Recently, Blackstone Capital Limited, a private equity fund from mainland China, released a statement criticizing investors, accusing them of sabotaging the company by reporting it and causing them to lose their fund management registration.
On May 31st, Blackstone Capital issued a notice on its WeChat public account titled “Announcement on the Cancellation of our Fund Manager Registration Qualification by the China Fund Industry Association”.
According to the announcement, on April 25th, the company received a notice from the China Securities Investment Fund Association canceling their fund manager registration qualification, which means the private equity firm will not be able to engage in new business, but existing registered funds will not be affected.
The notice thanked investors who had been reporting and complaining about the company since 2019, attributing their efforts to the loss of their fund management qualification.
In their announcement, Blackstone concluded by saying, “Since ancient times, there have been three major enemies in Chinese civilization – killing one’s parents, stealing a wife and child, and sabotaging one’s livelihood.”
Following the publication of this article, it sparked market attention. In response, a staff member of Blackstone Capital told “Huaxia Times”, “It’s just me venting on my own public account, that’s all, hehe. Self-media is our voice, we can say whatever we want.”
A lawyer in Beijing commented, “This notice carries a sense of threat, but does not constitute infringement because it does not specify anyone.”
On April 26th, the China Securities Investment Fund Association issued a public notice regarding the cancellation of registrations for six private equity fund managers, including Beijing Blackstone Capital Management Co., Ltd., due to abnormal operations.
In China, reasons for the cancellation of private equity fund manager registrations by the association mainly fall into two categories: abnormal operations and loss of contact. Abnormal operations generally include failure to submit the required legal opinion within three months after receiving written notice, inability to meet registration requirements, among other circumstances. A loss of contact institution refers to those the association cannot reach through registered phone, email, or SMS, and who fail to report the situation as required by the deadline.
Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, commented to the “Beijing Business Daily” that having their registration canceled could negatively impact the reputation of private equity institutions, leading to decreased trust from potential clients and partners. If these institutions wish to continue engaging in private equity business, they need to reapply for fund manager registration after meeting certain conditions.
It is advised that investors continue to monitor the integrity and compliance status of deregistered institutions, and safeguard their legitimate rights and interests through dispute resolution mechanisms specified in fund contracts and relevant legal channels.
According to the official website of the China Securities Investment Fund Association, as of June 2nd, 822 private equity fund managers have deregistered this year (including voluntary and involuntary deregistrations). Among them, based on the four reports released within the year, a total of 643 private equity fund managers were deregistered in the first four months of 2024.
Internet user “Sugra Bu Dou Di” commented, “The language used in this public statement is quite radical…”
Tencent user 1940903 revealed, “The number of people being fooled into buying funds will decrease. I bought a few funds recommended by Alipay’s gold-star managers and ended up with losses of around forty to fifty percent. Will I be fooled again? Once you buy, you are like a lamb waiting to be slaughtered. The system is flawed, investors lose money, yet the fund managers take it all without giving back a penny.”
Public records show that Blackstone Capital Limited was established on December 25, 2017. The company’s scope of business includes investment management, asset management, private equity investment, investment consulting, enterprise management consulting, and business information consulting.