What caused the decline of Chundu?

Perhaps it was too easy to succeed, and the operators of Chundu began to have a fever. Local leaders also asked Chundu to be "bigger and stronger" as soon as possible, which played a role in fueling the situation. In a relatively short period of time, they invested heavily in many commercial projects such as medicine, tea drinks and real estate. Cross-regional and cross-industry acquisition and merger of Luoyang Gong Xuan Building, Pingdingshan Meat Joint Factory, Chongqing Wanzhou Food Company and other 17 hopeless enterprises, covering pig slaughtering and processing, cooked meat products, tea drinks, medicine, hotels, real estate, wood processing, commerce and other industries, and embarked on the road of diversified and synchronous development. The enterprise's business projects are complex, with low correlation, no connection with the original main business, and the investment time is very concentrated, which makes it develop rapidly at one time.

In terms of assets, Chundu's assets grew at an average annual rate of nearly six times, from 39.5 million yuan in 1987 to 2.969 billion yuan. What is terrible is that this rapid expansion has not only brought benefits to Chundu, but also brought a heavy burden to enterprises. More than half of the 17 enterprises acquired by Chundu suffered losses, and nearly half of them closed their doors and stopped production, which undoubtedly added insult to injury. 1In August 1993, Chundu established Chundu Group Co., Ltd. on the basis of the original Luoyang Meat Complex, and raised 654.38 billion legal person shares from 432 shareholders, raising nearly 200 million yuan. It is a good thing to use a lot of money correctly, but it may be a disaster if it is used wrongly. At this time, Chundu just used this money to engage in blind diversification. At the beginning, I invested more than 65.438+million yuan to participate in 8 enterprises, and later I invested 65.438+05 billion yuan to hold 65.438+06 enterprises. The result was a big burden.

1In September, 1994, Chundu established a joint venture with five foreign investors, including Baoxing Investment Company of the United States, attracting foreign investment equivalent to RMB 290 million. However, after the joint venture, the foreign party discovered the problem of Chundu and found reasons to withdraw capital in 1997. According to the agreement, plus the principal and interest plus dividends, Chundu lost more than 654.38 billion yuan this time.

1998 12, Chundu Group, which was already suffering from heavy losses, decided to select some assets of the group company for reorganization and listing, raising 424 million yuan. Chundu Group, a major shareholder, and Chundu Food Co., Ltd., a listed company, are actually a group of people with two brands, and there is no separation of personnel, assets and finance. In the third month after listing, Chundu Group took 65.438+0.9 billion yuan from listed companies to pay off other debts, and then "paid" several funds of listed companies one after another, totaling 330 million yuan, accounting for 80% of the total funds raised by listed companies, which led to the 654.38+0 investment projects promised by listed companies to the public becoming a dead letter, making the listed companies with Chundu core business lose great development.

Blind fund-raising and blind diversification have led Chundu to a point of no return.