Grapevine assisted a private equity investor map out a Chinese conglomerate’s diversified assets and capital situation.
Like many privately run Chinese companies, this conglomerate built up its empire by sucking up funds from both local government’s policies-driven subsidies and foreign investment from institutions with superficial knowledge about the business environment in China. The company told fraudulent stories about its market dominance, high-tech ambitions, and overseas IPO plans.
Our research concluded that more than 50% of the conglomerate’s assets were fabricated, and its business was not liquid and lucrative enough to repay its loans.
By conducting field visits in west china to verify the activities in the target’s various subsidiaries’ physical facilities and their land ownership status.
Interviewing with sources from the banking and private financial sectors, to gather information about bank guarantees, loans, debts, and pledges under shadow banking (which revealed a significant amount of duplicated mortgages and self-guaranteed bank loans between sister companies).
Gathering production and distribution information from the market and the target’s own sales team to evaluate the target’s liquidity situation