"We are foolish and sweet to step on the thunder. The scammers' methods are too clever." In August 2019, facing a group of angry investors, a senior executive from Xiangcai Securities, one of the victims of the "Luo Jing case," said.
Recently, with the public disclosure of the disputes between JD and Noah, the "Luo Jing case" has once again received widespread attention. In November 2022, the Shanghai Second Intermediate People's Court (hereinafter referred to as the "Shanghai Second Intermediate People's Court") made a first instance judgment, and Luo Jing was sentenced to life imprisonment for committing contract fraud and bribery against non-state workers.
The reporter from Huaxia Times learned from relevant channels that the criminal part of the "Luo Jing case" is still in the second trial process, and the Shanghai Higher People's Court (hereinafter referred to as the "Shanghai High Court") will hold a trial on December 7, 2023. "Luo Jing has always believed that she did not commit fraud and only admitted to bribery," said an insider.
This sensational fraud case does have many astonishing details. The first instance verdict obtained by our reporter shows that Luo Jing and others used various methods in the process of fabricating accounts receivable debt financing, such as engraving the seals of JD and Suning companies, sending people to impersonate JD and Suning employees, intercepting confirmation letters sent by the victim to JD and Suning by express delivery, and so on. As of the time of the incident, Luo Jing and others defrauded the victim of more than 30 billion yuan, resulting in a total actual loss of over 8.8 billion yuan.
However, is JD involved in the case innocent? According to the relevant case files, Luo Jing's side did indeed cooperate with JD in the early stages, and later impersonated JD employees in JD's office space to commit fraud. A lawyer interviewed by the Huaxia Times pointed out that whether JD.com should be held responsible depends on whether it constitutes an apparent agency.
How to weave fraud websites
On the afternoon of July 5, 2019, A-share listed company Boxin Co., Ltd. (600083. SH) suddenly announced that its actual controller and chairman, Luo Jing, had been criminally detained by the Yangpu Branch of the Shanghai Public Security Bureau. The "Luo Jing case" became a market focus for a time, and the large-scale supply chain financing fraud case of up to 30 billion yuan, which was woven by Luo Jing alone, gradually surfaced.
According to public information, Luo Jing was born in 1971 and is a Hong Kong citizen. At the time of the incident, in addition to Boxin Holdings, she also controlled Hong Kong listed company Chengxing International Holdings Limited and Singapore listed company Camsing Health care Limited. She is a member of the Mulanhui Women's Leadership Club in the domestic business community and has been awarded the title of "Business Mulan" multiple times.
"So many financial institutions have been deceived, and the degree of strangeness in this case is still unbelievable to me," an ordinary investor in the "Luo Jing case" told a reporter from the Huaxia Times on December 5, 2023.
The first instance judgment shows that after trial, the Shanghai Second Intermediate People's Court found that in June 2011, the defendant Luo Jing became the legal representative and actual controller of Guangzhou Chengxing Marketing Management Co., Ltd. (renamed Guangdong Zhongcheng Industrial Holdings Co., Ltd. in October 2018), and also effectively controlled companies such as Guangdong Chengxing Holding Group Co., Ltd. and Guangdong Kang'an Trading Co., Ltd. (collectively referred to as the "Chengxing Series" companies). From February 2015 to June 2019, Chengxing Company utilized its supply chain trade background in procurement business with JD.com and Suning Company to finance through accounts receivable debt transfer and repurchase.
During the financing process, the defendants Luo Jing and Luo Lan (Luo Jing's younger sister) arranged for Chengxing Company to use Luo Lan's privately carved seals of JD Company and Suning Company, forge purchase and sales contracts and other financing materials, fabricate Chengxing Company's accounts receivable from JD Company and Suning Company, and sign accounts receivable debt transfer and repurchase agreements with institutions such as Xiangcai Securities, Shanghai Moshan Commercial Factoring Co., Ltd. (hereinafter referred to as "Moshan Factoring"), Shanghai Gefei Asset Management Co., Ltd. (hereinafter referred to as "Shanghai Gefei") under Noah Wealth, Yunnan International Trust Co., Ltd., and Anhui Zhongxin Financial Investment Group Co., Ltd. (hereinafter referred to as "Anhui Zhongxin"). Contracts, factoring contracts, and other contracts.
Under the instructions and arrangements of the defendants Luo Jing and Luo Lan, 10 employees of Chengxing Group participated in the signing and performance of the contract. They forged work cards in the offices of JD.com and Suning Company, impersonating employees of the two companies to conduct interviews with the victim units, hand over materials, and sign contracts in person; Display false JD company websites, provide false trade data, purchase and sales contracts and other materials to the victim units; Intercept the express delivery of debt transfer materials sent by the victim unit to JD Company and Suning Company, stamp false seals on the materials, and then return them to the victim unit; Opening accounts to impersonate JD Company accounts for payment collection, etc. Causing the victim to believe in the transfer of accounts receivable and creditor's rights and pay according to the contract, resulting in a total loss of over 8.8 billion yuan as of the incident.
Among them, Xiangcai Securities suffered losses of over 900 million yuan, Moshan Factoring suffered losses of over 2.7 billion yuan, Yunnan Trust suffered losses of over 1.5 billion yuan, Shanghai Gefei suffered losses of over 3.4 billion yuan, and Anhui Zhongxin suffered losses of over 99 million yuan.
In addition, since September 2016, in the process of conducting financing business with Noah Company and its subsidiary Shanghai Gefei and fraudulently obtaining money from Shanghai Gefei, Chengxing Group Company has sought illegitimate benefits. With the approval of the defendant Luo Jing, Luo Lan has repeatedly given Fang Jianhua, a staff member responsible for contacting Noah Fund and Chengxing Group Company under Noah Company, a total of over HKD 3 million, equivalent to over RMB 2 million (to be dealt with separately).
The second trial of the criminal case will be held tomorrow
On November 1, 2022, the Shanghai Second Intermediate People's Court issued a judgment, sentencing the defendant Luo Jing to life imprisonment and a fine of 20.1 million yuan for the crimes of contract fraud and bribery of non-state workers. The defendant Luo Lan was convicted of contract fraud and bribery against non-state workers, and was sentenced to 17 years and 6 months in prison, with a fine of 10.1 million yuan. The other 10 Chengxing employees involved in the case were sentenced to imprisonment ranging from three years and four months to eight years.
It is worth noting that according to insiders and judgments, after being arrested by the public security organs and in court trials, Luo Jing denied the fact of contract fraud and only admitted to the fact of bribery.
Luo Jing argued that Chengxing Group Company did not fabricate accounts receivable, and the materials for face-to-face signing with JD Company were prepared by the other party's organization. The payment period was changed to 180 days, and the confirmation letter was made in response to the request of the other party's organization. Chengxing Group Company has the ability to repay debts, and the outstanding debt of Moshan Factoring that has been paid off by a third party should be deducted from the criminal amount. His defense also pointed out that this case is a factoring contract dispute. Chengxing Group Company did not fabricate facts or conceal the truth, did not violate the contract, and had the ability to repay debts. The victim unit did not fall into a cognitive error. The report by Noah Company resulted in Chengxing Group Company being unable to repay debts, and Luo Jing did not constitute a crime.
The reporter from Huaxia Times learned that after Luo Jing and others appealed, the criminal part of the case is still in the second trial process. Insiders told reporters that on December 7, 2023, the Shanghai High Court will hold a trial. The reporter subsequently found the relevant court announcement on the website of the Shanghai High Court and confirmed its authenticity. A person from a victim unit also told reporters that the company will send people to the court to listen.
At the same time, due to the principle of "punishment before the people", some civil cases in the "Luo Jing case" have been put on hold for a long time, but have been gradually advancing in the near future. According to reports, on November 24th, the Shanghai Financial Court held another hearing to hear the factoring contract dispute case between Shanghai Gefei, a subsidiary of Noah Wealth, and Shanghai Ziyan Auto Rental Service Co., Ltd. against JD, Chengxing Company, Suzhou Shengjun and other companies. Noah sued on the grounds of infringement liability dispute, demanding that JD and other companies jointly bear all the losses identified in the criminal case of Chengxing, totaling over 3.5 billion yuan.
On December 4th, JD Group issued a statement regarding this case, stating that it was maliciously sued by Noah Wealth. "JD, as an uninformed victim, was involved in a four-year malicious lawsuit, causing significant damage to the company's reputation and rights." JD also claimed that Noah Wealth attempted to shift responsibility and find a "scapegoat" for itself.
On the evening of the 4th, Gefei Asset, a subsidiary of Noah Wealth, issued a statement stating that the case occurred four years ago and was recently heard in court. At this critical moment in the judicial trial, it expressed confusion about JD Group's sudden and emotionally charged statement. At the same time, it is called upon that JD Group can submit specific evidence of its "100% gun lying down" to the court in a legal and compliant manner.
On December 5th, a reporter from Huaxia Times contacted the relevant person in charge of JD.com, who responded that the case had already been heard in court, which was a bizarre malicious lawsuit. Noah misled investors in order to transfer the conflict, and he believed that the court would make a fair judgment. Noah Wealth did not respond to the reporter's request for comment.
Is JD Accused of Innocence
So, should JD be held responsible for the case?
The reporter from Huaxia Times reviewed the verdict of the first trial of Luo Jing and learned that the relevant judicial appraisal opinion confirmed that the Chengxing company controlled by Luo Jing had engaged in supply chain business with JD.com in the early stage. In the later stage of the fictitious financing process for JD Company's accounts receivable, Luo Jing's side forged a work license in JD's office and impersonated JD employees, conducting interviews with the victim unit, handing over materials, and signing contracts in person.
The judgment disclosed a detail of Chengxing employees engaging in fraudulent activities under the name of JD. com: from November 2017 to June 2018, JD. com and Chengxing had Vivo mobile phone and Asus advance payment procurement business, with Chengxing employees Liu Hua and Wang Jun as contacts. On June 17, 2019, Wang Jun asked JD employee Liu Mouchao for invitation codes for six people to enter the JD company building. Liu Hua sent a WeChat message to JD employee Zhang Mouyu, requesting an appointment code to feel the atmosphere of 618. Zhang Mouyu gave him the appointment code, and the next day, JD's Apple department head, Chu, learned from Chengxing's partner that someone had impersonated him.
A person from the victim's unit told reporters that the main manifestation of JD's involvement in the case is that some of the fraudulent activities occurred in JD's office premises. "Is JD really innocent? Is JD really unaware of the entire supply chain system?"
Lawyer Wei Jingfeng, Deputy Director of Beijing Hehong Weiyu Law Firm, stated in an interview with the Huaxia Times that whether JD.com should bear responsibility mainly involves the issue of whether it constitutes apparent agency. That is, Luo Jing is the agent and JD.com is the principal. If it constitutes apparent agency, the responsibility is borne by the principal, namely JD.com.
Wei Jingfeng pointed out that according to the judgment, Luo Jing's side did indeed cooperate with JD in the early stage, and later engaged in "work" at JD's office, and forged the work cards of JD's employees. If the victim is in good faith, thinking that Luo Jing has been cooperating with JD and is unaware of the subsequent termination of cooperation, it may constitute a situation of apparent agency.
However, Wei Jingfeng pointed out that the formation of an apparent agency also requires Luo Jing to continuously raise funds in the name of JD.com during the cooperation period, and obtain authorization and recognition from JD.com. If the behavior in this case is an isolated act, it may not constitute an apparent agency, and Luo Jing should bear the responsibility alone. In addition, if it does not constitute an apparent agency, it is necessary to consider a scenario, that is, why did JD continue to provide office space to Luo Jing after the end of the cooperation between JD and Luo Jing? If it is a simple leasing relationship, JD may be exempt from liability. If there is a certain degree of fault that causes misunderstandings among the victim, JD may also bear certain responsibilities.
Xu Hao, a lawyer at Beijing Jingshi Law Firm, believes that Noah can sue JD for compensation in accordance with the law. Although Luo Jing forged JD's official seal, they were in JD's office during office hours, so JD's employee identity was connected with Noah Company. JD was at fault for allowing non company personnel to impersonate their employees during their office hours. However, whether this claim can be supported by the court depends on whether Noah has fulfilled his duty of care and verification, and whether it conforms to past trading habits.
Some legal professionals also believe that the case clearly does not constitute a prima facie representation. Lawyer Bai Xiaoli, Senior Partner of Beijing Daokete Law Firm, believes that from a social perspective, if only the link to the signing location is considered to constitute a superficial agency, then major enterprises will be in a situation of personal danger, and they need to constantly prevent being hit, thereby increasing security costs. However, the means and methods of criminals cannot be prevented by appropriate measures taken by the hit company.
"On the contrary, the counterparties of contract transactions can identify scams and prevent being deceived with just a little attention. If objectively there are already many flaws and risks, and the trader blindly believes they are willing to take risks due to the temptation of interests, they should bear the risk themselves." Bai Xiaoli said.
This newspaper will continue to monitor the report.