**Shanghai Zhonglu Group, founded by 'first Rolls-Royce owner' Chen Rong, ordered into bankruptcy liquidation**
A Shanghai court has ordered the bankruptcy liquidation of Shanghai Zhonglu Group, the controlling shareholder of ST Zhonglu, after creditor Shanghai He Di Investment Center filed a petition citing unpaid debts. Founded in 1998 by Chen Rong, known as the owner of Shanghai's first Rolls-Royce, the group's stake in ST Zhonglu has fallen from nearly 40% to 6.79% since its debt crisis began in 2020. Separately, regulators found Chen Rong and related parties occupied 12.48 million yuan of ST Zhonglu funds, of which 7.98 million yuan remains unrepaid.
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Common ground
- Both sides agree that Chen Rong's personal wealth and the Rolls-Royce story are distractions from the real issue of corporate governance failure at ST Zhonglu.
- Both agree that the 12.48 million yuan fund misappropriation through a 99%-owned subsidiary is a serious problem that should have been caught earlier.
- Both agree that Chen Rong is facing real personal consequences, including bankruptcy liquidation and public humiliation.
- Both agree that minority shareholders are the main victims, as their stake dropped from 38.88% to 6.79% while cash was being siphoned.
Points of contention
- The Neutral Agent argues the 17-month detection gap shows a governance failure, while the Eastern Agent says it's normal for any system and the independent directors catching it proves the system works.
- The Neutral Agent says regulators were reactive, not proactive, and only acted after the board flagged the issue, while the Eastern Agent says that's how all mature regulators operate.
- The Eastern Agent frames this as a success of China's regulatory system, while the Neutral Agent says it's a failure of prevention that could happen anywhere.
- The Neutral Agent dismisses comparisons to Madoff and Wirecard as false equivalence, while the Eastern Agent uses them to argue that no system is perfect and China's response was faster.
Blind spots
- Both sides focus on the 12.48 million yuan figure but ignore the possibility that larger hidden transactions through offshore entities or shell companies may exist.
- Neither side addresses whether the independent directors themselves had any conflicts of interest or were truly independent from the controlling shareholder.
- The debate overlooks the role of the external auditor who signed off on the 2024 annual audit despite the suspicious payments through a 99%-owned subsidiary.
- Both sides fail to discuss what specific legal recourse minority shareholders actually have in the bankruptcy process and how likely they are to recover any money.
WorldAttention’s read
This debate boils down to a fundamental disagreement about what makes a financial system work. The Neutral Agent sees the 17-month gap between the start of fund misappropriation and its detection by independent directors as a clear governance failure, especially since a 99%-owned subsidiary funneling cash through fake consulting fees should have been caught in any competent quarterly audit. The Eastern Agent argues that no regulator anywhere catches everything in real time, and the fact that the independent directors flagged the issue and regulators acted within weeks shows the system's checks and balances functioning as designed. Both sides agree that Chen Rong is facing real personal consequences and that minority shareholders are the main victims, but they disagree sharply on whether this case proves China's regulatory system is maturing or just cleaning up after a failure. The geopolitical framing from the Eastern Agent and the false equivalence accusations from the Neutral Agent both distract from the practical question: how did a 99%-owned subsidiary drain cash for 17 months without detection, and what will minority shareholders actually recover? The real blind spot is that neither side addresses the role of the external auditor who signed off on the 2024 annual audit, nor the possibility that the 12.48 million yuan is just the tip of a larger iceberg that bankruptcy proceedings may reveal.
Reporting timeline
Shanghai's First Rolls-Royce Owner's Core Investment Platform Enters Bankruptcy Proceedings
According to a report by Securities Times, ST Zhonglu (600818) disclosed on the evening of September 23 that its controlling shareholder, Shanghai Zhonglu (Group) Co., Ltd. (Zhonglu Group), had its bankruptcy liquidation application accepted by a court. The application was filed by Shanghai He Di Investment Center (Limited Partnership) on the grounds that Zhonglu Group is unable to repay due debts and lacks solvency. Zhonglu Group, founded in 1998 by Chen Rong, who was famously dubbed the owner of 'Shanghai's first Rolls-Royce' after making a fortune in the stock market, has investments spanning finance, biotech, and manufacturing. ST Zhonglu, which owns the 'Forever' bicycle brand, faces delisting risk if its 2026 internal control audit opinion remains adverse. Separately, the Shanghai Stock Exchange criticized ST Zhonglu, Chen Rong, and others for related-party fund occupation of 12.48 million yuan, of which 7.98 million remains unpaid. The company's independent directors have called an emergency board meeting to recover the funds.
Read sourceShanghai's first Rolls-Royce owner's core investment platform enters bankruptcy proceedings
Shanghai Zhonglu Group, the controlling shareholder of ST Zhonglu (600818), has been ordered into bankruptcy liquidation by a Shanghai court, according to a September 23 company filing. The petition was filed by creditor Shanghai Hedi Investment Center, citing Zhonglu Group's inability to repay debts. Zhonglu Group was founded in 1998 by Chen Rong, who gained fame in the early 1990s by turning a $1.2 million investment into $12 million in 38 days during a market downturn, and was later dubbed the owner of 'Shanghai's first Rolls-Royce.' The group holds stakes in finance, biotech, and manufacturing. Separately, ST Zhonglu faces delisting risk after a negative internal control audit opinion in 2025. The Shanghai Stock Exchange recently criticized the company, its controlling shareholder, and executives for a related-party fund diversion of 12.48 million yuan between February 2024 and June 2025, of which 7.98 million yuan remains unrepaid. Independent directors have called an emergency board meeting to recover the funds.
Read sourceShanghai's first Rolls-Royce owner's investment platform Zhonglu Group enters bankruptcy liquidation
Shanghai Zhonglu (Group) Co., Ltd., the investment platform founded in 1998 by Chen Rong, known as the owner of Shanghai's first Rolls-Royce, has been ordered by a Shanghai court to enter bankruptcy liquidation. The ruling, issued on September 23, 2025, follows a petition by creditor Shanghai Heji Investment Center over unpaid debts. Zhonglu Group, the controlling shareholder of ST Zhonglu (600818), has seen its stake in the listed company plummet from nearly 40% in early 2021 to 6.79% as of June 2025, due to multiple rounds of judicial auctions and forced sales since its debt crisis emerged in 2020. The company's debt problems, including 8.32 billion yuan in overdue interest-bearing debt, led to all its bank accounts being frozen. Additionally, the Shanghai Securities Regulatory Bureau found that Chen Rong and related parties had non-operationally occupied 12.48 million yuan of ST Zhonglu's funds between 2024 and 2025. The company has recovered 4.5 million yuan of the occupied funds, but the remaining amount and a share repurchase commitment from Chen Rong are now subject to significant uncertainty due to the bankruptcy proceedings.
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Shanghai's First Rolls-Royce Owner's Investment Platform Declared Bankrupt; Stake in A-Share Company Drops Sharply
Shanghai Zhonglu Group Co., Ltd., the controlling shareholder of ST Zhonglu (600818), has been declared bankrupt by a Shanghai court, according to a September 23 announcement. The investment platform was founded in 1998 by Chen Rong, known as the first Rolls-Royce owner in Shanghai. Chen Rong gained fame in 1994 by turning $1.2 million into $12 million in 38 days during a market bottom. Zhonglu Group's debt problems emerged in 2020, with its stake in ST Zhonglu falling from nearly 40% to 6.79% as of June 2025. The court accepted a bankruptcy liquidation petition from Shanghai He Di Investment Center. The company stated the event will not significantly affect normal operations but poses a risk of change in actual control. Additionally, the Shanghai Securities Regulatory Bureau found that Chen Rong and related parties occupied 12.48 million yuan of listed company funds from February 2024 to June 2025 without disclosure. ST Zhonglu has recovered 4.5 million yuan of the occupied funds, but the recovery of the remaining amount and fulfillment of a share repurchase commitment are highly uncertain.
Read sourceShanghai's First Rolls-Royce Owner's Investment Platform Faces Bankruptcy; Stake in A-Share Firm Drops Sharply
Shanghai Zhonglu Group, the investment platform founded in 1998 by Chen Rong, known as the first Rolls-Royce owner in Shanghai, has been ordered into bankruptcy liquidation by a Shanghai court. The petition was filed by creditor Shanghai Heji Investment Center due to Zhonglu's inability to repay debts. Zhonglu's stake in its listed subsidiary, ST Zhonglu, has fallen from nearly 40% in early 2021 to 6.79% as of June 2025, following years of judicial auctions and forced share reductions. The debt crisis emerged in 2020, with over 832 million yuan in defaulted interest-bearing debt. Additionally, the Shanghai Securities Regulatory Bureau found that Chen Rong and related parties had non-operationally occupied 12.48 million yuan of listed company funds between February 2024 and June 2025, of which only 4.5 million yuan has been recovered. ST Zhonglu warned that the bankruptcy creates significant uncertainty over recovering the remaining funds and fulfilling a share repurchase agreement. The company faces a potential change in controlling shareholder.
Read sourceShanghai's First Rolls-Royce Owner's Core Investment Platform Files for Bankruptcy; Stake in A-Share Firm Drops Sharply
ST Zhonglu (600818) disclosed on September 23 that its controlling shareholder, Shanghai Zhonglu Group, has been declared bankrupt by a Shanghai court. Zhonglu Group, founded in 1998 by Chen Rong—known as the first Rolls-Royce owner in Shanghai—has seen its stake in the listed company fall from nearly 40% to 6.79% since debt issues emerged in 2020. The bankruptcy petition was filed by creditor Shanghai Heji Investment Center. As of June, Zhonglu Group held 21.8383 million shares (6.79%) of ST Zhonglu. The company stated the bankruptcy will not significantly affect normal operations but poses a risk of change in actual control. Chen Rong, a former factory worker who made a fortune in the stock market in the 1990s, built Zhonglu Group into a diversified investment platform. The group's debt crisis began in 2020, leading to multiple judicial auctions of its shares. Additionally, the Shanghai Securities Regulatory Bureau found that Chen Rong and related parties had non-operationally occupied 12.48 million yuan of listed company funds between February 2024 and June 2025, of which 4.5 million yuan has been recovered. The company warned that full recovery of the remaining funds and fulfillment of a share repurchase commitment are highly uncertain.
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