Subsidiary fraudulent loan 66.9 million dollars, Daxing ‘anling Forestry Group guarantee was judged joint repayment liability

2022-08-03 0 By

Heilongjiang Baishan Forest Co., LTD., a subsidiary of Daxing ‘anling Forestry Group Co., LTD., borrowed us $66.9 million from China Development Bank, and legal representatives and relatives of Daxing ‘anling Forestry Group and Baishan Forest Co., Ltd. guaranteed the loan.But the loan did not end up being used as intended.Heilongjiang Baishan Forest Industry Co., Ltd. was fined 5 million yuan for defrauding bank loans and ordered to repay China Development Bank 327812498.04 yuan.China Development Bank filed a civil lawsuit against daxing ‘anling Forestry Group, demanding that it assume the liability of guarantee to repay the loan.On December 21, 2021, the Supreme Court issued the final judgment of the case, rejecting the appeal of daxing ‘anling Forestry Group.The occurrence of this case is actually a frequent problem. In economic crime cases, should the person who puts forward contract guarantee for the perpetrator bear civil guarantee liability?Some people think that the guarantor and the parties of the contract fraud bear criminal and civil liability, because if there is no guarantor, the contract will not be deceived, it is because of the guarantee of the guarantor, just let the contract keeping party think that the contract performance is safer, without too much risk.The fraudster and the guarantor are jointly liable.On the contrary, because of the crime of contract fraud, the guarantor is exempted from the guarantee liability, and the guarantor is also a victim, cheated to participate in the guarantee activities.In practice, in the process of contract signing, when the con party and the non-breaching party agree on the contract guarantee conditions, the guarantor the con party looks for is generally the relatives, friends and associated companies of the con party.In this case, it is difficult for the guarantor to argue that the loss of the non-breaching party is caused by the criminal act of the cheating party.Judicial organs do not investigate the guarantor joint crime, to help the contract cheat party to carry out fraud activities has been extra-judicial mercy.The guarantor’s claim that the loss of the non-breaching party is caused by the criminal act of cheating the contracting party is untenable in law, and the court will reject its claim inevitably.On November 16, 2012, CDB, as the lender (operated by CDB Gansu Branch, hereinafter referred to as CDB Gansu Branch) and Baishanlin Company, as the borrower, signed the Foreign Exchange Loan Contract no. 6210201201100000074 in Jiagdaqi City, and agreed as follows:In order to construct and operate the Guyana forest development project of Baishan Forest Company, Baishan Forest Company applied for medium and long-term foreign exchange fixed assets loan from CDB, and CDB agreed to grant the loan.The loan commitment amount is $66.9 million.Purpose of loan: The loan under this contract shall be used for the construction of log cutting project, sawn timber processing, planing and cutting veneer processing workshop and corresponding supporting facilities in Guyana.Term of the loan: The term of the loan is 9 years, from November 29, 2012 to November 28, 2021, with a grace period of 2 years, from November 29, 2012 to November 28, 2014.The borrower may withdraw the promised amount of the loan in one or several installments, but the repayment date of any withdrawal shall not exceed the final repayment date.Daxing ‘anling Group provides joint and several liability guarantee for loans;The borrower, the principal shareholder of Baishanlin Company and his immediate relatives, shall provide personal unlimited joint and several liability guarantee for the loan of this project.Gansu Branch of China Open Bank is specifically responsible for the loan. After receiving the loan, Baishanlin Company did not build log harvesting project, sawing timber processing, planing veneer processing workshop and corresponding supporting facilities in Guyana as agreed in the contract, but used it for other business projects.Moreover, China Development Bank found that Bai Shanlin provided a lot of false financial data and contracts and materials during the loan process.In order to avoid serious losses, China Development Bank reported the loan project to the Heilongjiang Provincial Public Security Department for the crime of defrauding bank loans.Meanwhile, it filed a civil lawsuit in The Beijing High Court to rescind the loan contract.On November 17, 2016, China Development Bank sued the guarantors, including Daxing ‘anling Forestry Group Co., LTD and Heilongjiang Baishan Forest Co., LTD, in Beijing High Court for the loan contract dispute, demanding repayment of 66.9 million US dollars in loans and interest.On December 29, 2017, Beijing High Court made a civil judgment (2016) Jingminchu No. 82, terminating the loan contract between China Development Bank and Baishanlin Co., LTD. Baishanlin Co., Ltd. repaid the CDB loan of 61,995,800 US dollars and paid interest within 10 days from the effective date of the judgment.Daxing ‘anling Forestry Group and relevant guarantors shall bear joint liability.The Daxing ‘anling Group and the China Development Bank appealed the ruling to the Supreme Court.Daxing ‘anling Group appeals that the State Development Bank in the loan to charge $1.2 million of the initial fee, the State Development Bank at the same time filed a civil lawsuit and criminal charges, the State Development Bank and Bai Shan Lin company conspired to defraude daxing ‘anling Group guarantee.Enterprise registration information shows that Daxing ‘anling Forestry Group Co., Ltd. through layers of equity design, holding Heilongjiang Bai Shan Forest Industry Co., Ltd. accounted for 51% of the shares.Bai Shanlin company is the holding subsidiary of daxing ‘anling Group, in order to shake the pot, Daxing ‘anling Group is also spelled.Here is a question, daxing ‘anling Forestry Group holding Bai Shan Forest Industry Co., Ltd. how to exercise the responsibility of state-owned assets supervision and management?How was the $66.9 million loan used?Ten years ago this national development bank medium and long term loan amount is not small, difficult not subsidiary Bai Fir forest industry limited company’s production management activity completely by the civilian capital that shares completely control management?Daxing ‘anling group said in civil litigation by Bai Shan Forest industry Co., Ltd. and the national development bank Gansu branch of joint collusion to defraude its guarantee some unbelievable, so big loan contract, enterprise seal guarantee without careful examination?Or its controlling subsidiary loans.Harbin Daoli District Court (2018) Black 0102 Criminal verdict No. 901.The verdict found that: Bai Shan Forest company in the industrial and commercial registration, the use of 120 million false bank certificate of deposit, wuchang Forestry Bureau did not obtain the actual ownership of beiyinhe forest farm and smoke cylinder forest forest forest forest use certificate.Bai Shanlin company accounting books and national tax, local tax, industrial and commercial archives, state development bank, Longjiang bank balance sheet part inconsistent, inconsistent profit statement.The contract signed in the loan files is to obtain the bank loan, the two parties signed the contract without the intention of performance, the loan capital whereabouts and bai Shanlin company’s actual capital whereabouts are mostly inconsistent.BaiSha Lin companies in order to obtain loans, by providing false documents to obtain the trust of the financial institutions, the intention to convince Banks has the approval of relevant departments, it has established with legal application subject qualification, make enterprise accounting books, use isn’t ready to perform the false economic contract to get bank loans.The above behavior of Bai Shan Lin company is in line with the constitutive elements of the crime of defrauding loans, and bai Shan Lin Company shall be investigated for criminal responsibility for the crime of defrauding loans.The judgment identified Baishanlin Company as guilty of loan fraud, imposed a fine of RMB 5 million yuan, and ordered Baishanlin Company to return the unrecovered proceeds of RMB 327812498.04 yuan to CDB Gansu Branch after the judgment took effect.After the verdict, Bai Shan Lin company appealed on the grounds that the evidence of its crime was insufficient, CDB has filed a civil lawsuit and won the lawsuit, Bai Shan Lin company has the ability to repay, etc., the loan materials provided are true, and it does not constitute the crime of loan fraud.The Intermediate People’s Court of Harbin, Heilongjiang Province (2019) made a criminal ruling on No. 930 of The End of the He01 Criminal Trial, holding that:BaiSha Lin was founded and registered companies use false bank certificates of deposit through false contracts, providing false materials, fabricated accounting books and other means to defraud the bank loans, and real money to do not tally with the loan funds for most, especially serious loss to the bank, as a company is directly responsible for person in charge should bear criminal responsibility, therefore, make crime of defrauding loans.In order to obtain loans, Bai Shanlin company signed false contracts, provided false materials, fabricated accounting books and other illegal acts, which can prove that it has the subjective intention of obtaining loans.Whether CDB files a civil lawsuit or whether the loan is secured or not does not affect the establishment of the crime.In December 2020, a criminal complaint filed by Bai Shanlin was rejected by Harbin Intermediate People’s Court.At the end of December 2021, the Supreme Court rejected the appeal of Daxing ‘anling Group and upheld the judgment of Beijing High Court. Heilongjiang Baishan Forest Co., Ltd. should repay the loan principal of $61,995,800 and pay loan interest to China Development Bank Co., Ltd. within 10 days from the effective date of the judgment.Daxing ‘anling Forestry Group Company and other guarantors shall be jointly and severally liable for the above-mentioned debts of Heilongjiang Baishan Forest Industry Co., LTD.This is a typical cross – criminal case.In order to defraud the bank of loans, the borrower used fake contracts, financial information, loans to other businesses after the account.The borrower is the subsidiary company of the guarantor. Daxing ‘anling Group is a large state-owned forestry enterprise, but there are loopholes in the management of the subsidiary company. As a result, the shareholders in charge of the operation of the subsidiary company falsified bank loans and squandered the funds, unable to return them.Finally, Daxing ‘anling Group Co., Ltd. bears joint liability.The typical significance of this case is that when there are criminal problems in the performance of economic contracts, the court accepts civil cases and is not affected by the progress of criminal cases.In the economic crime case of contract fraud, the civil liability of guarantor will not be exempted because of the criminal act.