Core Viewpoint - The downfall of He Qi, the former richest man in Changle, Fujian, and the collapse of Junhe Holdings, a steel trading giant, due to financial fraud and tightening regulations [2][4][14]. Company Overview - He Qi, aged 43, founded Junhe Holdings, which had branches in several provinces and was a significant player in steel trading and finance [4]. - In 2019, Junhe Holdings entered the top 500 private enterprises in China, with He Qi's personal wealth exceeding 8 billion yuan [4]. - By 2024, Junhe claimed revenues of 250 billion yuan, ranking highly among private enterprises in Shanghai and Fujian [4]. Business Practices - Initially, Junhe operated as a steel agent, earning small profits through wholesale trading [6]. - The company later engaged in fraudulent practices by inflating revenues through partnerships with local investment companies, allowing them to issue bonds based on inflated financials [10][12]. - Junhe's revenue was artificially boosted, leading to increased bank credit and a false image of being a trade giant [10]. Expansion and Diversification - Following initial success with fraudulent practices, Junhe expanded into the financial sector, investing in banks and securities [12]. - The company developed the "Junhe Cloud Valley" industrial park to create a closed-loop ecosystem for its steel products, further inflating its financial statements [12][14]. Regulatory Backlash - In 2023, the State-owned Assets Supervision and Administration Commission began cracking down on fraudulent trade practices, leading to the exposure of Junhe's inflated trade figures [14]. - By November 2024, Junhe faced significant public backlash due to legal issues related to its industrial park, culminating in He Qi's disappearance and the exposure of offshore trust accounts [14][16]. Impact on the Industry - The fallout from Junhe's collapse affected local investment companies across 17 provinces, with significant debt exposure [16]. - The once-prominent "trade empire" of Junhe has now become a cautionary tale within the industry [16].