(Chinese Version)

Liu Shiyu, chairman of the CSRC (China Securities Regulatory Commission)

Editor’s Note:

In our previous report "Barbarian Vanke Eyeing On Dong Mingzhu’ Gree", we pointed out that on November 28, the day Zhuhai City SASAC appointed the new head of Gree Group, Gree also noticed that Foresea Life Insurance had raised its stake in Gree Electric Appliances to 4.13 per cent, becoming Gree's third largest shareholder.

While Baoneng's “battle” with Vanke was still not over, its subsidiary Foresea Life Insurance didn’t wait to eye on Gree, another industry-leading listed company. This has clearly drawn regulatory attention and even nausea. Liu Shiyu, chairman of the CSRC (China Securities Regulatory Commission), said in a fiery speech this morning that Foresea Life Insurance was like a barbarian who’s trying to steal from the entire industry with money coming from unknown sources. It is acting like a goblin, a mischief-maker. Foresea Life Insurance’s behavior is a challenge not only to the legal bottom line, but also to the bottom line of every decent human being. This can’t happen in China. After all, when you try to challenge the criminal law, you are bound to face prison sentence.

In a keynote speech at the First Session of the 2nd Members Congress of AMAC (Asset Management Association of China), Mr. Liu suddenly stopped, gave up his scripted speech and commented on Foresea Life Insurance’s behavior in a strict and fiery manner. The Chinese government’s attitudes towards the behavior of several insurance companies that have purchased stake in some industry-leading listed companies since 2016 can’t be more obvious.

[Clicj here to watch the video]

The following is the transcript of Mr. Liu’s comment, edited by TMTpost based on on-site video and audio record:

Liu Shiyu: I still hope or demand that certain insurance companies stop pretending to be wealthy and spend money excessively, stop making troubles like the goblins, stop doing harm or even murder life. Recently, a series of unusual phenomena occurred in the capital market, such as banner acquisition and leveraged buyouts. This is outright affront to listed companies with irrational governance structure. Worse still, they are using money coming from unknown sources. Therefore, they are acting like outsiders， barbarians and bandits who want to steal from the industry. This can’t happen here in China.

They are trying to challenge the bottom line of not only China’s national laws and regulations, but also every decent human being. They are the embodiment of immorality, not financial innovation. Some people are pretending to be wealthy and conducting so-called “leveraged buyouts” with public money. To conduct “leverage buyouts”, investors have to be able to take the risk. This is also why it is called a “leverage”. However, these insurance companies directly developed some products on the financial market and shrank the responsibility to a large number of individual investors.

How dare they say this is called “leveraged buyouts”? What’s the bottom line as a decent human being? These insurance companies are acting like strangers, barbarians and even bandits. While they are trying to challenge the current financial regulations, Civil and Commercial Law is the best response to stop them. After all, when you try to challenge the criminal law, you are bound to face prison sentence.

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[The article is published and edited with authorization from the author @Zhu Taowei, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.