Tycoon Zhang Zhenxin, owner of troubled Chinese financial conglomerate UCF Group, dies aged 48 as company struggles with mountain of debt
- Zhang, 48, died in London last month due to multiple organ failure, alcohol dependence, his company said in WeChat post
Zhang Zhenxin, a financial tycoon who controlled a sprawling Chinese business empire spanning peer-to-peer lending to bitcoin mining, has died in London as his conglomerate slid into a debt crisis.
Zhang, 48, chairman of UCF Group controller of NCF Group, died in the Chelsea and Westminster Hospital in London on September 18, his company announced in a WeChat post on Saturday night. Zhang, a low-profile businessman who ran three Hong Kong-listed companies, died of multiple organ failure related to alcohol dependence, and acute pancreatitis, the post said.
“Given the company is going through a special period of time”, the core management team had adopted a “prudent” principle after learning the bad news, and did not disclose the news until the cause of his death have been officially verified, it said.
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The “special period of time” mentioned in the post refers to the huge financial difficulty the company has been struggling with since early this year.
A document describing the assets and debts under the UCF Group has been circulating since late July, saying the company was insolvent and bears total liability of around 75 billion yuan (US$10.5 billion), via multiple business units covering wealth management, peer-to-peer lending, and private equity investment.
On May 5, the company saw its major brokerage and investment arm, N-Securities, brought under “on-site inspection” by a branch of the China Securities Regulatory Commission. The watchdog said the decision was made after months of monitoring the company’s financial health.
In early July, media reported its peer-to-peer lending platform, named firstp2p.cn, had failed when clients tried to withdraw cash, and may have been caught in a liquidity crunch.
On July 8, the group’s Hong Kong-listed Chong Sing Holding FinTech Group applied for a trading suspension, citing misconduct by a subsidiary that operates a payment business. Chinese media outlet Caixin later reported the misconduct included embezzling funds.
The payment provider moved clients’ funds for other uses, taking advantage of a time lapse before the money was due to arrive in customers’ accounts, the sources said.
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Zhang built the UCF Group from scratch. He started with a small financial institution in 2003, offering guarantees and leasing services in the city of Dalian, in Northeast China’s Liaoning province.
Following the post declaring his death, the company posted a separate announcement, saying a crisis management team has been formed, headed by the group’s CEO Zhang Liqun, and would prioritise the interests of creditors.
The company grabbed headlines in Hong Kong in early 2017, when it led a HK$7.1 billion bid to take over local insurer Hong Kong Life.
The deal fell apart in October 2018, as the buyer failed to meet certain requirements before a deadline to settle the deal, causing it to forfeit a deposit worth HK$710 million, according to filings by the owners of Hong Kong Life, including Asia Financial.
Before that failed deal, in January 2017, UCF Group used one of its Hong Kong-listed units – then called Credit China Fintech, now Chong Sing – to acquire a 6.4 per cent stake in bitcoin-mining giant BitFury Group, for US$30 million.
