Editor's note: This is indeed a piece of big news in assets management industry in present P. R. China. But it's hard to say that the police from Anhui province did it illegally, after all, non-lawyers were not allowed to do debt collection, is a very old rule in China.
On the early morning of May 25th, 2023, Hunan Yongxiong Asset Management Group Co., Ltd. (hereinafter referred to as "Yongxiong Group"), which is renowned in the domestic collection industry, announced its closure from that day onwards.
Yongxiong Group said in a "Notice to All Employees" released on its official WeChat official account that the decision to suspend business was related to cross provincial law enforcement by the Anhui police. According to the 'Notice to All Employees', On April 3, April 10, and May 19, 2023, the Anhui police conducted cross provincial law enforcement and successively intervened in the investigation of the Jishou Branch of the Group Weicheng Company, the Huaihua Branch, the Xiangtan Branch, and the Shaoyang Branch. A total of 179 employees were forcibly taken to Anhui, and criminal coercive measures such as residential surveillance, bail pending trial, criminal detention, and arrest were taken. Currently, a total of 3 employees have been arrested on suspicion of causing trouble
Yongxiong Group, known as the "largest collection company in China", once planned to list on the New York Stock Exchange but later withdrew its listing application.
According to people close to Yongxiong Group, since last year, Yongxiong Group has been adjusting its business and corporate structure, on the one hand to cope with the pressure of the economic environment, and on the other hand, hoping for more standardized operation. Prior to the announcement of the closure, people close to Yongxiong Group told First Financial that Yongxiong Group had already closed some of its branch businesses, some of which were suspended under the guise of decoration, while others were directly closed, causing personnel to be disbanded on site and causing conflicts.
At the year-end commendation meeting before the year, Yongxiong Group also revealed its transformation plan for the next 10 years: from 2023 to 2027, strive to cultivate and support at least 50 outstanding collection enterprises with core competitiveness, and build Yongxiong Group into a management company that specializes in cultivating and supporting collection enterprises and helping them develop; From 2028 to 2032, local AMCs will be established through listing financing to acquire and dispose of personal non-performing loans in bulk. Meanwhile, in 2023, Yongxiong Group will strive to achieve annual task goals such as stable personnel size of over 10000, annual revenue of over 1 billion yuan, annual tax payment of over 100 million yuan, and addition of over 10 new customer units.
Comparing business information, it can be found that Yongxiong Group has cancelled a large number of institutions, and currently the number of Yongxiong Group's subsidiaries and related institutions is only about one-third of the peak period. Yongxiong Group said in the "Notice to All Employees" that "the number of employees dropped from 17000 before the COVID-19 epidemic to 7000 after the end of the epidemic, and then dropped sharply to 2000 after this incident".
It is currently unclear what illegal activities Yongxiong Group is suspected of. Under the news of the investigation and closure of Yongxiong Group, many practitioners see this as a signal to rectify the collection industry. According to incomplete statistics, there are currently over 3000 collection agencies in China, which is due to the increase in non-performing loan ratios of banks.