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China’s Largest Corn Trader Quietly Filed for Bankruptcy

According to Beijing News, the Intermediate People’s Court of Changchun City of Jilin Province recently issued a civil ruling that Xinghua Grain Depot, a subsidiary of Jilin Grain Group Co., Ltd., is insolvent and unable to pay off its debts. The court ruling showed that Xinghua’s current debt ratio exceeded 100 percent. It has 27 employees under labor contracts. The company has so far defaulted on wages, social security, and medical insurance payments.

As a matter of fact, before the Xinghua Grain Depot’s bankruptcy filing, its parent company Jilin Grain Group Co., Ltd. already quietly went bankrupt. The civil ruling that the Beijing News reporter obtained showed that the applicant, Wang Jing, applied to the Changchun Intermediate People’s Court for bankruptcy liquidation of the Jilin Grain Group on the grounds that it was insolvent and was not able to pay off its debts. On May 15, 2018, Jilin Grain Group submitted a written opinion to the court, expressing its consent to bankruptcy liquidation. The court ruled to accept Wang’s bankruptcy application for Jilin Grain Group.

Since August, a number of Jilin Grain Group’s subsidiaries including the above-mentioned Xinghua Grain Depot have filed for bankruptcy reorganization. For example, the Changchun Intermediate People’s Court issued another civil ruling on August 2, indicating that Jiashi Rice Industry Co., Ltd. has been unable to pay off its debts. It ruled to accept Jiashi Rice’s bankruptcy application.

Founded in 1996, Jilin Grain Group Co., Ltd. grows, processes, and distributes grains. With registered capital of 664 million yuan (US$97 million), it has 20 subsidiaries, a total of 3,000 employees and an annual sales income of more than 10 billion yuan (US$1.5 billion). A nationally recognized state-owned enterprise, Jilin Grain Group was China’s largest corn trader.

In recent years, Jilin Grain Group has been involved in corruption investigations. In February 2018, former party secretary and chairman of Jilin Grain Group, Meng Xiangjiuwas, was under investigation for “serious violations of discipline” and dismissed from the party. Xinhua News Agency reported a long list of charges against Meng, including illegal possession of property, misappropriation of public funds for illegal activities, accepting bribery when appointing officials, contracting projects and conducting business operations.

Source: Beijing News, August 3, 2018