Chinese conglomerate Reward, whose CEO Hu Keqin had ambitious plans to open 1,500 bakeries in China using flour produced on swathes of French land that he snapped up, has gone bankrupt according to court documents.
Beijing’s Chaoyang District Court on May 13 accepted an application to go into receivership filed by Hu’s group, according to a June 2 notice on the national bankruptcy register.
The Beijing-based group, which originally specialised in infant formula and cleaning products, has triggered debate in France about land grabs with its large purchases of agricultural land in recent years.
In an interview with AFP last year, Hu said he had bought about 3,000 hectares in France since 2014 and planned to open 1,500 bakeries in China in five years, supplied with French flour.
In 2017 Reward also took control of a lavender soap maker in the south of France, Le Chatelard 1802.
Reward also owns a cosmetics factory in the United States.
Despite Hu’s dream of conquering China with baguettes, it only opened three Chez Blandine bakeries in Beijing, and they have already closed, according to Dianping.com, the go-to reference site for shopping and services in China.
The notice published online said a shareholders’ meeting at the end of December had approved a request to file for bankruptcy.
According to its balance sheet at the end of December, Reward (known as Luowa in Chinese) still had more assets than liabilities – more than 11 billion yuan against six billion (or S$2.16 billion against S$1.18 billion).
But the group explained it had insufficient cash and its assets were difficult to sell.
The company could not be reached for comment.
Credit ratings agency Fitch announced last year that Reward had been unable to pay a debt of 300 million yuan in early December, while at the end of September it assured that it had 4.15 billion in cash.
Fitch lamented the lack of transparency surrounding the accounts of Chinese firms, the non-publication of “relevant” information and notoriously incomplete audits.
Beijing has since announced a tightening of corporate debt control.
And in France, where Hu used legal loopholes to skirt rules that can allow the government to block sales of farmland, President Emmanuel Macron has vowed to crack down on foreign investors buying up agricultural land.