"My situation is urgent. My dad is suffering from cancer and needs money to save his life, but all my wealth is with you." On the afternoon of January 16, at the Ding Yifeng investor reception desk in Block A, Binhe Times Square, Shenzhen, an investor asked to get back the principal and dividends that had expired in Ding Yifeng.
Ding Yifeng was originally founded by Sui Guangyi and Ma Xiaoqiu in January 2011. It later developed into a number of enterprise groups whose names contain "Ding Yifeng" or have equity and personnel connections with each other, but are actually controlled by Sui Guangyi and include multiple Hong Kong-listed companies. Since its establishment, Ding Yifeng has sold a large amount of "original equity" in the name of metaphysical investment through high-return and high-yield methods, attracting many investors to follow.
The above-mentioned investor said that without his knowledge, his wife took out a mortgage loan of 400,000 yuan to invest in various products of Ding Yifeng. One of the products, which lasted for one and a half years, has expired, but the investment in Ding Yifeng has yet to be recovered. Now, his family needs to repay more than 7,000 yuan in mortgage payments every month, and they can hardly afford his father's medical expenses.
Like him, there are many investors who are trapped by Ding Yifeng. On the afternoon of January 16, a reporter from China Business News came to Ding Yifeng’s investor reception desk in Tower A of Kingkey Riverside Times Square. Judging from the on-site situation, it is an established fact that Ding Yifeng's products are currently overdue on a large scale. At the Ding Yifeng Investor Reception Center on the 53rd floor of the building, there were overdue investors who were asked to "queue" for registration and were told that they could only get back their principal and dividends after the closing period ended in September this year. On-site staff said that the scale of deferred payment is approximately US$20 billion.
A few floors away, on the 56th floor, multiple department business managers were meeting with customers in the "tea room" to appease customers and vigorously promote Ding Yifeng's upcoming digital options. The above-mentioned business manager said that Ding Yifeng will issue equivalent digital options on international digital asset exchanges. Currently, all investors are closed for 8 months and cannot withdraw. This digital option product has a guaranteed asset value increase of 20 times after 10 years.
However, the reporter found that several business managers on site had many doubts about the reasons for freezing the products and the explanation of the digital option plan. They claim that Dingdao Global, which has obtained the Dubai digital asset license and will "list options" within three months, currently cannot find company registration information and license information through various channels.
Negative market sentiment is also quickly transmitted to stock prices. On January 16, 2024, the stock price of Ding Yifeng Holdings (00612.HK) collapsed, falling 32.84% that day and closing at HK$0.9 per share. In early trading on January 17, Ding Yifeng Holdings continued to decline, with a decline of 5.56%. However, it resumed its upward trend in the afternoon and closed up 14.44% that day. However, compared with the stage high of HK$27 in January 2019, its stock price is now only a fraction.
Redemption crisis breaks out
At 2 pm on January 16, a large number of overdue investors from Ding Yifeng came to the original Huayin International Changbaishan Cultural Tourism Experience Center on the 53rd floor of Tower A of Kingkey Times Plaza in Shenzhen, which was used as a temporary reception. "I came over from Xiamen after seeing the news last week, and today I made an appointment with the business manager to understand the situation." A Ding Yifeng investor told reporters that he will stay in Shenzhen this week, waiting for Ding Yifeng's latest solution.
According to a rough estimate by the reporter, between 2 pm and 5 pm alone, nearly a hundred investors visited the place to seek explanation from Ding Yifeng for overdue investments.
In the tea room where investors are received, a Ding Yifeng staff member claimed that Ding Yifeng currently faces a “gap” of approximately US$20 billion in product redemptions. However, whether this statement is true cannot yet be confirmed. Public information shows that Ding Yifeng’s total assets under management currently exceed HK$100 billion.
According to multiple investors, starting from August 2023, Ding Yifeng has shown signs of stopping the payment of principal and dividends. However, Ding Yifeng and other parties tried to "pass through" by encouraging continued investment and delaying the time limit.
At the investor reception on the 53rd floor of Tower A of Kingkey Binhe Times, the reporter saw a situation registration form that showed that the overdue amount of some investors’ products had been registered by investors in August last year and they had not received dividends.
"I haven't received any dividends for three consecutive months. The salesman said that the general environment is not good and the company has difficulties in turning around. In a word, he has no money and has to wait for the company's arrangements." Wang Ming, an investor in Ding Yifeng in Shenzhen, recalled to reporters that this was the first time that dividends were overdue in his investment in Ding Yifeng in the past six years.
Beginning in 2017, Wang Ming began to invest in Ding Yifeng and successively purchased five "products" for a total amount of 1 million yuan. Currently, two products have expired and have not been redeemed, involving an amount of approximately 300,000 yuan.
Similar to Wang Ming, Ye Lin (pseudonym) also began to pay attention to Ding Yifeng products after being introduced by colleagues in 2017. After observing for a long time, Ye Lin started to buy the first "product" worth 600,000 yuan in "3 times in 3 years" in 2020. Subsequently, Ye Lin invested approximately 4 million yuan in principal in more than ten times between 2020 and 2022, and the contract investment amount reached more than 8 million yuan.
In July last year, Ye Lin discovered that the initial investment of 600,000 yuan in the "three-year triple" product could not be paid out, and the principal and dividends had not been received, so he realized that something was wrong.
At that time, Ding Yifeng's redemption crisis had not yet developed, and most investors chose to handle it "moderately". After repeatedly urging the company to get no results, Ye Lin chose to invest the expired funds into Ding Yifeng products again. Another investor at the scene also said that he did not receive payment after the product expired in September last year. He could not withstand repeated persuasion by the salesman and chose to continue investing in new products.
On-site business staff at the teahouse explaining the plan. Photo by CBN reporter
Why Ding Yifeng is overdue? Business personnel have inconsistent opinions. "The problem facing the company now is money." A business staff told investors at the meeting that the cause was related to personnel changes in "Department 2" (note: the name of the organization divided into Ding Yifeng's internal structures). In addition, due to restrictions such as card restrictions half a year ago, funds could not be transferred in batches and had to be transferred out one by one manually.
However, another salesperson said that the capital freeze was related to the upcoming listing of digital options, because the equity cannot be changed before the listing, so a certain closing period is required. At the expiration of the closed period, if any investors are unwilling to go public, they can all exit at the expiration date.
Regarding the handling of overdue funds, a Ding Yifeng salesperson told China Business News at the scene that contracts expiring before September 10, 2024 will be postponed to that date by default, and the principal and dividends will be paid in one go. However, the person said that he could not make a promise, and it would be subject to the "queuing" situation at that time.
Risks behind high returns
According to multiple reports obtained by China Business News, Ding Yifeng's so-called products, although the income methods and terms are different, have annualized returns as high as 36% to 60% after conversion. The corresponding assets subscribed are the original option products of Ding Yifeng International Holdings Co., Ltd.
According to an "original equity agreement" provided by investors, Ding Yifeng International Holdings issued options. Each call option contract corresponds to approximately 28,000 shares, with a price of 7.2 yuan per share, and the value of each contract is 200,000 yuan. After 36 months of subscribing for the option contract, the issuer has the right to repurchase all or part of the contract. The repurchase value is the original face value of the option premium of the contract, plus an annual appreciation of 36%. In addition to the repurchase value-added amount, subscribers can also obtain priority dividend rights within 36 months after purchasing the contract. The dividend rights are calculated based on the standard of 2%/month.
According to the above investment contract, a contract worth 200,000 yuan can obtain a value-added amount of 216,000 yuan and a dividend of 144,000 yuan after three years. The total income in three years is 360,000 yuan, which is equivalent to an annualized income of up to 60%.
Another contract signed in 2022 shows that the option issuance entity is also Ding Yifeng International Holdings. The number of shares corresponding to each call option is 27,780 shares, and the contract value is 200,000 yuan. Dividends are calculated at 3%/month. This means that with a 200,000 yuan contract, you can get an income of 108,000 yuan in one and a half years, and the annualized income will reach 36%.
A senior lawyer in Beijing analyzed to reporters that the dividend distribution model agreed in the contract is a typical loan model, that is, the principal is repaid with interest at maturity and the interest is fixed (the contract provides a fixed value increase for the repayment of the principal). If the original stock subscription does not involve a criminal case, the civil legal relationship is called equity investment and is actually a loan.
As agreed,Many of the above-mentioned contracts have already reached breach of contract clauses. Multiple contracts issued by Ding Yifeng stipulate that default events include failure to perform dividends, dividend distribution method terms, and the occurrence of major adverse changes. Judging from the failure to pay dividends as scheduled, Ding Yifeng has breached its contract.
Screenshot of part of the contract (photo provided by investors)
According to the contract, when a default event occurs, the option holder can notify the issuer that the relevant call option contract will expire immediately and be repaid according to the repurchase price of the corresponding period. However, the litigation procedures in the above-mentioned contracts all stipulate that any lawsuits and legal proceedings arising from the option contract should be submitted to the Hong Kong courts. This also means that if investors want to sue, they need to go to Hong Kong courts, and the cost of litigation is relatively high.
The above-mentioned lawyer told reporters that the contract stipulates that the jurisdiction is in Hong Kong. If the company defaults on payment, it can consider litigation through Hong Kong courts. If the investor is willing to resolve the matter through a criminal case, he or she can choose the place where the contract was signed to call the police for help.
In response to the current progress of the matter, a staff member of the Economic Crime Investigation Team of the Futian Branch of the Shenzhen Municipal Public Security Bureau told China Business News that the case of Ding Yifeng has not yet been filed. The Financial Supervision Bureau and other departments are verifying it. If there is any illegal behavior, it will be handed over to the public security agency. Only then will the public security agency fully intervene. "This kind of failure to pay when due can only be regarded as a breach of contract and is not illegal, so the relevant departments are investigating whether Ding Yifeng has committed other illegal acts. If a case is filed, it will be announced on the official public account of the Public Security Bureau." The staff member said.
The reporter noticed that in the "Investor Information Registration" section of the Shenzhen Economic Investigation Official Account, "Shenzhen Ding Yifeng Fund Investment Management Co., Ltd." was added to the platform name selection list.
The above-mentioned police source said that investors can now submit a report to the Public Security Bureau. The content of the report needs to include the investment process, income, how much money has not been recovered, a copy of the investor’s ID card, a copy of the contract, and all bank statements related to Ding Yifeng.
Digital options are “painting the cake” again
Even though it had defaulted, Ding Yifeng’s sales staff were still selling its digital options at multiple investor meetings on January 16. As early as January 10, a "major positive document" for Ding Yifeng signed by "Sui Guangyi" had been circulated on the Internet. The document stated that Ding Yifeng International Asset Management Group (hereinafter referred to as "Ding Yifeng Group") applied to be listed on the International Digital Asset Exchange, anchored with Ding Yifeng Group as the underlying asset, and issued equivalent digital options on the international digital asset exchange based on asset valuation.
Ding Yifeng's sales staff and even Shencheng, whose "numbers are complete", all investors are closed for 8 months and cannot withdraw, and the guaranteed value of assets after 10 years can reach an astonishing 20 times.
A person who claimed to be a salesperson from Ding Yifeng explained the logic of digital options to China Business News. She said that Ding Yifeng and the Middle East-based Bin Zayed Company will invest US$37.5 billion each to establish a company called Dingdao Global in the Cayman Islands, which has a digital asset license issued by Dubai.Dingdao GlobalIt will be listed on an international digital asset exchange in Singapore or Canada and issue Dingyuan coins.
However, reporters on QichachaDingdao Global made a query and found no relevant information. The reporter went to the Dubai Virtual Asset Regulatory Authority with "dingdao"(VARA)No corresponding registration record was found in the published list of licensed virtual asset service providers.
Dubai Virtual Asset Regulatory Authority(VARA) query page
There are also many doubts about the investment model claimed by Ding Yifeng. On-site staff said that Ding Yifeng injected US$37.5 billion in assets into Dingdao Global as the underlying assets, and issued equivalent digital options on international digital asset exchanges based on asset valuations.
Where did Ding Yifeng’s US$37.5 billion in capital assets come from? The staff member said that according to third-party evaluations, Ding Yifeng's projects in Changbai Mountain and other places are valued at US$70 billion. The six listed companies held by Ding Yifeng are valued at US$50 billion. Sui Guangyi, chairman of Ding Yifeng Group, is valued at US$50 billion. The total of the three items is US$170 billion. Therefore, it is more than enough to take out assets valued at US$37.5 billion. However, the above-mentioned staff did not disclose the specific evaluation agency.
The staff member also said that after the digital options are listed, there will be a three-year lock-in period. After the lock-in period, investors can sell one thousandth of the assets they hold every day. Many industry experts consulted by the reporter all have doubts about the above-mentioned evaluation method and lock-in period.
Although there have been overdue payments, many investors still chose to believe in Ding Yifeng. In the corridor of Ding Yifeng's office, a woman who claimed to be an investor was very emotional, claiming that the company had just encountered a run, and called on everyone to work together to protect Ding Yifeng. "The products I bought have not been paid when due, and I have not received any dividends, but if everyone goes to report the case, the problem will not be solved. The purpose of my coming here today is to stand up for the company. There is a lot of negative information about the company on the Internet. Investors should tell everyone on social platforms when they joined the company and how much they earned, so that Ding Yifeng can occupy the 'high ground' of the Internet." She insisted, "The investors' money will definitely be returned, and 'Chairman Sui' will never transfer assets away."
Photo taken by CBN reporters at the office on the 56th floor of Tower A, Kingkey Riverside Times Square
The reporter noticed that the office hall of Ding Yifeng Nuoda on the 56th floor of Tower A of Kingkey Riverside Times Plaza is full of office cubicles. There are almost no computers at the workstations. There are only some scattered calligraphy calligraphy, Buddhist scriptures and other objects. The police call number of Shahe Police Station is posted on the wall of Ding Yifeng’s office lobby, but the investors on the scene seemed to be relatively calm, with people coming and going, and no one seemed to pay attention to this information.