The cadenza of the Delong myth is the so-called "industrial integration", whose "golden" period was from 1998 to 2000.

Although the investment is quite complex and is nicknamed by the industry as "equal to the State Planning Commission", Delong's most important industrial integration actions are carried out based on the "old three stocks", forming a group of food and beverage processing, auto parts, electric Tools and Cement are large enterprise groups with more than 100 subsidiaries (branches) under the four pillars.

This is Delong's golden signature as an "industrial giant", and it is also the reason why Delong Industrial Group borrowed 17 billion yuan from major banks.

However, the so-called industrial integration of Delong cannot withstand scrutiny. As early as early 2003, the risk management department of a well-known financial institution conducted an investigation on the four major listed companies of the "Delong Group" (Xinjiang Tunhe, Tianshan Shares, Xiang Torch, and Alloy Investment) and the three major holding groups (Delong Group, Xinjiang Delong and Tunhe Group) issued a series of financial risk analysis reports, pointing out that "Delong" industrial companies generally have major financial problems and there are also many performance doubts.

Delong’s so-called industrial integration is to realize the rapid expansion of asset scale and sales scale through continuous mergers and acquisitions. However, the company’s debt repayment ability and profitability are extremely weak, and it does not reflect the value of “integration” at all. . There is no way for the outside world to judge whether the cost of the merger and acquisition is appropriate, and Delong's huge appetite also makes people doubt that it is impossible to digest it one by one. It can be seen from professional financial analysis that the entire Delong industrial system is fragile and relies entirely on bank funds, and its operating risks are extremely high.

First, the asset-liability ratio remains high and dependence on borrowing is too high. At the end of 2003, compared with their net assets, the borrowing dependence of the four companies significantly exceeded 100, among which Xinjiang Tunhe's borrowing dependence was as high as 184. This shows that "Delong" companies are extremely dependent on external borrowings, and they are mainly short-term bank borrowings to support structural assets, to the point where they can't stop.

Second, the bank borrowings of "Delong" enterprises have three main purposes: borrowing new ones to repay old ones (including short-term loans and due interest), making new expansions (investments), and covering new ones. Receivables and inventories, and very few loans are actually used for production and operation.

Third, the so-called short-term loan and long-term investment is a serious shortage of self-owned funds, a serious phenomenon of using short-term bank borrowings to support long-term investment, and a serious imbalance in the asset structure. First of all, there is a suspicion of bank loan fraud, because the loan investment does not match the purpose. Secondly, even in Western banks, bridge loans provided by banks for mergers and acquisitions have strict conditions, in which the buyer must have a certain amount of own funds and corresponding mortgage guarantees. Delong's mergers and acquisitions rely entirely on loans.

Fourth, although the expansion of asset scale driven by mergers and acquisitions has brought about a significant increase in sales revenue, profitability has hardly improved. The solvency of the main business is significantly different from its huge borrowings. Judging from the data changes in the past three years, the total net assets of the four listed companies increased by 54.3%, while long-term and short-term borrowings increased by 75.2%; the total sales revenue was 3.4 times that at the end of 2001, but the net profit only increased by 121%. Except for Xiang Torch, the borrowing scale of the other three listed companies reaches or exceeds the sales revenue scale; that is to say, if some listed companies use all the current sales revenue to repay debts, it will not be enough.

Correspondingly, the increase in profits before depreciation and amortization that can be used to repay debts of these listed companies is not obvious, and the ability to obtain profits from the main business and repay debts through their own operating accumulation is very poor. Compared with the income brought by the main business operation and the borrowing pressure, there is still a huge gap. Except for Tianshan Cement, which has a debt repayment period of 6.4 years, the average debt repayment period of the other three companies is about 20 years. The Delong Group as a whole has reached 24 years, which is far away. Above the generally acceptable level (five years).

Fifth, there is huge pressure to repay short-term borrowings. The working capital demand of the entire Delong Group remains at around 3.7 billion yuan, but working capital is often stretched (often negative); the gap in cash payment capacity is huge and continues to expand (from -3.738 billion yuan at the end of 2001 to 9, 2003) -5.146 billion yuan at the end of the month).

Sixth, there are doubts about the authenticity of the performance. Taking the performance of Xinjiang Tunhe in 2003 as an example, net profit increased significantly. Net profit in the first three quarters was 59 million yuan and in the fourth quarter was 60 million yuan. However, when analyzing the cash flow statement, it was found that the depreciation of fixed assets in the first three quarters was 62 million yuan, but was reduced to 13 million yuan in the annual report, which means a loss of 49 million yuan, thus "contributing" 49 million yuan to net profit. Did the sales of 1.6 billion yuan in the fourth quarter only generate a net profit of 11 million yuan? Therefore, the authenticity of its performance sales should be doubted.

In addition, several listed companies and groups still have a very important problem, that is, they provide large amounts of external funds. Delong Group's other receivables are as high as 2 billion yuan, showing the group's complex related-party transaction capital relationships, indicating that in addition to Tunhe Group and the four major listed companies, there are also huge hidden external investments and capital operations.

It now seems clear that the actual direction of these capital undercurrents is the secondary market, or so-called "overseas acquisitions", etc.

Between April and May 2004, in order to cover up the huge amounts of funds embezzled from many listed companies, and at the same time prevent clients from entrusted financial management companies from various places from using judicial procedures to freeze their assets, Delong passed various investment projects through A series of asset transfer contracts were transferred back to each listed company. But even so, the black hole of debt owed by various listed companies due to Delong is still shocking (see "External Debt Statement of Delong Listed Companies"). "So many things in ancient and modern times are all made up of jokes." From the wonderful stories of Yang Bin (Eurasian Agriculture) and Zhang Hai (Jianlibao) to Gu Chujun (Greencool) and Tang Wanxin (Delong), "Caijing" magazine has reported in detail. We have to admit that Chinese business managers in this era have extraordinary imagination and overly conflicting dramatic personalities.

What we want to explore more is why China - whether it is a technology "returnee" or an overseas "chief executive", the growth background and acting style of the above-mentioned people are typical "Chinese-style" - new enterprises Is system construction so helpless, difficult, and ridiculous? Does such a large-scale and series of crimes indicate a kind of fate? Is enterprise system innovation an "impossible task" in the context of China's ever-expanding economic aggregate? Does the continuous failure of enterprises as the main body of business activities imply the lack of legal environment? Or is it the dislocation and failure of government functions?

While lamenting the story, it is more valuable to analyze the logic behind it. Since the situations of Gu Chujun and Tang Wanxin are more representative, we will refer to this model as "Gu-Tang" below. Before analyzing the logic behind the "Gu-Tang" story, let's first take a look at the core elements of its story.

The equity relationship of "Gu-Tang" is extremely complicated, so complicated that no one except case investigators and relevant lawyers can understand it clearly; their identities are ever-changing, either as technology geeks or as financial tycoons. , or the chief executive of a foreign country, or a football boss; the industries involved span a wide range, from ketchup to spark plugs, from refrigerants to buses, from growing greenhouses to building villas, and so on. But these are only the surface of the story, at best tidbits for people to chat and entertain, not its core elements.

The core elements of the "Gu-Tang" story can at least be summarized as follows: As mentioned above, "Gu-Tang"'s investment spans a wide range of industrial fields and spatial layout. Although they may claim to “create new value for traditional Chinese industries”, “improve the industrial structure and enhance industrial competitiveness through industrial integration to achieve sustainable development of enterprises”, or claim to “use technology as a link to integrate Chinese home appliances” Industry", "Being the world's number one in white goods appliances", etc. These are just gimmicks in stories and should not be taken seriously.

The industrial structure of "Gu-Tang" is relatively difficult to integrate in terms of industrial chain, resource sharing, coordinated management, etc. In fact, they have not taken any truly effective measures. This kind of sporadic and scattered potato-style investment has almost no main line; Tang Wanxin's "quasi-mixed finance" is not it, nor is Gu Chujun's white home appliances.

However, running through these scattered potatoes, there is still a red thread that "Gu-Tang" can send and receive freely. This is the theme of their story; if this can also be called their main business, Then the main business of "Gu-Tang" is to actually control more assets. The first is to focus on quantity rather than quality. Otherwise, it would be impossible to understand that some ST or even suspended loss-making listed companies (such as Xiangyang Bearing, Yangzhou Bus, etc.) have such investment value and quality in the hands of Gu Chujun, who has no industrial background, and quantity is not enough. We can’t ask for quality, we don’t ask for quality for the sake of quantity;

The second is not to ask for completeness but for control. Whether the legal procedures are complete and completed is not important to "Gu-Tang", what is important is actual control, Jianlibao When Zhang Hai's incident happened, the purchase price was still unpaid, and theoretically the transaction was not completed. However, Zhang Hai had controlled Jianlibao for more than two years, and Delong's so-called "vertical management" also had this meaning. A similar situation almost happened in Tang Wanxin's case with Jutian Securities, and in Gu Chujun's case with Xiangyang Bearing. The actual control of the acquired entity was the purpose of "Gu-Tang". It is no longer important whether the law is complete or complete; it may even be that the law is incomplete and the status is incomplete intentionally for the sake of better control. If you carefully analyze the story text of "Gu-Tang", you will find an interesting phenomenon: when they unfold these ups and downs, the supporting characters who play opposite them are mostly the owners and regulators of state-owned enterprises. Although on the surface, each state-owned enterprise has its owner (various group companies, state-owned companies, etc.), in fact it is its real owner and regulator-local governments at all levels perform on the stage to match the story. Expand.

Tang Wanxin’s “troika” is like this. Its many financial institutions (Nanchang Commercial Bank, Kunming Commercial Bank, Zhuzhou Commercial Bank, Nanjing SDIC, Chongqing Securities, Islamic Trust... ) Most of them are like this; Gu Chujun’s Guangdong Kelon, Hefei Meiling, Yangzhou Yaxing, and Xiangyang Bearing are all like this; in Zhang Hai’s story, although there are grievances between shareholders, the government where Jianlibao is located also plays a significant role; Yang Bin So is the story.

Among them, Nanchang City, Jiangxi Province failed to Tang Wanxin in the equity transfer of Nanchang Commercial Bank and then failed to Gu Chujun in the land transfer of Nanchang Economic and Technological Development Zone in a short period of time. The most typical ones can be sighed. ! It is the uncompromising performances of these "supporting characters" (approval? expectation? acquiescence? helplessness? hatred?). "Gu-Tang" as the protagonist makes the story wonderful. They are "supporting characters" who should not be forgotten. Focusing on the above-mentioned theme of expanding assets, "Gu-Tang" chooses assets with strong financing potential as platforms and props when carrying out acquisitions. This mainly includes:

First, financial institutions. Financial institutions themselves are financing and should be the first choice of "Gu-Tang". In view of the restrictions of various policies and regulations, it was not smooth for "Gu-Tang" to enter financial institutions, but he still made gains. Among them, Delong entered commercial banks, securities companies, trust companies, insurance companies, and financial leasing companies in various ways. typical. The so-called mixed business operations and financial innovation are all cover, and the key is financing. As people concluded afterwards, Delong's financial innovation "has no technical content at all" and "is just a huge 'rat club'."

Second, listed companies. Listed companies themselves have the function of direct financing. Even if they cannot participate in capital market financing due to various reasons, it is more convenient for them to obtain loans and guarantees recognized by commercial banks in China, and equity mortgage of listed companies is also a convenient financing measure. These factors have made various listed companies the most frequently used props of "Gu-Tang". Among them, Delong's "Troika" and Gu Chujun's "Four King Kong" are the most well-known.

Third, land for various uses (especially government leased land). The natural scarcity of land has resulted in an inevitable appreciation trend. The huge difference between the original acquisition value and the assessed value of land (especially for government leased land) is reflected in the books, and the land has strong mortgage properties in commercial banks. "Gu-Tang" people also incorporate land into their performance props.

The basis of Yang Bin's entire story is land. Gu Chujun worked hard to obtain more than 2,000 acres of land in Kelong Industrial Park, Nanchang Economic and Technological Development Zone. Through multiple complex transactions between Hefei Meiling and Meiling Group, he obtained Hefei Economic and Technological Development The area’s total land area of ??more than 1.66 million square meters is a clear example. The story of "Gu-Tang" has a distinct theme, carefully selected supporting characters, and props that have been tried and tested. The existence of these realities, according to the so-called "whatever exists is reasonable", must have its own logic behind the story.

"Gu-Tang" is not an easy person. They have good intuition, never-ending impulse, super courage and mental endurance when expanding their corporate territory. What kind of logic do their carefully crafted stories follow?

First, in China, private assets whose starting point is too low and whose accumulation time is too short coexist with large or even inefficient state-owned assets. Since the "Socialist Transformation Movement" in the early 1950s, private assets have been impossible to exist in theory and reality. In fact, it has cut off the modern sense of China since the "Westernization Movement" in the late Qing Dynasty for more than a hundred years. The history of industrial and commercial accumulation of private capital.

Therefore, when the reform and opening up began in the late 1970s, China's private assets actually started from a state of almost zero; its accumulation time was too short, and theoretically Legality and practical feasibility have been oscillating and have not yet been fully resolved. What they are facing is a dinosaur-like huge stock of state-owned assets. Except for some monopolized industries and a few exceptions, most of these stocks are inefficient.

The huge difference in asset magnitude and the law of the business jungle of survival of the fittest make it impossible for private assets to grow in a state of natural accumulation and gradual development. They will definitely expand by leaps and bounds, emphasizing that "the big one is king", quantity and scale will become the first consideration of their owners, and they will definitely target state-owned assets for mergers and acquisitions - this is inevitable or even the only choice. It is also a rational choice under given constraints.

Understanding this, we can understand the realistic basis for determining the theme of the "Gu-Tang" story and selecting supporting characters.

Second, China is a country that is relatively lacking in the spirit of the rule of law, legal texts and legal procedures. When engaging in corporate activities in such an environment, complete contracts, law-abiding behavior, and perfect corporate governance may not necessarily bring high returns, or even become a burden for high returns. "Gu-Tang" is not a philanthropist, nor an investment imbecile; they expand the scale regardless of the cost, because they know that no matter the quality is good or bad, as long as the scale is large, there is room for transfer; no matter whether the law is complete or not, As long as you can actually control it, you can delay and wait for changes, exchange time for space or space for time, and reap huge operating profits.

These characteristics are often deeply reflected in the process of "Gu-Tang" obtaining the first pot of gold, and form the path dependence of their thinking, and point to the second pot of gold and the third pot of gold. Excavating, and mostly working. But the so-called "success or failure" is a non-convergent process. As the number of reciprocating links increases and the number of resources involved increases, the internal mechanism and external environment are slightly disturbed, and collapse is conceivable.

Tang Wanxin once complained that some state-owned enterprises were doing the same thing as Delong, but because they had government backgrounds, they did not face the same difficulties as him. It is true that credit and psychological factors in corporate expansion are very important. "True" and "false" depend to a large extent on understanding and there is no objective criterion. But he should not forget that, first of all, state-owned enterprise operators do not have the kind of thinking that depends on the path of expansion; secondly, under the existing institutional arrangements, state-owned enterprise operators have neither the motivation nor the possibility to pursue Operating profit. There is a qualitative difference here.

Third, China is a big government society, and governments at all levels are quite powerful. While providing public products, they are strongly involved in all aspects of society, and the economic field is no exception. In addition to intervening in economic activities as the maker and executor of policies and regulations, the government often also directly controls major enterprises and resources.

For local governments, local listed companies, local financial institutions, and land resources in central cities have become the main operating resources they directly control.

The "offside" of the government function itself provides the inevitability for "Gu-Tang" to choose them as their counterparties. However, it is thought-provoking that the inevitability has repeatedly become a reality and the government has always been the loser. It's not just a lack of experience that can be explained.

The first thing that the public thinks of is corruption. It cannot be said that such problems do not exist, but judging from the public information, "power-for-money trading" is not mainstream - if it became mainstream, it would be relatively simple to analyze. In the past 20 years or so, China's economy has been in a period of extensive and rapid growth, and local governments at all levels have naturally been in the excitement of a competition for total economic growth; especially the so-called "story of how many high-ranking officials have been born in a certain place due to sustained rapid economic growth" Version" has greatly stimulated the nerves of local governments at all levels, causing them to fall into the inexplicable "GDP worship" and "Top 500 investment worship" from which they cannot extricate themselves.

"Gu-Tang" is not a general person. They are well aware of the principle of "those who steal the hook will be punished, and those who steal the country will be martyred"; they have weaved a series of rhetoric, starting from the aspects of GDP, taxation, employment, etc. to impress local governments at all levels. Under such circumstances, it is difficult for local governments at all levels suffering from the "GDP Worshiping Investment Syndrome" not to become a supporting role in the "Gu-Tang" story; and this "GDP Worshiping Investment Syndrome" itself is unhealthy, It is conceivable that you will become a loser in the end.

In addition, China’s government structure is top-down. The assessment, incentives, promotions, etc. of local governments at all levels do not or mainly do not come from the will of the people in their jurisdictions, but from higher levels. department. In view of this structure, "Gu-Tang" can easily spread their stories at all levels of government by persuading higher-level departments through public relations. In short, the "offside" functions of local governments at all levels and the lack of experience, the "GDP worship investment syndrome" of local governments at all levels formed under the background of China's extensive macroeconomic growth model, and the characteristics of the government assessment mechanism, put Local governments at all levels have stepped onto the stage of the story, playing supporting roles in the "Gu-Tang" story, and ending up as losers. This cannot be controlled by individual will.

Fourth, the brilliance of the "Gu-Tang" stories lies in the huge repercussions they caused and the sample meaning they contained. By analyzing this, we can understand its implications from another aspect. Logical context. The "Gu-Tang" story has aroused basically one-sided criticism at the public level. This is not surprising. What is worth exploring is the subtle attitude of scholars at the level of mixed criticism and praise.

We do not agree with the pan-moral view that among scholars, the supporters and opponents of "Gu-Tang" are all interested in a narrow sense; if so, the interests of these scholars Isn’t this argument equivalent to the legal submissions made by the prosecution and defense lawyers in the “Gu-Tang” case? This is obviously not the whole truth.

To a certain extent, those who approve of "Gu-Tang" use wine to relieve their worries. The "sorrow" they want to eliminate is the rigidity that absolutely existed in mainland China and still has a great influence today. planned economy and inefficient state-owned assets system. They are keenly aware of its shortcomings. As long as they can achieve the goal of reforming this system, the means are no longer important. Unfortunately, the glass of "Gu-Tang" wine is not a good wine and cannot relieve their "sorrow". There is no evidence to prove that the state-owned enterprises acquired by "Gu-Tang" have significantly improved their efficiency, social resource allocation, and technology. Of course, there has been no significant decline in the above aspects.

As for the opponents of "Gu-Tang", the various shortcomings in the operation of the private system have been revealed to a considerable extent from the story of "Gu-Tang" (most of which did exist in "Gu-Tang" ), hoping for a "wise king" and a "good state-owned assets system" arrangement. However, China's current economic system, social and legal system may not be able to fulfill their wishes.

Both the supporters and opponents of "Gu-Tang" have to face this reality: in a given real environment, a "good private enterprise system" cannot be universally developed quickly; similarly , a "good state-owned enterprise system" cannot be universally established quickly.

The story of "Gu-Tang" and the state before reform and opening up illustrate this respectively. Although the opinions of proponents and opponents are so opposite, the embarrassment and even tragedy they face may be the same - dragon seeds are sown and fleas are harvested.

Some people may question that "good private enterprise systems" can also be developed, such as Lenovo Group, TCL Group, etc. Indeed, the effect of the story of "Liu-Li" (of which Liu Chuanzhi and Li Dongsheng are the most representative) is stronger than that of most state-owned enterprises, and of course better than that of "Gu-Tang".

However, we would like to point out that this success only has individual significance; in a sample sense, "Gu-Tang" is more typical than "Liu-Li". There are many prerequisites for the success of the "Liu-Li" story, such as choosing an industry that is small but has entered a critical state and will subsequently explode in growth. Otherwise, incremental property rights reform will have no effect; the social environment and the In an era when the legal environment was relatively loose, starting from scratch and starting a business to get rich were the spirit praised by the society. There were no restrictions on MBO or similar MBO in laws and regulations; specific state-owned asset owners were open-minded and relaxed, while managers engaged in restructuring were rational and restrained. , both parties have a positive interaction and achieve a win-win situation. *Delong’s past: The shattering of a financial myth that started with 400 yuan

People say that Delong’s fortune and decline have unusual symbolic significance.

From a color expansion company that invested 400 yuan to develop film, to a huge industrial and financial "empire" involved in more than half of China, Tang Wanxin, the "Soul of Delong", started from Urumqi on the western border, and now faces the challenges in the river city of Wuhan During the trial, 20 years passed in a blink of an eye. How many sigh-inducing and thought-provoking stories are there? In the border town of Urumqi in 1986, Tang Wanxin, who had just graduated from university, and his five friends invested 400 yuan to establish their first entity, the "Friends" Color Expansion Department, and developed photos for 1 yuan each. But it is said that this small business allowed them to earn about 600,000 yuan in Urumqi that year.

Between 1988 and 1990, young Tang Wanxins with novel ideas and a lot of cash began to set up factories to produce bicycle locks and satellite receivers, distribute feed additives, and contracted projects in Taxkorgan County on the Pamir Plateau. A hotel and they even had an aviation club. However, these attempts basically ended in failure. Not only did they lose all their previous profits, they also owed more than 1.8 million yuan to banks and customers. It was not until 1991 that Tang Wanxin's Kehai Development Company in Urumqi became Xinjiang's largest computer component supplier for a time, and it basically recovered its previous losses.

The keen Tang Wanxin smelled the bull market atmosphere in the capital market in 1992. At that time, when people still needed to be mobilized to buy stocks, they purchased a large number of original stocks and internal employee stocks. In Xi'an, they underwrote 10 million of the 30 million new shares of the Huanghe Machinery Factory and 8 million shares of the Fifth National Cotton Factory. Then, they sell it at 1x or 2x the price in Xinjiang and other places.

In the era of queuing up to receive subscription certificates to buy stocks, 1,500 migrant workers were even hired at one time in Urumqi to queue up to receive subscription certificates. These people wait in line for two days and receive 50 yuan in labor fees every day. These subscription certificates were quickly exchanged for original shares, and then turned into a lot of real money for Tang Wanxin and others.

In 1992, Xinjiang Delong Industrial Company and Xinjiang Delong Real Estate Company were registered and established, and Delong entered the entertainment, catering and real estate investment fields. In August 1994, Beijing JJ Discotheque broke ground. When the Hongyuan Building located in the center of Urumqi was completed in 1995, it was claimed to be the most high-end office building in Xinjiang at that time.

At the same time, Delong entered the field of agricultural industrialization.

In 1994, Xinjiang Delong Agriculture and Animal Husbandry Co., Ltd., with a registered capital of 100 million yuan, was established. On the one hand, Delong began their industrial journey. On the other hand, Delong gained recognition as agricultural industrialization benefited millions of farmers. received recognition and support from local government.

However, Delong’s real rapid expansion came after entering financial institutions. It first entered the "Xinjiang Jinxin Leasing Co., Ltd." (the predecessor of Xinjiang Financial Leasing) established in 1993. In 1994, at the Wuhan Treasury Bond OTC Exchange, Tang Wanxin used a newly leased trading seat to finance a total of 300 million yuan from Hainan Huayin International Trust and Investment Company and China Rural Development Trust and Investment Company through the treasury bond repurchase business.

It is on this 300 million yuan that Tang Wanxin’s concepts of industrial integration and strategic investment can take root and sprout. Delong International Strategic Investment Company's answer is: determine goals through industry research and formulate industry strategies; select target companies and track them for a long time, and wait for opportunistic acquisitions; form an industrial operating platform through mergers and acquisitions to achieve industry leadership; and finally carry out industrial integration. Leverage synergy, expand business scale and scope, and strengthen core competitiveness to gain a dominant position.

Between 1997 and 2002, Delong carried out some "large-scale" industrial integration campaigns. Among them, the integration of Xinjiang Tunhe Co., Ltd. and Tianshan Cement Co., Ltd. (Tianshan Co., Ltd.) can be called a classic.

In October 1996, Xinjiang Delong International Industrial Corporation acquired the Xinjiang Tunhe equity of Changji Tunhe Building Materials Industry and Trade Corporation and Xinjiang Bayi Iron and Steel Plant, becoming the fourth largest company in Xinjiang Tunhe. The largest shareholder controlled Tunhe Group until 1998. At this time, Tunhe, Xinjiang, had an annual cement output of 400,000 tons, second only to Tianshan Co., Ltd. in Xinjiang, which had an annual cement output of 1 million tons.

On the other hand, Tianshan Co., Ltd., which was born out of the old state-owned Xinjiang Cement Factory, had an internationally advanced cement production line at the time, but its debt burden was very heavy. In November 1998, when Tianshan Cement Co., Ltd. was established, Delong used its subsidiary Xinjiang Financial Leasing Co., Ltd. as one of its sponsors and held 1.16 shares of it.

Same place in Urumqi--Changji The competition between the two regional powers has led to a significant increase in costs for both parties. Public information shows that after 1998, due to competition with Xinjiang Tunhe, Tianshan Co., Ltd. has to pay approximately 30 million yuan more in costs every year.

Delong used his controlling influence in the two companies to finally complete the integration of Xinjiang's cement industry: Xinjiang Tunhe transferred all cement resources to Tianshan Shares and obtained a controlling stake in Tianshan Shares. Tunhe, Xinjiang itself, focused on its own "red industry" ketchup project, and has since become one of the world's major ketchup manufacturers. Tianshan Co., Ltd. has since established its position as the third largest cement company in the country and the largest cement company in the northwest.

It is in accordance with this integration idea that after Delong took control of Xinjiang Tunhe, Shenyang Alloy, and Hunan Torch in 1996 and 1997, it recklessly drew its industrial integration map.

Delong’s vision is to become a leader in the strategic investment industry, become one of the world’s top 500 companies within 3 to 5 years, establish a world-class “corporate elite club”, and bring together the largest number of leadership-level management talents. Become a bridge connecting China and the mainstream of the world economy.

However, the other side of Delong's industrial integration and making the company bigger and stronger is the manipulation of stock prices. The indictment of the Wuhan Municipal People's Procuratorate on December 6, 2005 stated that since March 1997, Xinjiang Delong and Delong International have successively used Jinxin Trust, Deheng Securities, and China Enterprise Oriental as their operating platforms, using 24,705 shareholders Accounts, concentrated capital advantages and shareholding advantages, adopted continuous buying and selling, self-buying and self-selling techniques, and long-term large-scale buying and selling of "old three stocks", seriously disrupting the order of the securities market. From a consumer's perspective, the efficiency will be greatly improved if transaction activities such as bank deposits and loans, bill finance, credit cards, bills, insurance, securities, futures, and mutual funds can be realized simultaneously in one financial institution. Meeting this practical need is the reason for the existence of financial holding companies. A financial holding company is exactly the dream pursued by Tang Wanxin and Delong.

However, under the current restrictions of policies and regulations, Delong's path to a financial holding company is destined to be obscure and tortuous. Delong created a platform similar to a financial holding company through Shanghai Youlian Economic Strategy Research Center Co., Ltd. established in 2001 (renamed Shanghai Youlian Strategic Management Research Center Co., Ltd., or Shanghai Youlian) in 2002.

The Deheng Securities case, "the first criminal case involving Delong", was finally pronounced on December 27, 2005, the Delong Jinxin Trust case was tried in Urumqi in September 2005, and the Delong Jinxin Trust case was tried in Urumqi in November 2005. The Islamic trust case that was pronounced in Yinchuan revealed that the manipulators behind the scenes were Shanghai Youlian.

Through Shanghai Youlian, Delong has realized the relationship with Financial New Trust, Xinjiang Financial Leasing, New Century Financial Leasing, Deheng Securities, Dajiang Trust, Islamic Trust, Hengxin Securities, Zhongfu Securities, Kunming Commercial Bank, Nanchang The control of various financial institutions such as Commercial Bank and Zhuzhou Commercial Bank.

Under the control of Shanghai Youlian, Delong's financial products once launched comprehensive financial services for customers, including "entrusted financial management", "strategic mergers and acquisitions", "strategic exit", "MBO" and "backdoor listing" "Leveraged Buyout" and a series of new financial products.

However, these financial products gradually shrank under the pressure of Delong's tight capital chain. Finally, various financial institutions began crazy entrusted financial management activities, promising annual returns of 12 or even higher. At this point, Delong's comprehensive financial services existed in name only, and his dream of a financial holding company finally came to nothing.

On December 27, 2005, the Chongqing High Court’s final judgment in the Deheng case gave an explanation for Delong’s “financial holding”:

Deheng Securities Co., Ltd. In the name of asset management business, it adopted the method of promising to return the principal of the entrusted assets and pay fixed income after the maturity, and in disguise absorbed more than 20.8 billion yuan of public deposits for the unified allocation and use of Shanghai Youlian Company. The amount was extremely huge, and caused serious damage after the incident. There are still more than 6.8 billion yuan of funds that cannot be redeemed, which has serious consequences, seriously disrupting the national financial management order, and its behavior has constituted the crime of illegally absorbing public deposits. On April 14, 2004, Delong's stocks Xianghuo Torch, Alloy Investment and Tunhe shares fell to the limit for the first time, and the Delong crisis broke out.

In fact, industry insiders believe that as early as the "China Science and Technology Incident" in December 2000 and Lang Xianping's "bombarding of Delong" in April 2001, Delong had already sown the seeds of crisis. It was only later that Delong managed to maintain it by entrusting financial management with the method of "tearing down the east wall to fill the gap in the west". By the spring of 2004, the Delong Group was ambushed from all sides and the building was about to collapse.

After April 14, 2004, Delong's "Troika" fell by the limit for many consecutive days, and its market value evaporated by more than 10 billion yuan. Shortly thereafter, Delong sold its shares in Tianyi Industrial and Lop Nur Potash, and Hunan Torch even took Delong to court.

From early April to late May, Delong almost pledged all the "Troika" he held.

On May 30, Delong International held a board of directors and crisis management meeting, recognizing for the first time "the period of the deepest crisis and the most serious difficulties for the entire Delong system."

On June 8, the Delong crisis further escalated. The Shanghai No. 1 Intermediate People’s Court heard two cases related to Delong at the same time. Creditors from all over the country used legal channels to collect debts from Delong. Most of Long's assets in various places have been frozen.

On August 26, Xinjiang Delong, Delong International, Tunhe Group and Huarong Company signed an "Asset Custody Agreement". The three companies irrevocably and fully entrusted all their assets to Huarong Company exercises the management and disposal rights of all assets; on September 4, Huarong accepted the entrustment of the China Securities Regulatory Commission to conduct custody operations for Deheng Securities, Hengxin Securities, and Zhongfu Securities.

At this point, Delong could no longer control his own destiny and quietly ended his career.