Overseas Chinese Holdings Group Limited (referred to as “Overseas Chinese Holdings”) is still embroiled in the gold product explosion case. The latest news reveals that three senior executives of the company have secretly fled overseas with a mysterious case involving “5 tons of gold” on their shoulders. Thousands of employees and investors have had tens of millions of Chinese yuan go down the drain, not only burdened with debts but also losing their future.
On November 9, Chuangxing Resources announced that the company’s actual controller Yu Zengyun was under investigation for suspected fundraising fraud.
On November 17, Fenghuang Financial media under Phoenix Net reported that 46-year-old Yu Zengyun, who had taken over Chuangxing Resources less than two years ago, was the main operator of Overseas Chinese Holdings involved in this case. The company’s main businesses include funds, private equity, asset management, with the most well-known financial product being “gold leasing”.
According to internal data lists provided by employees on the eve of the explosion on September 2, the total amount of unpaid funds amounted to over 7 billion yuan, with over 4 billion yuan unpaid in the gold leasing business, equivalent to approximately 5 tons of gold disappearing at a price of 700 yuan per gram.
Simultaneously, three senior executives, including Yu Zengyun, have already secretly fled overseas. As the fallout from the explosion continues to escalate over the past two months, the mess left behind by Overseas Chinese Holdings has fallen on the shoulders of employees and investors.
In an era of low bank interest rates, many people believed in the cooperation model claimed by Overseas Chinese Holdings with “China Gold” – promising an annualized return of 7-8%. Many even borrowed money and encouraged family and friends to invest. Numerous employees directly allocated their salaries into these investments, hoping for profits, only to find themselves not only working for free but also burdened with debts, sacrificing their future.
Long-time employee of Overseas Chinese Holdings, Liu Qing, recalls that on September 5, a unit purchased 50 million yuan worth of gold leasing orders through the “Overseas Travel the World” app, which were due, but not paid out. Colleagues handling this order initially thought the delay might be due to a large bank transfer, but by 8:30 in the evening, the payment still hadn’t been made, leading to chaos among the employees.
Given that many Overseas Chinese Holdings employees also invested in the company’s financial products, the sudden “abnormality” was met with anxiety.
Liu Qing mentioned that typically, companies and customers have a clear T+10 payment agreement, with a risk alert set at T+3. If payment hasn’t been made by then, employees can communicate with the financing party to prevent default risks. However, for the 50 million yuan gold product that had reached the T+3 deadline without payment, this was an unprecedented situation.
That evening, Yu Zhiwei, the operations director of Overseas Travel the World, had his phone bombarded with calls from employees. Liu Qing also called, remembering Yu Zhiwei’s bewildered reaction, as he was watching a movie at the cinema, wondering why everyone was calling and unaware of the situation.
The next morning, employees gathered at the company, surrounding the usually problem-solving executive of Overseas Chinese Fund, Wang Yuan. Liu Qing mentioned that Wang Yuan remained calm, stating he had contacted the company’s two top leaders – Yu Zengyun and Yang Yuxiao. While Yu Zengyun’s phone was unreachable, Yang Yuxiao could be contacted, assuring that he would meet with China Gold’s new chairman to discuss. Wang Yuan tried to reassure everyone to continue working as usual, awaiting further instructions after a meeting. However, even after the meeting, Wang Yuan provided no final outcome.
Many employees and clients were still in the dark, holding onto the hope that the crisis could be averted, which was soon shattered.
By 10 p.m. on September 7, the top two leaders of Overseas Chinese Holdings were completely unreachable, prompting employees to report the situation to the authorities.
On Monday, September 9, Chuangxing Resources announced that the actual controller Yu Zengyun was uncontactable, bringing Overseas Chinese Holdings’ dilemma to light. Soon after, financing guarantors backed by Maotai, along with China Gold’s products, stopped payouts, leaving all products stranded.
More media reports revealed that the missing Yu Zengyun and Yang Yuxiao had indeed absconded. With the company in disarray, even the once reachable Yu Zhiwei quickly disappeared as well.
Overseas Chinese Holdings found itself in a state of leadership vacuum, with many employees forced to remain at their posts, comforting the emotions of investors. Employee Liu Hong mentioned that in the two months since the explosion, he continued to go to work as usual, primarily handling client communications. Post-explosion, his role shifted to pacifying clients. In recent days, he specifically went out of town to explain the situation to clients one-on-one, even apologizing to some who were his relatives.
After the incident, the company only paid social security in September, without issuing salaries. In October, even the social security payments were not made. However, what crushed the employees was not the salary issue, but the realization that their family assets may never be recovered. Many employees not only invested their savings in the company’s financial products but also set up direct debits for their monthly salaries into Overseas Travel the World app’s financial accounts.
Liu Hong shared that initially investing only 200,000 yuan, he indeed received a solid 7% return on his investments. Following his confidence in the company’s assets, he continued to invest, pouring in millions, with one colleague investing 5 million. Internally, employees estimated that their funds made up one-fifth of the over 7 billion unpaid funds in this incident.
After losing millions to the company’s downfall, Liu Qing found himself directionless in middle age. A lifetime of savings wiped out, and properties mortgaged to buy gold products for investment faced potential auctioning, plunging him from the middle class to poverty overnight.
When dealing with clients seeking restitution, he accompanied them, spending most of his time at home lying down, battling insomnia at night, barely dozing on the couch during the day. From the Overseas Chinese series explosion to the present, he felt like he was “dreaming” and was unwilling to face reality.
Investors began large-scale rights protection efforts from October 21 onwards. Nearly every day saw investors gathering in front of Xizi International Center, Building A, 9 Jingxi Road, Shangcheng District, Hangzhou, demanding their rightfully earned money.
As the events unfolded, it became increasingly bizarre. Employees were shocked to discover that after investigating the company’s data, it was revealed to be a “scam”.
On September 23, China Gold issued an announcement stating they had never conducted any business with the Overseas Chinese Series. The announcement went on to harshly accuse the forged agreement seals, with clear differences and lacking anti-counterfeiting codes compared to the authentic seals of China Gold, Zhongxin Leasing, and China Gold’s subsidiary, Beijing Zhongjin Jewelry Company.
Authorities revealed that the bulk of the “financial” funds flowed into associated shell companies within the Overseas Chinese series. Huakou Fund’s gold projects were exposed by the media post-explosion, with problematic aspects such as the financing entity for the Dingxin Debt Rights project, Guohao Huijin, being placed on the suspect list by the Shenzhen Local Financial Supervision and Administration Bureau for potential shell financing lease enterprises.
The successive bad news made it challenging for employees to resolve the situation. They had believed in the strong background and capabilities of the company they joined.
Adding to the employees’ bewilderment was the revelation that the missing Overseas Chinese Fund CEO Yang Yuxiao’s wife was also an employee on the sales end. The couple had married just last year, and Liu Qing saw through a system screenshot that Yang Yuxiao’s wife had purchased over 16 million yuan of gold leasing products at its peak, with over 8 million yuan still unpaid at the time of the explosion.
Though the Overseas Chinese Series encompassed projects besides gold, such as Moutai, the investments in “China Gold” leasing products were the most substantial. According to internal data lists provided by employees on the eve of the explosion on September 2, the “China Gold” project had accumulated over 4 billion yuan through the Dingxin Debt Rights project offline financing and 2.6 billion yuan through the Overseas Travel the World online financing, totaling over 4 billion yuan. Calculated at 700 yuan per gram of gold, this equated to purchasing over 5 tons of gold.
Despite China Gold explicitly stating they never had any business cooperation with the Overseas Chinese series, it did not entirely dispel doubts for employees and investors. They continued to gather more materials and evidence to confirm whether funds had indeed flowed into China Gold’s subsidiary.
A widely circulated 1-minute video depicting someone logging into the Shenzhen Rural Commercial Bank online banking platform, checking transaction records from September to October 2023, showed multiple funds transferred to China Gold Group Golden Jewelry (Beijing) Co., Ltd. via self-service remittance. An expanded electronic receipt displayed a payment of 75 million yuan from Guohao Huijin (the financing entity for Overseas Chinese Series’ Dingxin Debt Rights) to China Gold Group Golden Jewelry (Beijing) Co., Ltd.
Apart from this video, another image dated September 4, 2023, from the Shenzhen Rural Commercial Bank, showcased a remittance of 50 million yuan from Guohao Huijin to China Gold Group Golden Jewelry (Beijing) Co., Ltd.
Several investors and employees were warned by the police not to trust the videos and bank statements circulating in their groups as they were deemed “false”. Regarding the authenticity of the video content, an employee of the Economic Investigation Section in Shangcheng District, Hangzhou, mentioned that the case was under investigation, and no further information could be disclosed.
Some employees discovered a few invoices in the finance department’s trash can. Huakou Fund Management Co., Ltd., as the buyer, purchased gold from China Gold Group Co., Ltd. According to an invoice dated February 26, 2024, Huakou Fund purchased approximately 20,000 grams of gold, equivalent to 40 catties, amounting to 8.48 million yuan. However, purchasing gold from China Gold did not imply any gold leasing business between the two entities, and the evidence chain was not entirely complete.
In vain, employees attempted to prove the close relationship between China Gold and Overseas Chinese Holdings. The Overseas Chinese Business Group Co., Ltd., an Overseas Chinese Series company, was once one of the top ten circulating shareholders of China Gold. In February 2021, when China Gold went public, as a strategic partner of China Gold Group, Yang Yuxiao, the CEO of Huakou Fund, was invited to attend the listing ceremony. News reports and photos from various publications in 2017 depicted China Gold Group and Huakou Fund Management Co., Ltd. signing a strategic cooperation agreement in Beijing. However, these instances seemed insufficient as direct evidence of financial cooperation between the two parties.
Until the Economic Investigation Section disclosed more information, the existence of gold financial products, where investors’ funds went after purchasing gold, remained a mystery.