On August 22, Taihe Group announced that its Chairman and General Manager, Huang Qisen, has been placed under detention by the Supervisory Committee of Xinmin City, Liaoning Province, on suspicion of violating the law. This development, coupled with the freezing of the company’s assets and penalties imposed by the China Securities Regulatory Commission, may further intensify the operational pressure on Taihe Group. Huang Qisen, who once had a net worth of 20 billion yuan, and the enterprise he founded are facing multiple hardships.
In response to these events, on the same day, Taihe Group also issued a public announcement regarding the receipt of an administrative penalty decision from the Fujian Regulatory Bureau of the China Securities Regulatory Commission related to the company and relevant individuals.
The Fujian Regulatory Bureau penalized Taihe Group and eight executives for illegal disclosure and violations, imposing a total fine of 17.4 million yuan. Among the eight executives, their individual fines totaled 11.4 million yuan.
According to the announcement, the company received a warning from the authorities and was fined 6 million yuan; Huang Qisen was warned and fined 3 million yuan; Ge Yong, former director and vice general manager of Taihe Group, was warned and fined 2.5 million yuan; Wang Jinggang, former vice general manager of Taihe Group, was warned and fined 1.5 million yuan; Huang Yaowen, former vice general manager of Taihe Group, was warned and fined 1.2 million yuan; Shao Zhirong, former vice general manager of Taihe Group and regional president of the Guangdong-Hong Kong-Macao Greater Bay Area, was warned and fined 800,000 yuan; Li Weidong, former executive supervisor and chairman of the board of supervisors of Taihe Group, was warned and fined 800,000 yuan; Liu Xiangmin, former financial director of Taihe Group, was warned and fined 800,000 yuan; Ruan Shijiang, former supervisor of Taihe Group, was warned and fined 800,000 yuan.
Huang Qisen, the founder of Taihe Group, started his career in finance and ventured into founding Taihe Group in 1996. As a representative of the Min-style real estate companies, Taihe Group was known for its aggressive expansion strategy, particularly during the period from 2013 to 2017 when its sales figures rapidly exceeded billions and reached the trillion mark. Its high-end products such as the “Courtyard Series” achieved great success in the market. With precise positioning in the luxury home market, Huang Qisen earned the title of “Second Generation Mansion Godfather.” In late 2017, he announced a sales target of 200 billion yuan, causing a surge in the company’s stock price.
On March 20, 2020, the Huang Qisen family made it to the 99th spot on the 2020 Hurun Global Real Estate Rich List with a wealth of 20 billion yuan.
However, behind the rapid expansion lay significant risks. Taihe’s fast growth heavily relied on high-cost non-bank financing, resulting in a substantial increase in short-term debt and posing high demands on capital turnover. As market conditions shifted, issues with the capital chain gradually surfaced. In July 2020, Taihe officially declared a debt default, marking a turning point leading the company into distress.
In the following years, Taihe Group’s business conditions continued to deteriorate, with increasing instances of assets being frozen and seized.
Financial reports show that in 2021, Taihe Group had total assets of 219.124 billion yuan, with liabilities amounting to 204.330 billion yuan, resulting in an asset-liability ratio as high as 93.25%.
Though the company claims that its operations are running normally according to the original organizational structure, asset freezing undoubtedly will have an impact on its operations. By 2023, Taihe Group’s stock was delisted, officially withdrawing from the capital market.
The company’s financial situation is reflected in the latest annual report. According to the 2024 annual report of Taihe Group, the company’s operating income was around 8.04 billion yuan, but the net profit attributable to shareholders was at a loss of approximately 21.3 billion yuan, a significant decrease compared to the previous year. The company explained that the main reasons for the losses were due to some operating entities entering bankruptcy proceedings and significant increases in investment losses and asset impairment losses from assets being auctioned to offset debts.
Iconic assets of Taihe have also been sequentially disposed of. Recently, the Taihe Building, once the headquarters of Taihe Group in East China, was auctioned off for approximately 660 million yuan, witnessing the decline of this once trillion-dollar real estate giant. From rapid ascent to debt default, stock delisting, and the investigation of its founder, Huang Qisen, and Taihe Group’s experience provides an intriguing case study of the changes in the Chinese real estate market.