Recently, public information from Tianyancha showed that Hongta Securities was subject to enforcement measures by Beijing Financial Court, involving an amount of 102 million yuan. News of Hongta Securities and its president Shen Chunhui being restricted from high consumption quickly triggered widespread media coverage and market discussion. In response to public concerns, Hongta Securities issued an official statement on September 8.
Recently, public information from Tianyancha showed that Hongta Securities was subject to enforcement measures by Beijing Financial Court, involving an amount of 102 million yuan. Due to this enforcement case, both Hongta Securities and its legal representative Shen Chunhui were restricted from high consumption.
According to the announcement, this controversy involving Hongta Securities stems from an arbitration case between one of Hongta Securities' asset management products and Shanghai Tongxiao Investment Development Center (Limited Partnership) (hereinafter referred to as "Tongxiao Investment"). The bond in question is the "Huachen bond" that attracted significant attention years ago due to its default.
The arbitration results showed that the aforementioned brokerage asset management product must repay principal plus interest, supplementary interest, and penalty interest totaling 96.22 million yuan. In early July this year, Tongxiao Investment had already applied to the court for compulsory enforcement. On August 1, Beijing Financial Court had already deducted 37.93 million yuan from the asset management product's custody account.
Hongta Securities emphasized that according to the arbitration results, the relevant payment obligations actually point to its subsidiary Hongxin No. 2 Single Asset Management Plan (hereinafter referred to as "Hongxin No. 2"), and are not borne by Hongta Securities itself.
**1. Hongta Securities Hit with Consumption Restrictions**
It is reported that because Hongta Securities failed to fulfill the payment obligations determined by the effective legal document within the period specified in the enforcement notice, on July 1, Beijing Financial Court adopted consumption restriction measures against Hongta Securities in accordance with relevant provisions including the "Civil Procedure Law of the People's Republic of China" and "Several Provisions of the Supreme People's Court on Restricting High Consumption and Related Consumption by Persons Subject to Enforcement." The company and its legal representative are prohibited from implementing high consumption and consumption behaviors that are not necessary for life and work, with the enforcement amount reaching 102 million yuan.
Public information shows that Hongta Securities' legal representative is company president Shen Chunhui. The aforementioned consumption restriction measures take effect from the date the consumption restriction order is issued and will be lifted after Hongta Securities fulfills the obligations determined by the effective legal document.
**2. Involving "Huachen Bond" Default, Hongta Securities Claims "No Payment Obligation"**
The starting point of Hongta Securities' "consumption restriction order" controversy can be traced back five years ago.
According to Hongta Securities' annual report, from August 14 to August 17, 2020, Hongxin No. 2 managed by Hongta Securities conducted bond pledged repo transactions with Tongxiao No. 1 managed by Tongxiao Investment, with total loan principal of 59.99 million yuan. Hongxin No. 2 used "19华晨04" bonds as collateral.
In the same month (August 2020), due to the downward adjustment of the conversion rate of Hongxin No. 2's pledged bonds, to avoid a shortage of pledged bonds, Hongta Securities added 29.5 million yuan in cash to the Hongxin No. 2 account at the request of the custodian. The following month (September 2020), Hongta Securities withdrew 10 million yuan from the Hongxin No. 2 account.
In late October 2020, BRILLIANCE CHI's 1 billion yuan private placement bond only paid interest when it matured, with the principal unable to be redeemed, leading to widespread questions about debt evasion. Subsequently, in November 2020, the issuer of "19华晨04" bonds, BRILLIANCE CHI Holdings Co., Ltd., entered bankruptcy reorganization proceedings.
During the execution phase of BRILLIANCE CHI's reorganization plan, its bankruptcy administrator has paid bond settlement funds of 36.47 million yuan to Hongxin No. 2 according to the reorganization plan, and is expected to continue paying 17.32 million yuan (specific amount subject to actual payment).
Shanghai Tongxiao Investment believed that Hongxin No. 2 failed to repay its borrowings from Tongxiao No. 1, constituting a breach of contract, and that Hongta Securities withdrew 10 million yuan from the Hongxin No. 2 account without liquidation, infringing upon Tongxiao Investment's legitimate rights and interests. Based on this, Shanghai Tongxiao Investment applied for arbitration to the Shanghai International Economic and Trade Arbitration Commission in October 2024.
Hongta Securities' recently released semi-annual report shows that the case was heard on February 11, 2025, with the arbitration result announced on April 14: Hongxin No. 2 must repay principal plus interest, supplementary interest, and penalty interest totaling 96.22 million yuan to Tongxiao No. 1; Tongxiao No. 1 has the right to preferential compensation from the amount that Hongxin No. 2 has already received from BRILLIANCE CHI for "19华晨04" bonds, and will continue to enjoy preferential compensation rights for future compensation amounts for "19华晨04" bonds; arbitration fees of 737,000 yuan should be fully borne by Hongxin No. 2; given that Shanghai Tongxiao Investment has prepaid the full arbitration fees for this case, Hongxin No. 2 should pay the aforementioned fees to Shanghai Tongxiao Investment.
Among Tongxiao Investment's three core requests, the arbitration only supported the first two. However, the third request for Hongta Securities to bear supplementary compensation liability of 10 million yuan plus interest was rejected.
Hongta Securities stated that the arbitration result has no significant adverse impact on the company. Hongta Securities also emphasized in its announcement that the payer confirmed by the arbitration award is Hongxin No. 2, not Hongta Securities, and that Hongta Securities as an independent legal entity has no payment obligations to Tongxiao No. 1.
**3. Why Was the "Consumption Restriction Order" Issued and Then Revoked?**
Since Hongta Securities claims the company has no payment obligations, why did it previously receive a consumption restriction order for "failing to fulfill the payment obligations determined by the effective legal document within the period specified in the enforcement notice"?
However, Hongta Securities stated that the consumption restriction order against the company and company legal representative Mr. Shen Chunhui has been revoked, and the company's operations and Mr. Shen Chunhui's work and travel are all normal.
Given this, why did Hongta Securities previously receive a "consumption restriction order," and why was it revoked in such a short time? Do you think this consumption restriction order controversy will have an impact on Hongta Securities?