As soon as the story was broadcast, the popular hot word "trust fund" was deeply popular online and offline. Due to the need of listing approval, many domestic companies listed in Hong Kong set up family trusts to control their own companies, such as Agile, nine dragons paper and SOHO China.
It is particularly worth mentioning that because Wu Yajun, the chairman of Longhu Real Estate, used trust tools well in the divorce case, which avoided the disastrous consequences caused by the divorce of the company's major shareholders' families, Longhu Real Estate was once called a family trust sample by people in the industry.
Family trust fund is a wealth inheritance tool.
The Trust Law of People's Republic of China (PRC) promulgated on 200 1 gives a complete definition of the concept of trust: trust refers to the act that the trustor entrusts his property rights to the trustee based on his trust in the trustee, and the trustee manages or disposes in his own name for the benefit of the beneficiary or for a specific purpose according to the wishes of the trustor.
It is worth noting that some people have misunderstandings about trusts and funds. It is understood that trust and fund are two independent but overlapping concepts.
Trust is a legal arrangement, under which you (the client) hand over the ownership of the property to others (the trustee), and others manage the property and hand over the operating income to the person (the beneficiary) you designate. As for how the trustee operates, it depends on the law on which the trust is based and the agreement in the legal documents of the trust.
A fund is an investment arrangement, that is to say, a group of people (either a minority or an unspecified public) put money together in a certain form, invest in a certain way and enjoy the benefits. There are many options for "a certain form" here, which may be a company, a partnership or a trust.
From the above analysis, it can be seen that the intersection of trust and fund is that investors (trustors of trust) concentrate their funds on trust companies (trustees of trust) for investment operation through trust legal arrangements, and the investment income is distributed back to investors (beneficiaries of trust) in proportion. This trust arrangement for investment is usually called "unit trust".
In addition to the above intersection, trust (traditionally, abroad) can also serve other purposes besides investment, such as family property inheritance, providing living funds for future generations, and tax avoidance in some cases. In addition to the trust model, the common forms of funds in the world include corporate form (that is, all the money is invested in the investment company, and the investors are shareholders of the investment company, and enjoy the return on investment according to the grade and share of the shares held) and partnership form (private equity funds and hedge funds are used more).
It is understood that domestic trust funds generally refer to trust investment funds, also known as investment trusts, that is, a form of trust that collects the funds of unspecified investors and entrusts experts to invest on their behalf, thus reducing investment risks and sharing investment income. Fund investment targets include securities and industries. It is actually a wealth management product and an investment tool.
The establishment of a trust fund in Hong Kong refers to a family trust fund, which is a tool for estate planning and wealth inheritance, rather than a wealth management product and investment tool.
Trust funds can not only protect children's future, but also inherit wealth. Inheritance of wealth is not only the continuous management of property, but also the continuous benefit to family members. Trust, insurance and will all belong to the category of wealth inheritance. The will only clarifies the ownership of assets, and the trust can decide when, where and how to distribute assets to a single beneficiary or several beneficiaries, especially high-net-worth people. Trust is a very important legal tool for wealth inheritance.
Trust can be divided into public trust and private trust, mainly because of the different beneficiaries. The beneficiaries of charitable trusts are unspecified people, while private trusts are designed for private interests. Most family trusts are private trusts. Insiders pointed out that the trust fund in in the name of people refers to private trust.
Family trust funds can lock in corporate equity.
Family trust (also known as family trust) refers to a wealth management model in which the client transfers family property to the trustee, and the trustee manages it for the benefit of family members or for a specific purpose.
Family trusts separate the owners and beneficiaries of assets. Once purchased, the money will exist independently and will not belong to anyone's private property. No matter whether it is divorce or inheritance, the money will not be divided, and the beneficiary of the assets can only be set according to the wishes of the client.
(Family Trust Framework Diagram)
This model is particularly common among foreign rich people, such as Rothschild Family Fund, Rockefeller Family Fund, Bill Gates Family Fund, Anita Mui Heritage Fund, Li Ka-shing Family Fund and family trust funds of domestic rich people such as Niu Gensheng, Wu Yajun, Zhang Yin and Pan Shiyi.
At present, family trusts are mainly established in overseas offshore trusts in China, and most of them are established in Cayman Islands and British Virgin Islands.
It is understood that trust fund shareholding is very common among large listed companies in Hong Kong. Hong Kong tycoons or celebrities, such as Cheung Kong Industries (Li Ka-shing family), Henderson Land (), Sun Hung Kai Properties (Guo family), Hang Lung Group (), Emperor International (), Dah Sing Bank Group (Wang Shouye), etc., were established many years ago, holding shares in listed companies through their respective family trust funds.
It is worth mentioning that the establishment of family trust can protect the control of family business. For example, the Bank of East Asia (00023) was diluted because the major shareholder Lee distributed the controlling stake to many family members, thus being attacked by other consortia. In contrast, agile successfully solved the dilemma of equity decentralization by using family trust.
Agile Group, founded in 1997, originally belonged to the Chen brothers, with Chen Zhuolin and Chen Zhuoxian as the chairman and vice chairman of the group; Chen Xiongzhuo, Chen Zhuoxi and Chen Zhuonan are executive directors and senior vice presidents; His wife is the co-chairman. In order to achieve the goal of listing in Hong Kong from June, 5438 to February, 2005, the Chen family reorganized the group business and established Agile Property (03383) in the Cayman Islands in July, 2005, and concentrated the scattered family equity into an investment company named Top Coast, with it as the trustee of the Chen family trust and the five Chen brothers and Lu as the beneficiaries.
According to the data disclosed by the Hong Kong Stock Exchange, at present, Coastal Land still owns 62.63% of Agile. The Chen family realized the concentration of equity through family trust.
Longhu real estate is a sample of family trust.
As early as 20 12, the divorce case of Wu Yajun, the chairman of Longhu Real Estate, pushed the concept of family trust to the focus of public opinion. Longhu real estate trust case is very famous. It is not because the ownership structure is complicated and the trust agreement is well written, but because two people who should use the trust made good use of the trust tools when they should use the trust.
According to the initial prospectus of Longhu Real Estate, as early as June 5438+065438+ 10, 2007, Wu Yajun and her ex-husband Cai Kui registered Longhu Real Estate in Cayman Islands, and their shares were held by two BVI companies, CharmTalent and PreciousFull.
On June 5438+ 10, 2008, Wu Yajun and Cai Kui registered another company named LongforInvestment in the British Virgin Islands, and the equity of this company was held by Longhu Real Estate 100%.
In June 2008, Longhu Investment acquired all the issued share capital of Jiaxun Development, which is the assets that the couple intend to use for listing. After Longhu Investment acquired Jiaxun Development, it transferred its equity to CharmTalent and PreciousFull at the price of HK$ 654.38+92 million and HK$ 654.38+28 million respectively.
Almost at the same time, Wu Yajun and Cai Kui transferred their shares again. Wu Yajun transferred all the shares of Jiaxun Development held by CharmTalent to Yinhai Assets Co., Ltd. (referred to as Yinhai), a wholly-owned subsidiary of HSBC International Trust Co., Ltd. registered in the British Virgin Islands, at zero cost, and settled with Wu Family Trust; Cai Kui also transferred all the shares of Jiaxun Development held by PreciousFull to Silverland Asset Limited, a wholly-owned subsidiary of HSBC International Trust Limited registered in the British Virgin Islands, and settled in the form of Chua's family trust.
At this point, Yinhai and Yindi became the direct controlling shareholders of Longhu Real Estate, and Wu Yajun and he no longer directly controlled the equity of Longhu Real Estate, but controlled it through Wu Family Trust and Chua Family Trust.
The beneficiaries of the Wu family trust are several Wu family members and a trust named Fitall, which benefits the employees and management of Longhu Real Estate and aims at equity incentive. As Wu Yajun's husband at that time, Cai Kui was also considered to have an interest in this share.
The beneficiaries of the Chua family trust are several Chua family members and Fitall. The rights and interests of this share also belong to Cai Kui's ex-wife Wu Yajun.
It is understood that the trust is an independent property, and it is not regarded as husband and wife at the time of divorce and does not need to be separated. In other words, it was not the divorce that made Cai Kui gain more than HK$ 20 billion in wealth, but this part became the independent property of Cai Kui since the establishment of the trust.
Under this framework, no matter what changes have taken place in the identity and nature of Mr. and Mrs. Cai Wu, the company's equity will eventually need to be merged into one through the family trust fund, which ensures the consistency of the actions of the two major shareholders in a certain sense.
Compared with the disastrous consequences caused by the divorce of major shareholders' families in some listed companies, the mode of property division in Wu Yajun and Cai Kui, which is related to the stability of enterprises and the inheritance of family fortune, was called mature and forward-looking at that time. According to industry insiders, the major shareholder of Longhu Real Estate has fully played the role of property security isolation of the trust.
According to HKEx, HSBC International Trust Co., Ltd. currently holds 70.55% equity of Longhu Real Estate; Yinhai holds 43.97%; Yindi holds 26.46% of the shares.