The Haiyin Group fundraising fraud case has opened, exposing a fake gold exchange and a real estate cash-flow dead end, with the $5 billion holding parent pierced through.
When the Shanghai First Intermediate People's Court formally struck the gavel in the trial of the "Haiyin Group" on suspicion of fund-raising fraud, bringing Han Hongwei, Han Xiao, father and son, along with core entities such as Wuniu Holdings and Haiyin Holdings, to the defendant's dock, the massive empire that once bore the halo of "China's second-largest third-party wealth management institution" finally met its moment of ultimate legal reckoning. The second trial, held just two days later against Haiyin Wealth Management Co., Ltd. and Heisheng Holdings, sent an even clearer signal to the market: the judiciary's penetration into this massive capital black hole is by no means confined to the surface-level violations of individual sales units, but cuts directly to the top-level holding hub and the fund dispatching chain, defining the case at the group level.
During the past decade-plus of wild growth in China's third-party wealth management industry, the Haiyin Group and the Zhongzhi Group were known as the giant sponges soaking up capital from high-net-worth individuals. Yet unlike pure secondary-market securities allocation, Haiyin Wealth's lifeblood was, from its very inception, bound deathly tight to land development, old-city redevelopment, and supply-chain financing in the domestic real estate boom cycle. When the real estate industry entered a period of deep adjustment and private developers defaulted one after another, the underlying assets that had relied on project sales receipts and high-interest rollovers were crippled on a massive scale.
To sustain the myth of on-time repayment and keep up appearances, the wealth management side was forced to tear off the cloak of compliance and walk the dead end of borrowing new to repay old through packaged so-called fixed-financing products with fictitious underlying assets.
Equity Penetration: A 5 Billion Holding Parent and 85% Absolute Subordination
Tracing the underlying business registration architecture of the entities involved in the two public trials reveals, through the paper trail, a highly centralized capital map of nested parent-subsidiary relationships within the Haiyin Group. Tianyancha business registration data shows that Haiyin Holding Group Co., Ltd. has registered capital of as much as 5 billion yuan, with Han Hongwei personally holding 99% and Han Yu holding 1%; the other core platform, Wuniu Holdings Co., Ltd., also has registered capital of 1.2 billion yuan and is helmed by his son, Han Xiao.
A more substantively meaningful penetration is reflected in Haiyin Wealth Management Co., Ltd., scheduled for trial on September 3: Tianyancha equity penetration shows that Haiyin Holding Group directly holds 85% of Haiyin Wealth's equity, with Wang Dian holding 15%.
This absolute equity subordination of 85% and 15% directly shatters the excuse routinely used by previously collapsed institutions—that "subordinate sales companies set up capital pools in unauthorized violation, and the holding group was unaware."
Group-Level Closed Loop: From Asset Packaging to Pseudo-Financial Asset Exchange Channels
From Wuniu Holdings handling real estate investment and front-end asset packaging, to Haiyin Holdings providing group credit endorsement and the top-level equity structure, to Haiyin Wealth setting up branches in more than a hundred cities nationwide and relying on thousands of wealth managers to pitch so-called high-yield fixed financing to tens of thousands of investors at high frequency—this was a group-level closed loop with an extremely strict division of labor. After regulators gradually tightened compliant channels for private funds, the Haiyin Group massively detoured through local pseudo-financial asset exchanges and overseas-listed entities, packaging air projects with no substantive collateral and no real industrial cash flow into fixed-income wealth products. The flow of the funds raised was ultimately coordinated at a high level into the parent capital pool controlled by the Han family, used to plug massive loss holes and fund extravagant capital expenditures.
Escalation of Charges: The Dividing Line Between Fund-Raising Fraud and Illegal Absorption of Public Deposits
And when this model was formally brought to court by the judicial authorities under the charge of "fund-raising fraud," it meant the nature of the case had completely departed from the civil-criminal boundary of an ordinary "private lending blowup" or "illegal absorption of public deposits."
In judicial practice, the dividing line between the crime of illegally absorbing public deposits and the crime of fund-raising fraud lies at its core in whether there was "the purpose of illegal possession." Finding fund-raising fraud usually means the judicial authorities have already secured a hard evidence chain showing that the capital chain, while knowing repayment was impossible, still fabricated fund uses, that the underlying assets were completely falsified, or that funds were arbitrarily misappropriated and transferred. At the level of criminal law discretion, unit fund-raising fraud and the maximum accountability of directly responsible natural persons not only mean the principal offenders face extremely heavy criminal consequences, but also provide the strongest enforcement basis for subsequent cross-regional, cross-entity asset penetration and recovery.
Warning Bell: The Endgame of the Implicit-Guarantee Illusion and Shadow Banking
From the boundless glory of ringing the bell at a U.S. listing to father and son now standing trial together in the same courtroom, the collapse of the Haiyin Group sounds the coldest possible warning bell for all high-net-worth clients enamored of the "implicit-guarantee illusion" and "shadow banking." When a wealth management institution's underlying assets no longer depend on real industrial growth, but rely on forged vouchers and the illusory ledgers of borrowing new to repay old to keep spinning idle, then no amount of registered capital and no matter how ingenious the parent-subsidiary isolation structure can ultimately, under the spotlight of the rule of law, stop the entire capital edifice piled up from lies from completely falling apart.