Fake bankruptcy to escape debt? Another shipyard on the 'whitelist' has collapsed

Owing 260,000 yuan in supplier payments, its assets repeatedly seized, and once one of Fujian Province's earliest whitelisted shipyards and the nation's first private shipyard to enter the military shipbuilding field—Changxing Shipbuilding Heavy Industry has finally gone bankrupt.

Changxing Shipbuilding Heavy Industry declared bankruptcy liquidation due to overdue supplier payments and inability to repay debts.

On November 1, the Fuan City People's Court of Fujian Province issued an announcement, deciding to select a manager for the bankruptcy liquidation case of Fujian Changxing Shipbuilding Heavy Industry Co., Ltd. through a competitive process.

The announcement shows that Changxing Shipbuilding Heavy Industry was registered and established on May 16, 2005, with the Fuan City Administration for Industry and Commerce of Fujian Province, with a registered capital of 260 million yuan. Its business scope includes the manufacturing of marine engineering special equipment and port machinery equipment; shipbuilding, etc. The applicant for bankruptcy, Taizhou Andali Shipbuilding Accessories Co., Ltd., holds a claim of 262,372.15 yuan against Fujian Changxing Shipbuilding Heavy Industry Co., Ltd. In addition, according to the "China Execution Information Disclosure Network," as of July 12, 2022, the company had 15 concluded execution cases as the executed party.

It is understood that on September 26, 2016, the Fuan City People's Court made a judgment on the case of a contract dispute between Andali Company and Changxing Shipbuilding Heavy Industry, requiring Changxing Shipbuilding Heavy Industry to pay Andali Company 262,372.15 yuan within ten days of the judgment's effectiveness. After the case became effective and entered execution, the Fuan City People's Court ruled to terminate the execution procedure on June 1, 2017.

On January 11, 2022, Andali Company applied to the Fuan City People's Court for bankruptcy liquidation of Changxing Shipbuilding Heavy Industry on the grounds that Changxing Shipbuilding Heavy Industry owed it 262,372.15 yuan in payments, which had been confirmed by a court judgment and entered execution, and that due to Changxing Shipbuilding Heavy Industry's numerous debts and repeatedly seized assets, the disposal had reached an impasse with no assets available for execution, thus terminating the execution. However, the Fuan City People's Court believed that Andali Company's bankruptcy application against Changxing Shipbuilding Heavy Industry did not meet the conditions for accepting bankruptcy cases and did not accept its bankruptcy liquidation application.

Subsequently, Andali Company appealed against the judgment to the Ningde Intermediate People's Court of Fujian Province. The Ningde Intermediate People's Court held that Changxing Shipbuilding Heavy Industry was unable to repay its due debts to Andali Company, and that despite enforcement by the people's court, it was unable to repay its debts, meeting the legal requirements of the debtor's inability to repay due debts and a clear lack of repayment ability, and should therefore be deemed to have grounds for bankruptcy. Therefore, it ruled that the Fuan City People's Court should rule on the acceptance of Andali Company's bankruptcy liquidation application against Changxing Shipbuilding Heavy Industry.

One of Fujian Province's earliest "whitelisted" private shipyards, the first private shipyard to enter the military shipbuilding field.

It is understood that Fujian Changxing Shipbuilding Heavy Industry was formerly Fuan Saijiang Shipyard, established in 1988, and renamed after technological transformation and expansion in May 2005. Changxing Shipbuilding Heavy Industry is a professional joint-stock private enterprise engaged in the construction and repair of large and medium-sized ships. It once built the first iron-hulled ship in eastern Fujian and has an annual shipbuilding capacity of 200,000 deadweight tons. It is the leading enterprise in Fuan's shipbuilding industry.

In February 2017, Changxing Shipbuilding Heavy Industry, as the East China (Fujian) Ship Comprehensive Support Mobilization Center, became the fourth unit in the country to conduct a pilot joint review of on-site certification for weapons and equipment licenses and manufacturing qualifications. This is the second advantageous enterprise in Fujian Province to obtain military auxiliary ship construction qualifications and the first private enterprise in the country to enter the military shipbuilding field. In May of the same year, Changxing Shipbuilding Heavy Industry was included in the Ministry of Industry and Information Technology's list of enterprises meeting the "Shipbuilding Industry Normative Conditions" (whitelist), one of the earliest private shipyards in Fujian Province to be included in the "whitelist".

In fact, as early as 2016, due to three oil tankers being abandoned by the shipowners, Changxing Shipbuilding Heavy Industry's capital chain began to experience problems. In the following years, Changxing Shipbuilding Heavy Industry actively adjusted and sought market opportunities, successively winning bids for fishing vessels, port island access, and yacht marinas, and the shipyard maintained production. In 2020, Changxing Shipbuilding Heavy Industry also delivered the "DLN Batu Layar" passenger-roll-on/roll-off ship exported to Indonesia. The ship is 109 meters long and can carry 400 passengers and 80 cars. It is the largest passenger-roll-on/roll-off ship built by Fujian shipyards to date, worth 50 million yuan.

In 2021, Changxing Shipbuilding Heavy Industry also delivered the 123-meter refrigerated transport ship "Fuyuan Yunyun 226," built for Zhongyu (Fujian) Fisheries Co., Ltd. The ship is 123.30 meters long, 18.50 meters wide, 10.50 meters deep, with a design draft of 6.80 meters, a deadweight of about 7,000 tons, a service speed of 14.5 knots, and four refrigerated fish holds. This is the first refrigerated ship built in Fujian Province to unlimited navigation area standards and the largest refrigerated ship currently built in Fujian's jurisdiction.

Due to overdue supplier payments, Changxing Shipbuilding Heavy Industry announced bankruptcy liquidation in January 2022. Clarkson's data shows that Changxing Shipbuilding Heavy Industry has not received a new ship order since 2020.
 
Interestingly, however, You Changzhi, the former general manager of Fujian Changxing Shipbuilding Heavy Industry Co., Ltd., is currently the general manager of a company called "Fujian Changxing Marine Equipment Co., Ltd." According to the information, Fujian Changxing Marine Equipment Co., Ltd. was established on December 19, 2011. Except for the name, the information of this "new company" is almost identical to that of Changxing Shipbuilding Heavy Industry. It is said that the shipyard has an annual production capacity of 200,000 tons and is a well-known modern comprehensive shipbuilding enterprise integrating research, production, trade, and service. In 2017, Changxing Marine Equipment Co., Ltd. became the only private military-participating enterprise in the country with military salary qualifications.