Ming Jie felt Quanshi was developing well. He then invested 1.5 million yuan in a targeted financing product for a six-month term. According to the contract, Quanshi was supposed to repay principal and interest on October 8, 2018. Unexpectedly, the 1.5 million yuan, including principal and interest, suddenly could not be recovered. In October 2018, Ming Jie received two notices of delayed interest payment, first delayed by 10 months, then changed to 6 months. In November, it suddenly changed to returning principal and interest in installments over two years starting from 2019, with quarterly payments of about 10% each. In addition to Ming Jie, many other investors learned about and purchased Quanshi products through Hanya Capital branches in Shenyang, Tianjin, Sichuan, and other cities. Shijie found that Fuhua acted as the guarantor for the financing products issued by its subsidiary Quanshi, sold through Hanya, and the three parties were closely related. But before purchasing, Ming Jie did not notice that Fuhua was a major shareholder of Quanshi, and no one reminded him. He only knew that Fuhua was the guarantor, and since Fuhua Group had strong financial resources and a solid reputation, he felt relatively at ease.
▵ Fuhua guarantees Quanshi financing products
In fact, Fuhua Group controlled up to 220 companies, and at that time had already invested in Quanshi convenience stores through Shenzhen Jiusheng Fund Management Co., Ltd. Diqiugang and Haixiang were its holding companies. In August 2018, Fuhua's subsidiary Haixiang experienced a 'thunder' incident. It is reported that Haixiang had over 70,000 investors and 4 billion yuan in existing deposits. The incident affected Fuhua's financial support to Quanshi, which is why investors like Ming Jie could not get their money back. At that time, some media analyzed that various signs and capital flows indicated that Fuhua had major suspicions of illegal fundraising. Lawyer Du from Sichuan Yongmao Law Firm told Shijie, The funds from Quanshi's targeted financing products should have been used solely for Quanshi's operations, and the whereabouts of the funds should be investigated. If it is verified that the funds ultimately flowed into Fuhua or Wang Xin's personal accounts, then Fuhua is suspected of illegal fundraising. The major impact of the Haixiang incident made Ming Jie feel anxious. In addition, his younger brother also worked in a related industry. After exchanging information, they began to worry about this investment under Fuhua's guarantee. The repayment period arrived, but Quanshi was rumored to be acquired by Shanhai Lantu, causing the repayment to be delayed repeatedly. It was not until April 20, 2019, that Ming Jie recovered 20% of his interest, 12,000 yuan. According to the original repayment contract, the annual interest on 1.5 million yuan was 8%, and the six-month income should have been 60,000 yuan, with principal and interest paid together at maturity. But now the principal is still nowhere to be seen. Ms. Dong told Shijie that her uncle-in-law invested 1.6 million yuan in Quanshi convenience store targeted financing products through Hanya on August 23, 2018, for a one-year term with an 11% yield. Out of caution, Ms. Dong checked Hanya on relevant national information websites and saw that its financial qualifications were complete, so she felt reassured.
▵ Ms. Dong's family member's subscription slip for 1.6 million yuan investment
After the Haixiang incident, Ms. Dong's family also felt uneasy. In October of the same year, she went to Beijing on behalf of her uncle-in-law. The investment consultant received her in Hanya's office and reassured her: 'You know Chang'an Avenue? Fuhua has buildings on Chang'an Avenue. Selling just one piece would be enough to pay back the money. Buildings on Chang'an Avenue are not something you can buy just because you have money.' This suggestive description successfully reassured Ms. Dong again. But around the Spring Festival, Quanshi was rumored to have been sold to Shanhai Lantu, and Ms. Dong began to hear that other early investors could not get their money back with interest. Anxious, she contacted her investment consultant for information, but the consultant told her: Fuhua owes me wages, I have resigned. To be honest, I didn't get a single cent of commission from your 1.6 million yuan investment. It was not only Ms. Dong's family's investment consultant who was owed wages. After the capital chain broke last year, Fuhua was exposed by multiple media outlets, self-media, or private social platforms for owing employee salaries, with a large number of employees demanding payment. According to China Business Journal reports, at that time, Quanshi alone owed 215 employees 7.9 million yuan in wages, and owed suppliers in Chongqing and Chengdu a total of over 40 million yuan. Investors like Ming Jie felt something was wrong and began to inquire about information from all parties. The contract showed that the financing products were issued by Quanshi Sanliuwu, and the seal was also Quanshi Sanliuwu's. In March 2019, Ming Jie and other investors went to Quanshi's Beijing office to ask about the repayment date of the financing products. However, they got an unexpected answer. A deputy general manager of Quanshi responded: 'I didn't even know Quanshi had issued financing products! Quanshi still owes suppliers money. If we had this financing, we could have paid them off long ago. All our cash is controlled by Fuhua. We only have as much money as the finance department gives us.' Would Quanshi's money be controlled by Fuhua? There have been precedents for similar situations. An editor from 36Kr told Shijie that 36Kr had previously obtained solid evidence that Fuhua's holding company Diqiugang, before its collapse, received 40 million yuan from investors designated for Diqiugang. But as soon as the 40 million arrived, it was immediately transferred to Fuhua's account. Diqiugang CEO Han Jitao said he had communicated with Fuhua multiple times to get the money back, but still could not. Until Diqiugang collapsed, it never received the money from Fuhua. Moreover, senior executives would not appear for interviews, not even a punctuation mark. At the same time, insiders revealed to 36Kr that Quanshi convenience stores were the same; the money was managed by the group, and they needed to apply to the group for funds, and it was difficult for them to get approval. The next day, when investors went to Quanshi to find the 'outspoken' deputy general manager, he told them: I have been warned by the company, don't ask me anymore. After that, Quanshi always said it had no money, and Ming Jie, Ms. Dong, and a large number of investors began a long road to debt collection. During this process, Wang Xin did not show up. Since the Haixiang incident last year, Wang Xin had only appeared in video conferences, claiming to be in Hong Kong and promising not to transfer assets.
▵ Wang Xin participating in a video conference, screenshot
Whose Quanshi? A 'Bet-on Agreement' Appears To get money back, it is necessary to clarify who Quanshi belongs to now. Who has the money to be responsible? Just as the debt collection was at a standstill, a mysterious 'bet-on agreement' appeared. In April 2019, over a hundred investors went to Fuhua's company to demand principal and interest in person. Fuhua, helpless, was willing to show a bet-on agreement. Ming Jie told Shijie that three days later, this bet-on agreement was shown to investor representatives by Fuhua's CFO Li Baoqin and Hanya's president Cao Chunxia, with six people present. The agreement showed that around February 2019, Quanshi mortgaged its stores in Beijing, Tianjin, and Chengdu to borrow 300 million yuan from Shanhai Lantu, with repayment expected in July. This bet-on agreement did not have an official seal; it was signed by Fuhua's chairman Wang Xin in his personal name with Shanhai Lantu, and only Wang Xin's signature was at the bottom. The agreement stipulated that if the loan was not repaid by July 2019, the stores would belong to Shanhai Lantu. On February 13, 2019, according to 36Kr reports, Quanshi had been acquired by Shanhai Lantu. The on-site recording provided by Ming Jie shows Hanya Capital's president Cao Chunxia mentioning: 'We will set up a joint venture with Shanhai Lantu, each contributing 100 million yuan.' But she was immediately interrupted by others: 'Don't say the numbers!' Later, she mentioned, 'President Wang asked me to show this agreement to everyone, which is already very frank.' The recording also contains words like 'equity pledge information, cannot be disclosed'. When investors asked in July how the bet-on agreement was progressing and whether it had taken effect, Fuhua never responded directly, only saying: The bet-on agreement has been postponed to the end of this year. Only Hanya's president Cao Chunxia, on July 9, 2019, explicitly denied the rumor: Fuhua did not sell Quanshi. Currently, this legendary 300 million yuan bet-on agreement has not been reported anywhere except by the six people including Ming Jie who saw it. Shijie called Cao Chunxia, the Hanya president who showed the bet-on agreement, multiple times, but the calls went unanswered. Shijie has not yet been able to confirm the bet-on agreement from other channels, but the 300 million yuan loan does exist. The official WeChat account of Fuhua Asset Investment Committee published the minutes of its first meeting on August 5, 2019, showing that when answering shareholders' question 'Has Quanshi been sold? Please provide true information', Fuhua said that since September last year, it had faced liquidity difficulties and lacked support for Quanshi. To alleviate Quanshi's cash flow problems, before the Spring Festival, it cooperated with a Xiamen company to borrow 300 million yuan to restore normal operations. Chairman Wang Xin also mentioned: 'Considering the other party's lending risk, we set up a separate company, put the existing store assets into the company, and pledged part of the equity to this lending company, but the major shareholder is still Fuhua. Fuhua is still in talks for financing. The market values Quanshi at 1.5 to 1.8 billion yuan. After introducing a new major shareholder, that Xiamen company will retain 30% equity in Quanshi and become a shareholder.' As for the name of the Xiamen company that lent the money and the specific details of the newly established company used to hold the store assets, Wang Xin deliberately omitted them.
▵ A Quanshi convenience store in Beijing, locked and temporarily closed
Lawyer Du and a lawyer for one of the investors both believe that various signs indicate that this is highly likely a case of Quanshi convenience stores using Shanhai Lantu to play a game of escape to evade debts. If the bet-on agreement does exist, then through a mere 300 million yuan loan, Quanshi's most valuable assets, such as its signboards and stores, were transferred to Shanhai Lantu, while the debts were left with Quanshi. Fuhua has publicly stated that Quanshi's product financing was less than 1 billion yuan, but the specific amount was not disclosed. After investors sued in court and froze Quanshi's corporate account, some investors claimed to have checked through private connections that the corporate account was empty, with no funds. Lawyer Du analyzed that even if Quanshi was willing to be responsible to investors, if the corporate account had no money, after applying for bankruptcy, investors would still not get their money back. Shijie called the registered phone number of Fuhua on Tianyancha to verify the delay, the authenticity of the bet-on agreement, and the funds. A woman answered: Quanshi's repayment is delayed, Fuhua has no money, and even the PR department cannot be maintained; everyone has left. If we had money, we would have returned it to investors. Write whatever you want. We have more lawsuits than media reports. Do you think we are afraid of you? As for when investors' money will be repaid, she responded: 'We cannot promise. We can only say that as long as Fuhua is still alive and has a cent, we will continue to repay, no matter how many years it takes.' Regarding where Chairman Wang Xin is now, the status of capital introduction, and the bet-on agreement, she said she did not know. Shijie also tried to contact a brand director surnamed Gao at Fuhua, who also responded that he had resigned and did not want to disclose the reason. In fact, as early as around the Spring Festival of 2019, market news had been circulating that Quanshi was being dismantled and sold in batches to Lawson, Bianlifeng, and Shanhai Lantu. Recently, when investors went to Quanshi's office, they found that Quanshi employees' badges had 'Quanshi Convenience Store' on the lanyard but the badge itself was from Shanhai Lantu.
▵ Quanshi employee badge
On August 26, Shijie learned through Tianyancha that the Quanshi companies in Beijing, Tianjin, and Chengdu are still controlled by Fuhua. This may mean that the bet-on agreement has not yet failed. On the other hand, the official WeChat account subjects of Beijing Quanshi, Tianjin Quanshi, and Chengdu Quanshi have been changed to Beijing, Tianjin, and Chengdu Shanhai Lantu Commercial Management Companies. Shijie also found that Shanhai Lantu and Quanshi convenience stores have the same corporate phone number on Tianyancha, but the call cannot be connected. Whose Quanshi is it now, and who should be responsible for the debts? Lawyer Du from Sichuan Yongmao Law Firm believes that the key points to break through are: First, clarify whether Shanhai Lantu and Quanshi have reached a transaction; second, whether the transaction funds were paid to the corporate account or a private account, or in other words, which account has money. It would be best if Fuhua, as the guarantor, came forward to repay. Thus, investors' attention turned to the new character in the drama—Shanhai Lantu. Escape? An Ambiguous Love Triangle What is the relationship between Shanhai Lantu and Quanshi? Tianyancha shows that Shanhai Lantu was established on December 26, 2018, with a registered capital of 200 million yuan. At the same time, Shanhai Lantu almost overnight established 190 branches in Beijing to take over Quanshi's Beijing base stores. Although almost all of Quanshi convenience stores' official WeChat account registration subjects have been changed to Shanhai Lantu, and Quanshi's LOGO has been bought by Shanhai Lantu, Shijie searched the National Enterprise Credit Information Publicity System and found that Quanshi Sanliuwu has three shareholders, and Shanhai Lantu is not among them. In Lawyer Du's view, this is because there are two types of transactions: asset transactions and equity transactions. Shanhai Lantu may have only bought Quanshi's assets, not the equity, so it is not a shareholder. Asset transactions do not require responsibility for the original company's debts, unless Shanhai Lantu has an equity relationship with Quanshi or Fuhua. Currently, enterprise information platforms such as Tianyancha show that Shanhai Lantu has no direct relationship with the latter two. However, the Xiamen company mentioned by Fuhua's chairman Wang Xin at the investment committee meeting that lent 300 million yuan is likely related to Cai Xueyan, the actual beneficiary of Shanhai Lantu. Tianyancha shows that Cai Xueyan made his fortune in Fujian, and among his 54 companies, more than 20 are in Xiamen. On August 9, 2019, Ming Jie and other investors again went to Shanhai Lantu to ask for money. Shanhai Lantu employees said the company bought Quanshi but was not responsible for its debts. However, Hanya's president denied that Fuhua had sold Quanshi, saying it was in a financing state. Shijie contacted Wang Peng, one of the three core members of Quanshi's founding team and procurement manager. As soon as he heard that Shijie wanted to know about Quanshi's current situation, he immediately said: I have resigned, and hung up. 'But there is no resignation information for Wang Peng in the executive changes.' In addition, many of Quanshi's director-level managers had their phones either off or forwarded. A media person who has long been in contact with Fuhua revealed to Shijie: Since the Haixiang incident, Fuhua's structure has changed greatly, and many heavy-asset projects, such as resort real estate projects, have also been affected. Now, Quanshi Sanliuwu and Quanshi Alliance have been listed on the enterprise major dishonesty blacklist. Fuhua and Shanhai Lantu are still operating normally. Shijie learned through Quanshi customer service that Quanshi convenience stores are still accepting franchise applications. Shijie tried to contact Quanshi, Fuhua, Shanhai, and Hanya through official channels. As of press time, except for Fuhua's phone response, the other three companies' official emails, Weibo, and phones have not responded. Ming Jie believes that regardless of whether they can come up with money now, at least give us a solution, even if it is installment payments over three or five years. Ms. Dong said, 'Forget about interest; we would be willing to accept just the principal.' Fuhua has not failed to provide a solution: investors could convert their principal into equity in Fuhua's Diqiugang or into real estate in Lijiang. But currently, Diqiugang is nearly bankrupt, with all stores closed; the Lijiang real estate has also been preserved (similar to a court freeze), so this solution is obviously unrealistic. When will the money be recovered? No one knows. Source: Shijie (ID: ishijie2018) Tips will be paid 400-2000 yuan once adopted.