💼 Brief Take: China’s Battle of the Chops
In the age of AI, offshore creditors still find themselves at the mercy of the good old chop.
Four offshore lenders to Guangzhou R&F struggled to seize the loan collateral as the Chinese developer’s founder withheld a key company seal.
Enforcement challenges are also common in Indonesia, where ousted company executives may prefer the use of muscles to resist management changes.
Four overseas lenders are facing an uphill battle to recover more than USD 600 million from a Chinese company that was once part of property developer Guangzhou R&F Properties, after the latter’s chairman withheld its seal to prevent the lenders from removing him as legal representative, IFR reported on 23 September 2025.
Eveline’s Take:
✒️ In an age when AI is transforming industries by leaps and bounds, offshore creditors still find themselves at the mercy of the good old chop.
✒️ In September 2024, Hammer Capital Opportunities Investment, Seatown Private Credit Master Fund, Knight Prosper and CC Land’s chairman Cheung Chung Kiu appointed receivers to take over the loan collateral owned by Guangzhou Trillion Glory Investment, consisting of 68 hotels and a commercial building in the Chinese city of Dalian, IFR reported. Guangzhou R&F held an indirect stake in Guangzhou Trillion Glory.
✒️ However, Guangzhou R&F’s chairman and founder, Li Sze Lim, did not hand over the company seal that was required to change the legal representative of Guangzhou Trillion Glory, according to IFR. Guangzhou R&F also initiated asset preservation proceedings onshore to seize Guangzhou Trillion Glory’s assets.
✒️ While Hong Kong-listed Guangzhou R&F was reportedly the borrower, the collateral was in the hands of Guangzhou Trillion Glory, which was incorporated in mainland China – and this is the battleground where the offshore lenders were thwarted from enforcing their security. Furthermore, Guangzhou Trillion Glory had reportedly pledged the same security for onshore bank loans and these domestic lenders also made a move for the assets.
✒️ The battle of the chops has played out elsewhere. In May 2016, China Shanshui Cement Group announced that the interest on its 2017 notes could not be distributed to bondholders because it did not have the seal of its main operating subsidiary, Shandong Shanshui Cement Group, Bloomberg reported.
✒️ China Shanshui – which struggled to take control of the cement maker’s mainland operations from founder Zhang Caikui – had previously obtained all seals except the one at Shandong Shanshui. The seals were held by the ousted directors, who allegedly brought in gangsters to help them, according to Bloomberg.
✒️ Enforcement challenges are also common in Indonesia, where ousted company executives may prefer the use of muscles to resist management changes. In May 2015, the former CEO of Asia Resource Minerals, Amir Sambodo, staged a sit-in at the Jakarta office of Indonesian operating company Berau Coal Energy and hired more than 100 security guards, the Financial Times reported.
✒️ Despite the technological and financial advancement over the years, investors can still be repelled by something as quaint as chops and bouncers.