Crisis At China's Largest VMS Provider, Netposa, Now State-Controlled
NetPosa, which bills itself as the PRC's largest VMS provider, is in a crisis. The firm is pursuing huge unpaid bills from clients, and its chairman is being sued for over $220 million of unauthorized loans, resulting in banks freezing NetPosa cash and shares. This all comes as the PRC government recently became NetPosa's controlling shareholder.
Inside this note, we examine the crisis at NetPosa, including:
- NetPosa Background
- Accounts Receivable Explode Amid Government Debt Crackdown
- Stocks and Cash Frozen
- Internal Investigation Reveals Massive Unauthorized Loans
- PRC Government Takeover
- Conclusion: Will NetPosa Survive?
**********
********* ******* ******* ***** (***** **** a****** **** *** *** *******),*******- ******* ** **** - ** a *** *** ******** *** ******* police. **** **** ******* *** **** when *** ********** ** **************** * ******* **** **** ** February, ********* ******** ***** ********* *********.
*****'******** ************ ************* ******* ** *** ** *** largest *** ***** *********. ******* **** over $*** ******* ** ******* ** 2018 ********* ** ********* ******; *** **********, ********* *** **** than **** ****,** ~$*** *******.
Accounts ********** ******* **** ********** **** *********
******* *** *********** **** ******** **********, i.e. *** ********* *** *** ****** their *****. *** **** *** ~$*** million ** ** (*.* ******* ***)***-**-**** ****.****'* **** **** *******'* ****** ******* for **** **** *** * **.*% increase **** *** **** ****** (*** almost************ ****** **** ****):
**** ******** *******'* ********* ******* *** none ** **** ********* ***** ******** clients **** ******* ***** ** ***** repayment *****. *******, *** **** ****** in ******* ****** ********** ** *** ******* ** **** issues ******* ** ***** *********** ********* struggles **** * ******* ************** *********:
*** ** ***high ***** ** ***** ********** **** and the decline ** ***** ********* ******* ********, the growth rate of the company's business needs will slow down, the construction period of the project will be extended, and the period of corporate capital withdrawal will be lengthened. This *** ****** ** ** ******** ** *** ****** ** ******** ********** *** ** ******** ** *** ****** ** *** *****. [emphases added]
*******'* *********** ** **** ******** *********** unchanged, ******** ** $**** (*.* ******* RMB) ** **** ****, * **% increase ****-**-****, *** *******'*****-**** ******,***** ****** **** "** *******, ***** [government] ****** ******** *** ********* *** debt ****** *** ****":
Stocks *** **** ****** *** ** ********
****************** ****** **** *** ****** ** its ******** *** ********** ********* ****** ** **** ********* ****** due ** ******** ********* ***. **** affected **% ** *******'* ***** ******. Over $** ** **** **** ** NetPosa ** ***** *** ******** ****.
Internal ************* ******* ******* ************ *****
** ********* **, ***************** ******** ************* ******* **** *** had **** *** **** *** *******'* as ********** ** ***** ***** **** outside *********. *** ***** *****'* **** fully ****, ** ***** ***** *** now ***** *** ********* ****** ** freeze ***'* ****** *** **** ** NetPosa's. *** ***** ****** ** ************ loans ** **** $****, ** ***** only $*** *** **** **** **** so ***.
Chairman **** ***** ** ***** *** ****** *****
*** ***** **** ******* ******* *** for *** ********:
*** ***** *** ** **** *** could ****** *** ************* ******'* ** force-liquidated, ** ** *** ******* **** of **** ** ********** ** ******** for **** (~**% ** *** ****** were ******* ** ** ********* ********** ** ****,**** **** * **** ** ********% ** *******.) ******** ****** ** ****** ** China *** *** **** ***** ** a *****"****** ** ********* ****"**** ***** ****** *******.
****'* *** ** ******: ** *******'* stock ***** ****, ***'* ********* *** more ********** (******) ** ***** *** loans; **** **** **** ****'* **********, they ******** **** (* "****** ****"). The ************* ********* **** ************-****** ***** made ********** ** ***** **** ****** calls; **** **** ****** ** *** and ******* *** *** ** ******** board *************. ** **** ***** ******* board ******* *** **** *** ** such ************, *** ***** **** ** records ** *** ***** **** ******* to **** ***** ***** (** ***** be ********).
Clearing ******** **********
*** ****** ******* ** *** ***** was ** ****** ********** **** ** clear *******'* ******* ******** ********** *******. Once *****, ***** **** ********* ****** by *** *** *******, *** ******* proper ***** *************.
NetPosa ********
**** ********** *** *** ****** ** the ******* ** *****, *** ******* chairman. ******, ******* **** ** ***** handle *** ******** *** ***** ***** to "***** *** **** ** **** as ********":
*** ******* **** ******* * ****** to ****** *** ********** *** ****** accounts *** ** *** ***-********* **********; at *** **** ****, *** ******* and *** ******* ***** ** ********* will **** *** ****** *********** ***********, Mr. *** *****, ** **** ********* measures ** ******** ***** *** ******** of ****** *********' ******* **********, ******* occupation, ***., *** ***** *****. ******* the ********* *** ***** *** **** as **** ** ********.
NetPosa *** *** ********** **********
**** *** ***** **** ***** *** Chinese ********** ********** ****** *******'* *********** shareholder, **** ****** ****** **** **% of *** *******'* ******.
** ***** ****, **************** * ******** ***** *** * ********** ** the *****-***** ****** *********** *** ************** Commission (*****) ** ******* ******** ******* Guang ** *********** ***********, **** ***** buying **** ** ***'* ****** ******** and ********* ****** ****** **** *** rest.******* *************** ********** ****** **** ******** *** country's *****-***** ********** ****** *** ****** *** ******** *********** ************* *********. ** ***** *********, *** deal*** ********** *****'* ************.
************ ***** ******* ****** ** **** ** * Sichuan ********** **** ** "******* ******* ***********", **** ******* ********* ** ***** an *&* ****** ** *******'* ******* Chengdu.******* ***** ******* ******* ********** ** the ****, ******* ********* ***** **** *******'* ********* ****** with ***** ********** ********. **** ******** are *** ******* ** *****, ************ as *** ******* *****, ** ******** in *** ***'******** ***** ****** ** ******* ***** to **** **** ******.
*****'* ** ******** ***** *** ***** of *****'* *********** ***** ***** ** the ***** ********, ***** ****** ********* about ***** *** *********. *******'********* ********************** ***** ********** ** "******** **********" by *** *******'* "*******" **********.
Conclusion: ******* *** **** **** **** ***
******* *** ******* ******** ********** ****** and *** ********* ** *** **** unauthorized *****, **'* *** ***** ** us *** ************ ***** ********* ***. In *********** *************, ******* ****** ** ***** *** make *** ******** ***** *** ******** impact ** *** ********:
*** ***** ********** ******* **** ******* proceedings *** **** *** *** **** closed. ** ** *********** ********** ** judge *** ****** ** *** *******'* current ****** ** ****** *******.
**** *** ** ****** ********* ** NetPosa's ******** ****, ****** ****** ** NetPosa's *** ********* ***********. ******* *** not ******* ** *** ******** *** comment.
** **** ** *******'* ********* **** won *******, *** ******* ********** ** good ** *** *** **** **** pay ** *** ***, **** ***'* have * ******** ** ***** *** can ****** ***** ****.
*** ********* ******* ** ********** *****, the ******* ** ****** *** ******* capital, ** *** **** ***** ** collect *** ******* *********** *** * guess **** ** *** ***** ****** netposa **** *** *** *****.
*** ********** ********* ** **** ******** a *** ** **** *** ******* afloat (** * **** ****, * recall * *** ***** *** *** Korean ********** **** *** * *** of ******* ** ******* *** ******* new **** ************ ******** ** ***** to ****** ***** *************).
*** ***** **** *** ******* ** if ***** ** **** ***** *** table ***** ** *** ** ***** projects. ** ** *** ******** *** a ***** ********** ******** ** ***** you * ******* *** ****** **** money **** **** ***. ** ***** are ***** **** ****, *** ********** will *** *** *** ******* ***** an **** ***** ************* ***** **** land *** ** **** *** ***** the ******* ****.
#*, ******, **** ******.
* ***** **** *** ********** ********* should ********** *** *** ***** *** still * ******-**** *****:
(*) ** *** ********** ********* **** back *** *** "*** ** **** not **** *** *** *** ***** projects *** **** ** ** ****", what **** ******* **? **** **** a ******* ********* ****** **** **** longer *** **** ********* ***** ***** when ** ** ******?
(*) ** *** ********** ********* *** having ********** ****** *** **** **** already ******, **** ** **** **** buying *** ******** **** *******? **** if ******* **** **** *** ******** projects **** **** * **** ** having ******** ** **** *** **** / *******, ***/**?
*******, ******* *** **** **% **** over **** ** ** *** ***** continued ********** ***** ***** ** *** risk ** ********* ********* / *****, see *** * *** ******* *****:
*** ** **** ****** *****?
*** ************** *** **** ******** **** ****. ** ***** ** ****** *****:
****** *************. ****** ****** *** ***** pay.
** ***********, ** ************.
** ** ****** ******. ** **** exclusive ********* ** ******** ******, **********, product **** ******* *** ****** **** around *** ***** *** ** **** access.
******** *****'* **** **** ****** ****** scope :* :*
******: * ******* ***** *** ******* the ****** ** **,*** ****** **** (1,588 ****** ******) ** ******* ****** space ** *******, ********* ** ********* ******* ************. *** ****** ** ****** *** three ***** (***** ********* ****). *** office ***** ** *** *** **** address ** *******'* ******* ************ (******** nearby).
**** *****'* **** *** ******* **** been ********** ****** ***. **** **** means ** **** *** ********** ***** Liu ***** *** ******* ************ *** the ***** ** **** *** ****** space *** *** **** *****, ** case *** *** ******* ***'* *** back ***** *****. ** **** *******, the ********** *** **** ***** *** offices *** ********* (*.*. ****) **** to ***** ***** *****.
*** ******* **** ****** ********* **** the ***** *** ****** ***** ** the ******** ***** *** ******* ****** is ********* *****$**,*** *** ****** *****, ** **** property ***** ** ***** $**,***,***.
*******, ********* *********!
*********:
* ** ******* ** *** *** this *******. *** ********** ******** ** surveillance *** **** * **** **** for *** *************. ** **** *******, it ***** ********* ****** ***** ********* and ***** ******* *****.