On May 11, the official website of the Central Commission for Discipline Inspection of the Communist Party of China and the National Supervisory Commission announced that Ren Jianxin, former Party Secretary and Chairman of China National Chemical Corporation, and Yang Xingqiang, former Deputy Party Secretary and General Manager, are suspected of serious violations of discipline and law. They are currently undergoing disciplinary review and supervision by the Central Commission for Discipline Inspection and the National Supervisory Commission stationed in the State-owned Assets Supervision and Administration Commission of the State Council and the disciplinary inspection and supervision commission of Zhejiang Province. Ren Jianxin had previously caused dissatisfaction among senior officials due to the acquisition of Syngenta and tax evasion.
Public records show that Ren Jianxin and Yang Xingqiang had a long-standing relationship during their tenure at China National Blue Star Group and China National Chemical Corporation.
Ren Jianxin, 66, formerly served as General Manager of China National Blue Star (Group) Co., Ltd., then transferred to China National Chemical Corporation in 2004 as General Manager. In April 2010, he became the General Manager and in December 2014, he was appointed Chairman of the group.
In March 2018, Ren Jianxin became the Chairman of the restructured China National Chemical Corporation Limited, and retired in June of the same year.
Yang Xingqiang, 57, was appointed Assistant General Manager of China National Chemical Corporation in June 2007, concurrently serving as General Manager of China National Blue Star (Group) Co., Ltd.; in December 2008, he became Deputy General Manager of China National Chemical Corporation, also serving as General Manager of China National Blue Star (Group) Co., Ltd.; in March 2018, he became Director and General Manager of China National Chemical Corporation Limited. In May 2021, he transferred to the position of Party Committee Director and General Manager of China Salt Group Limited.
Ren Jianxin led a series of acquisitions, earning him the title of “China’s M&A King” by the Financial Times.
From 2014 to 2018, Ren Jianxin and Yang Xingqiang worked together at the original China National Chemical Corporation for nearly four years, experiencing the Syngenta acquisition together.
Starting from 2006, Ren Jianxin began eyeing overseas acquisitions, searching for overseas targets in various sectors and rapidly expanding business operations through acquisitions, including internationally renowned companies in various industries. His appetite for acquisitions grew larger starting in 2015.
Ren Jianxin’s most ambitious deal was the “elephant swallowing” acquisition of Syngenta, a leading global agricultural chemical company based in Switzerland.
In May 2015, on the same day Syngenta rejected Monsanto’s takeover offer, Ren Jianxin expressed his intention to acquire Syngenta, but the then CEO of Syngenta, Michael Mack, and the board rejected the offer three times, as Syngenta had no interest in this unconventional agricultural enterprise from China.
During negotiations with Syngenta’s management, Ren Jianxin increased his offer three times, gradually offering higher prices and better terms, ultimately outbidding other potential buyers by billions of dollars. Finally, under conditions of a full cash acquisition, retention of the management team, pure financial investment commitment, and a $3 billion reverse breakup fee, Syngenta agreed to the acquisition.
In June 2017, China National Chemical Corporation completed the acquisition of Syngenta. The total expenditure for the acquisition, including asset pricing, debt, and transaction costs, amounted to approximately $49 billion, making it the largest overseas M&A case in China to date. China National Chemical Corporation had minimal cash reserves (only $5 billion), with the rest coming from financial institution loans.
The trading structure designed by China National Chemical Corporation was complex, utilizing highly leveraged financing, with three layers and six SPV companies built from domestic to overseas. The entire merger process was full of twists and turns. Later, the Chinese side completed the transaction but faced high penalties due to its commitments.
Due to the high cost of the acquisition and overly confident decision-making, Ren Jianxin did not receive approval from the higher authorities in China. In June 2018, at the age of 60, Ren Jianxin retired, and Ning Gaoning, the former Chairman of Sinochem Group, concurrently took over as Chairman of China National Chemical Corporation, embarking on a challenging path of absorption, merger, and restructuring of the two state-owned enterprises.
One of Ning Gaoning’s major tasks was to reintroduce Syngenta Group, established in Shanghai in June 2019 after the restructuring, to the capital market. However, he did not achieve this even until his retirement in August 2022.
According to Caixin’s report, the acquisition of Syngenta by China National Chemical Corporation put significant financial pressure on state-owned assets and, due to its size, has not been able to return to the market. Additionally, an oil tax evasion case involving China National Chemical Corporation in 2021, caused outrage among senior officials and affected its listing.
On March 29, 2024, the Syngenta Group suddenly announced the withdrawal of its $65 billion IPO application on the main board, less than a year after withdrawing its STAR Market listing application in May 2023.
In addition to the ongoing controversy surrounding the Syngenta acquisition, Ren Jianxin and Yang Xingqiang’s biggest issue was the improper use of China National Chemical Corporation’s name to provide guarantees for private enterprises, resulting in losses of approximately $3 billion for the company.
As reported by Caixin, Wang Chunyun, former Chief Compliance Officer of Gansu Bank, was put under investigation by relevant departments around the Chinese New Year in 2023; shortly after, Li Xin, the first Chairman and CEO of Gansu Bank, was also placed under investigation, related to China National Chemical Corporation’s improper guarantees for private enterprises.
During Li Xin’s tenure as Chairman of Gansu Bank, the bank granted a total of 2.5 billion yuan in loans to a private enterprise named Gansu Tianji Investment Management Co., Ltd., which has been unpaid for several years.
On April 21, 2022, the Gansu High Court ruled in the second instance that China National Chemical Corporation, as a guarantor, should bear joint and several liability for the repayment of 2.57 billion yuan by Tianji Company to Gansu Bank. Including penalties and interest, the total amount reached 3 billion yuan.
Ren Jianxin was the Chairman of China National Chemical Corporation at the time the commitment was made, and the General Manager Yang Xingqiang signed the agreement. Subsequently, Yang Xingqiang transferred to become the General Manager of China Salt Group Limited in 2021, which may be related to this case.
According to sources close to the State-owned Assets Supervision and Administration Commission, when Ren Jianxin retired in July 2018, violations of guarantees for Tianji Company were discovered during his departure audit, and he was given a “warning talk.” However, at that time, China National Chemical Corporation had only received a notice from Gansu Bank to fulfill its repayment obligations, and the case had not yet gone to trial.
Subsequently, China National Chemical Corporation won the first instance in Lanzhou Intermediate People’s Court on December 24, 2020, but lost in the second instance in the Gansu High Court on April 21, 2022. Following the defeat in the second instance, China National Chemical Corporation’s internal mechanism for accountability was initiated to minimize losses, clarify the reasons, and some relevant personnel involved in the transaction have been disciplined.