Chinese conglomerate Reward Group (洛娃集團), whose CEO Hu Keqin (胡克勤) had ambitious plans to open 1,500 bakeries in China using flour produced on swathes of French land that he snapped up, has gone bankrupt, court documents showed.
Beijing’s Chaoyang District Court on May 13 accepted an application to enter receivership filed by Hu’s group, a June 2 notice on the national bankruptcy register showed.
The Beijing-based group, which originally specialized in infant formula and cleaning products, has triggered debate in France about land grabs with its large purchases of agricultural land in the past few years.
In an interview with reporters last year, Hu said that he had bought about 3,000 hectares in France since 2014 and planned to open 1,500 bakeries in China in five years, supplied with French flour.
In 2017, Reward took control of a lavender soap maker in the south of France, Le Chatelard 1802.
Reward also owns a cosmetics factory in the US.
Despite Hu’s dream of conquering China with baguettes, it only opened three Chez Blandine bakeries in Beijing, and they have already closed, according to Dianping.com (點評網), the go-to reference site for shopping and services in China.
The notice published online said that a shareholders’ meeting at the end of December last year had approved a request to file for bankruptcy.
According to its balance sheet at the end of December, Reward still had more assets than liabilities — more than 11 billion yuan against 6 billion yuan (US$1.6 billion against US$871.4 million).
However, the group said that it had insufficient cash and its assets were difficult to sell.
Fitch Ratings Inc last year announced that Reward had been unable to pay a debt of 300 million yuan in early December, while at the end of September it assured that it had 4.15 billion yuan in cash.
Fitch lamented the lack of transparency surrounding the accounts of Chinese firms, the non-publication of “relevant” information and notoriously incomplete audits.
Beijing has since announced a tightening of corporate debt control.
In France, where Hu used legal loopholes to skirt rules that can allow the government to block sales of farmland, French President Emmanuel Macron has vowed to crack down on foreign investors buying up agricultural land.
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