(Yicai) April 3 -- China’s financial regulator has approved the bankruptcy reorganization plan of Sichuan Trust, which would allow the Chinese financial institution to continue to exist and keep its license if approved.

Sichuan Tianfu Chunxiao Enterprise Management, backed by the State-Owned Assets Supervision and Administration Commission of Sichuan Province, will purchase trust beneficiary rights of Sichuan Trust from investors at a 20 percent to 60 percent discount, according to the bankruptcy reorganization plan approved by the Sichuan province branch of the National Administration of Financial Regulation on April 1.

Some 8,055 individual investors, equal to 95 percent of the Sichuan Trust’s total, had signed the bankruptcy reorganization plan issued on Dec. 25 last year before Feb. 26, according to the Chengdu-based company’s latest announcement. The deadline to enter the agreement was March 5.

However, Sichuan Trust’s bankruptcy reorganization plan is still awaiting a court ruling.

The strengths of this restructuring plan are the reliability of the investor and the fact that it satisfies all parties, a member of the legal profession told Yicai.

In December 2020, the financial regulators ordered four shareholders of Sichuan Trust who had illegally used some of the company’s fixed loans and trust funds, including Hongda Group and Sichuan Haoji Food, to return the money. Afterward, embezzled Sichuan Trust launched a risk disposal procedure.

Sichuan Trust is China’s second trust firm to go bankrupt since the country enacted the Trust Law and the Law on Enterprise Bankruptcy after New China Trust, which finished the bankruptcy liquidation last May.

Different from New China Trust, Sichuan Trust’s bankruptcy is a reorganization, which would allow Sichuan Trust to continue to exist, together with its trust license.

Sichuan Trust is also the third Chinese trust company after Anxin Trust and Investment, now known as J-Yuan Trust, and NewTimes Trust to have offered to sell investors’ TBRs at a discount.

Editor: Futura Costaglione