CNBC AI News, July 28th – Haier Consumer Finance, along with several individuals, has been slapped with a total fine of 2.35 million yuan (approximately $325,000 USD) by China’s National Administration of Financial Regulation (NAFR), according to the regulator’s official website.
The breakdown:
Haier Consumer Finance itself was hit with a 1.05 million yuan penalty for a laundry list of transgressions. These include misleading marketing practices, dodgy debt collection tactics, lax post-loan management potentially leading to the misuse of some loan funds, opaque fee structures designed to manipulate revenue allocation, and a general disregard for consumers’ right to know.
As a result, Senior Manager Gao Xiang from Haier Consumer Finance’s Consumer Ecosystem Group, and Hu Yusen, Senior Manager from the Post-Loan Management Department, each received a warning.
An additional 500,000 yuan fine was levied against Haier Consumer Finance for artificially manipulating loan classifications. Huang Yinghua, then-Director and General Manager, was singled out, receiving both a warning and a 200,000 yuan penalty.
Furthermore, Guo Tao, Head of the Finance Department, Guo Zhend, General Manager of Risk Management, and Wu Wenhui, Director of the Information Technology Department, each received warnings.
Rounding out the penalties, Haier Consumer Finance was fined another 500,000 yuan for regulatory breaches related to interbank (or “peer-to-peer”) transactions.
Huang Yinghua, formerly at the helm as General Manager, was deemed responsible and disqualified from holding that position for two years. Guo Tao, from the Financial Market Department, received a warning and a 100,000 yuan fine.
The NAFR detailed that Haier Consumer Finance’s infractions covered a wide spectrum: from exaggerating claims in its marketing materials to employing questionable debt collection methods, failing to adequately manage loans after disbursement (potentially enabling funds to be diverted), utilizing ambiguous fees to massage revenue distribution, infringing on consumer transparency rights, engaging in illicit interbank dealings, and deliberately falsifying loan categorization.
Responding to the regulatory action, Haier Consumer Finance stated that the penalties stem from inspections conducted before 2021. The company emphasized its commitment to compliance, stressing that it has taken these findings seriously, has already implemented corrective measures, and pledges to continue improving its governance and safeguarding consumer interests.
Notably, this is not the first regulatory scrutiny for Haier Consumer Finance recently. The company was previously fined 250,000 yuan for violations concerning credit information management.
Haier Consumer Finance, established in December 2014, counts Haier Group as its largest shareholder, holding a 49% stake. It was among the first nationally-licensed consumer finance companies approved after China expanded its pilot program for such institutions.
On the performance front, since 2021, Haier Consumer Finance has shown significant revenue and net profit growth, reporting revenues of 1.086 billion yuan, 1.71 billion yuan, and 2.489 billion yuan, respectively. Net profits during the same period were 197 million yuan, 274 million yuan, and 365 million yuan.
In 2024, Haier Consumer Finance recorded operating revenue of 3.768 billion yuan and a net profit of 445 million yuan.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/5817.html
