Lu Zhengyao’s iron four corners Jiang nanchun

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Article / Sanyan Finance
Source: Sanyan Finance (ID: sycaijing)
Business people generally have a custom that they always like to make the inscriptions of people with good looks hang in a conspicuous place and add luster to themselves. But once this person has an accident, these businessmen have a keen sense of smell, and the inscriptions will be removed immediately, as if they had never been.
Recently, Sanyan finance and economics found that the case introduction of focus media’s official website about car rental in Shenzhou has changed, the name of Chairman Lu Zhengyao of car rental in Shenzhou has been hidden, and the message part of Lu Zhengyao at the bottom of the case has been completely deleted.
From Baidu snapshot, it can be seen that the message part includes a photo of Lu Zhengyao and a paragraph of text, which has been completely deleted now.
Original page (Baidu snapshot)
Current page
In addition, another word “Lu Zhengyao” was deleted in the case.
Original page (Baidu snapshot)
Current page
Who is Lu Zhengyao? He is not only the chairman of Shenzhou car rental, but also the major shareholder and chairman of Ruixing coffee. Ruixing and Shenzhou’s car rental share prices both plummeted after the company revealed that its financial data had been falsified.
In fact, behind Shenzhou car rental and Ruixing is the well-known “iron triangle”, namely, Lu Zhengyao, founder of Shenzhou, Liu Erhai, founder of joy capital and Li Hui, founder of Dazheng capital. They use the same capital trick to promote the listing of Shenzhou car rental and Ruixing coffee.
In addition, we can also find that there is another person in the iron triangle, who is the founder of focus media, Jiang nanchun.
Both Shenzhou car rental and Ruixing are very similar in playing methods. Huge amount of advertisements are put into focus media, and the capital playing method of burning money is expanding rapidly. It can be said that behind Shenzhou and Ruixing, Jiang nanchun’s hands have been pushing hard forward, forming a new iron quadrangle in a sense.
Jiang nanchun is also very proud of his achievements. Up to now, Shenzhou car rental has been put on the top of a number of cases on the official website as a typical focus.
Or affected by the lucky event, the focus share price also fell 5.67% on April 3.
Some people in the market suspect that the focus cooperates with Ruixing to make a fake. Many investors put forward cross examination to the focus and hope that the company will issue relevant explanations or clarification announcements as soon as possible.
What is the relationship between Ruixing and Fenzhong? Why is Fenzhong anxious to delete Lu Zhengyao’s relevant information? Is Fenzhong likely to participate in fraud?
1、 When is the message deleted?
First, let’s see when the message was deleted.
Google’s snapshot shows that focus officials did not delete Lu Zhengyao’s relevant content on March 30, while the 360 search snapshot on April 3 shows that Lu Zhengyao has disappeared from the web.
Google snapshot
360 search snapshot
As we all know, Ruixing disclosed that the financial data was fake on the night of April 2. In this view, focus is in Ruixing after the accident to actively delete the relevant content of Lu Zhengyao.
2、 What did the message say?
Lu Zhengyao said: “since its establishment, we (Shenzhou car rental) have been using focus elevator media as the core to detonate the brand. This is very important for Shenzhou to occupy the market quickly and become an absolutely leading brand.
As a selected case of focus media, Shenzhou car rental has been advertising in focus media for 7 consecutive years. Fenzhong wrote in the text, “the original plan of Shenzhou car rental was to invest the advertising fee in TV, but the chairman of Shenzhou car rental found that the elevator media coverage is the most needed mainstream crowd in the car rental industry, and decided to invest 75% of the fee in Fenzhong elevator media. After the advertisement is put in, the car rental business is ignited rapidly driven by the mainstream crowd, and Shenzhou car rental only takes half a year to surpass its competitors. ”
Focus to help Shenzhou car rental counter attack, change to Ruixing is also established. Whether it is Shenzhou car rental or Ruixing, on the one hand, they rely on the mass distribution of advertising, on the other hand, they rely on burning money to quickly seize the market.
Focus is an important part of Lu Zhengyao’s business model. From the perspective of Shenzhou car rental as a selected case, focus is also very concerned about this customer.
After Rui’s self disclosure, Fen Zhong hurriedly deleted Lu Zhengyao’s relevant information on the official website, as if eager to get rid of the connection between the two.
In the market, there are doubts about whether or not the focus participates in Ruixing’s fraud, which was pointed out in the previous muddy water short selling report that Ruixing overstated the advertising expenses in the focus.
3、 What is the relationship between Fenzhong, Jiangnanchun, Shenzhou and Ruixing?
Before Ruixing, when Jiang nanchun of focus media gave a public speech, one of the successful cases that must be mentioned was car rental in Shenzhou.
In 2010, Shenzhou, founded only two years ago, officially launched a car rental industry war. With the scale of only 600 cars under its control, it was against the head brand of 1200 vehicles, yihi car rental. In that year, Lu Zhengyao took 75% of the total budget and put about 80 million yuan into focus.
In the next seven years, Shenzhou car rental continued to increase the number of points, which also became an indispensable material for Jiang nanchun’s speech.
In a speech in 2019, Jiang nanchun once again talked about car rental in Shenzhou. “On the 10th anniversary of car rental in Shenzhou, Lu Zhengyao picked up the microphone at the dinner party and went to the platform and said,” I want to thank three people for my life, the first one is Jiang nanchun, without Jiang nanchun, there would be no today’s Shenzhou… ”
Jiang nanchun said that his tears came out, “I feel that I have been affirmed and needed, more satisfied and more fulfilled than making money. Every time I say this, I still feel that kind of emotion. ”
After Ruixing coffee appeared, Jiang nanchun’s speech materials were enriched.
In Jiang nanchun’s view, Ruixing copied the success of car rental in Shenzhou, and focus is the catalyst to ignite the market. In an interview in March last year, he said proudly, “when you read the news recently, you can see that its (lucky) value has exceeded 2 billion dollars. In six months, it broke the valuation of $1 billion, in 11 months, it broke the historical record of China. ”
In June last year, Jiang nanchun said at the conference of Ruixing coffee partners that on the night of Ruixing coffee’s IPO in the United States, it has been paying attention to Ruixing’s listing for a long time, “which is not only an inspiration to China, but also a huge shock to Chinese entrepreneurs.”

On December 31, 2019, Jiang nanchun, founder of focus media, said at the 2020 Zhenghe Island Forum that today we see that Ruixing coffee sells about 700000 cups of coffee a day, and Starbucks buys 800000 cups of coffee. In the near future, we will hear that the better selling coffee in China is no longer a foreign brand.
4、 In muddy water report, Ruixing falsely reported 336 million advertising fees. What’s the matter?
In February, short agency muddy water released a short report on Ruixing. According to the report, Ruixing coffee began to fabricate financial and operational data from the third quarter of 2019, exaggerating the daily order volume of the store, the number of products included in each order, and the net price of each product, thus creating the illusion of single store profit.
It is worth noting that the report points out that Ruixing coffee has overstated its advertising in the third quarter of 2019 by at least 150%, especially in focus media.
In the second quarter of 2019 financial report conference call, Ruixing first disclosed that focus media accounted for 140 million yuan of the total advertising expenditure of 240 million yuan in the second quarter of 2019.
In the third quarter of 2019, CTR indicated that focus media spent 46 million yuan, accounting for only 12% of Ruixing’s advertising expenditure, far lower than the previous quarters. According to the report, Ruixing has overstated its advertising spending on focus by 158%.
According to the report, the difference between the company’s advertising expenditure disclosed by Ruixing financial report and the actual expenditure of focus media tracked by CTR market research structure is up to 336 million yuan.
However, the report does not directly point out that focus fraud, but only through the focus sales data, Ruixing overstated the advertising expenses.
In the internal investigation revealed by Ruixing, it also said that in addition to the false report of more than 2 billion sales, some costs and expenses also increased significantly, but the specific costs were not disclosed in detail.
In the third quarter of 2019, Ruixing pointed out that the sales and marketing expenses in the third quarter were 557.7 million yuan (about 78 million US dollars), an increase of 147.6% compared with 225.3 million yuan in the third quarter of 2018, mainly due to the increase of advertising expenses.
We need to know that the total operating expenditure in the third quarter of 2019 is 2.132 billion yuan. Advertising is the largest cost expenditure besides material cost. It is easy to associate with “some costs and expenses” in the survey.
5、 Why does Ruixing inflate the cost?
It’s also easy to understand that the virtual increase of cost is related to the revenue without any essential change in the operation mode, and the general cost of a significant increase in sales should also be increased, otherwise the data will be too false, easily suspected by investors, and easily found by audit institutions.
Cost and income are mutual. For the company that needs to be invested, it is because the cost is too high, which affects the future income, that the company should enter the market and solicit investment.
If low cost and high sales are equal to high return and high income of the company, do you need to invest? Can I bear the cost, make money or not better?
So we must have a relatively high cost and high income to explain why we need to attract investment.
There are also input-output ratio, its own growth rate, figures of the same industry and other considerations.
Therefore, when Ruixing falsely reports the sales volume, it is bound to increase the cost accordingly.
In addition, the muddy water report believes that Ruixing tried to cover up the loss of the store by exaggerating the advertising expenses.
According to the shorting report, Ruixing overstated the operating profit of the store by 397 million yuan in the third quarter of 2019, while the difference between the advertising expenditure reported by Ruixing and the actual expenditure of focus media tracked by CCTV was 336 million yuan, which was almost the same.
Muddy water speculates that Ruixing may reuse its inflated advertising expenses for fraudulent income and store profits.
6、 Why is it possible that advertising costs are misreported?
First of all, Ruixing’s advertising cost is the largest expenditure next to material cost.
Moreover, the advertising cost is easy to operate, and other cost misstatements are easy to be found out, while the pricing of advertising fee is relatively free, and the invoice of advertising fee is easy to be issued, so it is more feasible in operation.
On the other hand, the advertising effect is not well measured, which brings about the flexibility of expenditure and the space of false report.
There are many factors influencing the advertising effect, which can be attributed to implementation, personal preferences and other reasons. It is difficult to determine the input-output ratio.
7、 How to deal with the false report if the crowd is divided?
It’s easy to find out that the fake cost may be Ruixing’s own fake account and exaggerated cost expenditure. As long as the auditor issues a letter of inquiry to the supplier, the data of the two can not be matched, then it will be exposed.
Another possibility is that Ruixing and the suppliers cooperate with each other, and the suppliers cooperating with counterfeiting have to issue real VAT invoices for these fictitious transactions for audit institutions to check.
What can we do if we cooperate with Ruixing to make false report?
For example, Ruixing gives the audience 100000 yuan for advertising. In this way, the focus has a sales volume of 100000 yuan and Ruixing has a cost of 100000 yuan.
Then focus can buy 50000 Ruixing vouchers and give them to employees as welfare. In this way, focus has 50000 costs and Ruixing has 50000 sales.
In fact, such an operation is equivalent to Ruixing spending 50000 yuan on advertising, but reflected in the financial report is 100000 cost and 50000 sales.
The above operations are true on the surface, but the starting point of the transaction is to open up.
In this mode, invoice is a very important part, which is used to show the authenticity of costs and expenses, and the trading partner is also real.
8、 Is it easy to find out the false invoice?
Senior financial personnel told Sanyan finance and economics that if the tax authorities think that a certain business is not quite right, the amount is too large or the number is too many, or it is not consistent with the actual business scope of the company, they will conduct an investigation.
The company needs to explain to the tax department and provide relevant business information (contract, contact person, invoice bottom sheet, delivery order, warehousing order, bank receipt, etc.). As long as there is one thing that cannot be provided, it will be considered as false business and punished according to the situation.
So what’s not easy to find out?
If the time is not very long, it is not very sensitive even if it is on account. Secondly, if the account is done well, it is not easy to find out.

For Ruixing, the false report starts from the second quarter of 2019 and does not meet the conditions for bad debts, which should be at least one year.
If focus cooperates with Ruixing to make a false invoice, but it is obvious that it does not meet the conditions for the establishment of bad debts, Ruixing’s expenditure can only be hung in focus’s receivables, that is, the payment has not been recovered, or the real transaction.
In this case, even if a false invoice is not easy to find out.
9、 What are the legal risks of false Invoicing?
The current measures for invoice management, criminal law, amendments and relevant judicial interpretations all take the behavior of falsely issuing (illegally issuing) invoices, especially the special invoices for value-added tax and the invoices that can be used for export tax refund and tax deduction as the object of punishment. The specific penalties are:
1. Confiscate the illegal income.
2. If the false opening amount is less than 10000 yuan, a fine of less than 50000 yuan may be imposed; if the false opening amount is more than 10000 yuan, a fine of more than 50000 yuan but less than 500000 yuan shall be imposed.
If the amount is large, criminal responsibility should also be borne. Depending on the amount, the penalty shall be one to three years or more directly.
10、 How does the focus respond to external questions?
For whether to cooperate with Ruixing to falsely increase advertising expenditure, falsely issue invoices, and whether there is bad debt situation, some investors asked the focus.
In response to this query from investors, focus said that as the advertising media, the company does not involve the internal governance of its customers. At the same time, the company calculates the company’s operating income and other financial data in strict accordance with the accounting law, accounting standards for business enterprises and other relevant laws and regulations, and normative documents, which truly, accurately and completely reflects the actual business situation of the company.
Asked about the influence of Ruixing, focus said that at present, the company’s customer structure is diversified, and a single advertiser will not have a significant impact on the company. Thank you for your attention.
Fenzhong also said that the current advertising collection process of Ruixing coffee and Shenzhou car rental is normal.
Deleting Lu Zhengyao’s message can be understood as not wanting the outside world to “see the focus as the key to the success of Shenzhou and Ruixing, as well as close partners”. Then deleting the three words “Lu Zhengyao” behind the chairman of Shenzhou car rental company, just keeping the “discovery of chairman of Shenzhou car rental company”, is a bit too sensitive.
What are the people afraid of?
(statement: This article only represents the author’s point of view, not Sina’s position.)