(Bloomberg) -- Secretive Chinese tycoon Zhang Zhenxin, a top shareholder of a Hong Kong-listed company that was the target of short sellers, died last month in London.
Zhang, a non-executive director of Chong Sing Holdings FinTech Group Ltd., died Sept. 18, according to a Hong Kong Stock Exchange filing on Monday. The cause of death was multiple organ failure related to alcohol dependence and acute pancreatitis, according to the South China Morning Post.
Zhang also was chairman of UCF Group, which has invested in everything from a Hong Kong insurer to the artificial intelligence program that beat the top-ranked human at the complex board game Go. UCF is struggling with a debt emergency, the company said in a WeChat post Saturday, and has named a new chief executive officer and formed a crisis-management team to deal with creditors.
“Given the company is going through a special period of time,” management adopted a “prudent” principle after learning the bad news, and didn’t disclose his death until the cause was officially verified, the company said in a separate WeChat post.
Short sellers had taken aim at Zhang, whose deal-making spree in past years spanned shadow banking, insurance and cryptocurrency mining. Zhang had been using “sham transactions” to inflate Chong Sing’s value, Bonitas Research, the activist short seller founded by Matthew Wiechert, said in 2018.
Chong Sing said the Bonitas’s allegations were “groundless and contain various misrepresentations.”
Chong Sing’s main business is non-bank lending in China. Business people who relied on the nation’s sprawling shadow banking system to fund deals have come under increasing pressure in recent years as a government crackdown made financing tougher to secure.
In July, Chong Sing’s Chinese subsidiary was told to “take serious remedial actions for certain material non-compliance related to its business operation” by Chinese regulators, according to a statement to the Hong Kong exchange. The action would have a material adverse effect on its business and financial position, the company said, adding it would give details of the non-compliance at a later date.
Zhang, who was born in 1971, studied finance and economics at Dongbei University of Finance & Economics in China’s northeast and worked as a manager at Dalian Shenyin & Wanguo Securities, Chong Sing filings show. He went on to chair one of the first companies specializing in financial guarantees in the northeastern Chinese city of Dalian, and has accumulated licenses for cross-border payments, the filings show. UCF backed the proposed acquisition of Hong Kong Life Insurance Ltd. in March 2017.
Zhang began amassing a stake in Chong Sing, formerly known as Credit China Holdings Ltd., in 2013 and became a non-executive director in July 2015. Trading in the stock, which has tumbled 88% this year, was halted in July.
Chong Sing’s predecessor company acquired a slew of businesses, including P2P lender WeShare in 2016.
--With assistance from Jenn Zhao.
To contact the reporters on this story: Denise Wee in Hong Kong at firstname.lastname@example.org;Blake Schmidt in Hong Kong at email@example.com
To contact the editors responsible for this story: Andrew Monahan at firstname.lastname@example.org, Steven Crabill, Pierre Paulden
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.