Key facts
- Bank of Shanghai won a final court ruling to recover 2.58 billion yuan from Baoneng Group.
- The Guangdong High People's Court upheld an earlier verdict ordering repayment of loan principal, interest, and penalties.
- Baoneng Group's founder, Yao Zhenhua, and several affiliated companies are jointly and severally liable for the debt.
- This victory is the first conclusive win in Bank of Shanghai's effort to reclaim nearly 13 billion yuan from Baoneng.
- Two other loan dispute cases involving Baoneng Group resulted in a first-instance judgment for Bank of Shanghai, totaling nearly 7.4 billion yuan.
Bank of Shanghai Co. has achieved its first conclusive legal victory in its campaign to recover nearly 13 billion yuan from the distressed Chinese conglomerate Baoneng Group, winning a final court ruling to reclaim 2.58 billion yuan ($380 million).
The Guangdong High People's Court upheld a prior verdict, mandating Baoneng Group and its founder, Yao Zhenhua, to repay the loan principal along with hundreds of millions of yuan in accrued interest and penalties. This ruling stems from a financial loan contract dispute initiated by Bank of Shanghai's Shenzhen branch against Shenzhen Tuojisi Technology Co., Ltd., a Baoneng affiliate.
Tuojisi Technology is required to repay the 2.58 billion yuan principal, plus interest calculated up to June 16, 2022, penalty interest up to August 31, 2023, and ongoing penalty interest at an annual rate of 7.5% from September 1, 2023. The court also affirmed the joint and several liability of Shenzhen Shenye Logistics Group Co., Ltd., Tuojisi Group Co., Ltd., Baoneng Investment Group Co., Ltd., Baoneng Holdings (China) Co., Ltd., and Yao Zhenhua himself for these debts.
The legal battle originated in 2020 when Bank of Shanghai's Shenzhen branch entered into a loan agreement with Tuojisi Technology. Upon the company's failure to repay upon maturity, the bank initiated legal proceedings, which have now culminated in this final judgment after an appeal process.
In addition to this case, Bank of Shanghai has secured a first-instance judgment in two other loan dispute cases against Baoneng Group, involving a total of nearly 7.4 billion yuan ($1.06 billion). These cases also hold Shenye Logistics as the primary debtor, with Yao Zhenhua and affiliated companies jointly liable.