Tianhong fully reports Green City, and the regulatory agency has it on record? How many secrets are hidden in this dispute

Ask AI · Shenyang National Games Village empty shell with losses, what is the deeper meaning behind Green City choosing to cooperate with it?

Tianhong Real Estate stated that it has submitted comprehensive reports against Green City to the Hong Kong Stock Exchange, the Hong Kong Securities and Futures Commission, and the Hong Kong Financial Secretary’s Office.

Investment Time Network, Punctuation Finance researcher Zhou Yunxun

Why use a loss-making shell company to impersonate Green City China for signing cooperation? Is the funding path suspected of off-balance-sheet operations and fund transfers? Is the company information disclosure non-compliant?

On March 31, 2026, Tianhong Real Estate Development Co., Ltd. (hereinafter referred to as Tianhong Real Estate) reported that a media communication meeting regarding Green City China Holdings Limited (03900.HK, hereinafter referred to as Green City China) was held in Beijing. At the meeting, Tianhong Real Estate pointed out the three core issues of this report with the above three questions.

According to on-site information obtained by Investment Time Network and Punctuation Finance researcher, Tianhong Real Estate Chairman Wei Guoqiu accused Green City of deliberately avoiding its listed company entity, forcibly arranging Tianhong Real Estate to sign with Shenyang National Games Village Construction Co., Ltd. (hereinafter referred to as Shenyang National Games Village), a company with no equity relation, as the signing party. The core purpose is to deceive Tianhong into ceding project decision-making rights, and then through related parties, embezzle project profits.

Tianhong Real Estate stated that it has sent a risk warning letter and relevant evidence to Ernst & Young, and submitted a comprehensive report to the Hong Kong Stock Exchange, the Hong Kong Securities and Futures Commission, and the Hong Kong Financial Secretary’s Office, which has now been recorded by regulatory authorities.

Notably, on the same day, Green City China also released its 2025 annual performance report. Data shows that in 2025, Green City China achieved revenue of approximately 154.97B RMB, a decrease of 2.26% year-on-year; net profit attributable to shareholders was 70.99M RMB, down 95.55% year-on-year.

The announcement states that the decline in revenue and net profit attributable to shareholders is mainly due to the real estate market still being in a period of adjustment, and to promote long-term development, the company continued to actively promote the destocking of long-term inventory, leading to a decrease in gross profit margin of revenue recognized in 2025 and performance of joint ventures and associates. Additionally, the company made asset impairment and fair value change losses totaling 4.92B RMB in 2025, which affected net profit attributable to shareholders.

Looking back, the two companies initially joined hands with beautiful visions, hoping to leverage Tianhong Real Estate’s local resources and Green City China’s brand and operational advantages to achieve a win-win situation. But now, this nearly seven-year cooperation has not only failed to meet expectations but has evolved into a legal stalemate. Why did this happen?

“Financing + Construction Agency” Suspected of Interest Transfer?

In 2019, the real estate market was still in a stable development phase, and the agency construction business of leading real estate companies was gradually becoming a new profit growth point. In December of the same year, Tianhong Real Estate reached a cooperation agreement with Green City to develop the “Green City Guiyu Jiangnan” project in Tangshan.

The project company is called Tangshan Hongke Real Estate Development Co., Ltd. (hereinafter referred to as Hongke Company), in which Tianhong Real Estate holds 90%, and Shenyang National Games Village holds 10%. According to the agreement, Green City China’s subsidiary, Green City Management Holdings Limited, is responsible for agency construction and sales, providing branding and management experience; at the same time, with Shenyang National Games Village as the main body, it provides a loan of 600 million RMB at an annual interest rate of 16%, which is a necessary condition for the cooperation to take effect.

For Tianhong Real Estate, choosing to cooperate with Green City was not only because of its brand influence but also because of the capital support brought by the “financing + agency construction” model.

However, unexpectedly, from 2020 to 2021, the sales performance of the relevant project fell far short of expectations. Tianhong Real Estate disclosed that over two years, the project’s sales collection rate was less than 5%, with a repayment amount of about 94 million RMB, far from Green City’s promised 2.1 billion RMB. This raised doubts for Tianhong Real Estate—what exactly happened?

After layers of investigation, Tianhong Real Estate generally believes that the core purpose of Green City’s cooperation is not agency construction but profit from high-interest loans.

Wei Guoqiu pointed out that Green City China does not hold a financial license but makes loans a prerequisite for cooperation, which is essentially illegal lending. Of the 600 million RMB loan provided by Shenyang National Games Village, 500 million RMB came from Green City China’s financial division, injected into Shenyang National Games Village through an affiliated company without interest, and then lent at high interest to Tianhong Real Estate, suspected of interest transfer.

In response, Green City firmly denied this, emphasizing that the company and its subsidiaries operate legally and compliantly, with no illegal lending. Shenyang National Games Village has no direct equity relationship with Green City China; their cooperation is a normal commercial agency construction. The agency team is only responsible for project management and does not undertake sales performance commitments. Poor project sales are due to market environment changes and Tianhong Real Estate’s operational issues.

However, Tianhong believes that Green City China led the design of the overall cooperation model of the involved contract, with detailed arrangements of rights, obligations, and注意事项 for all parties. The entire cooperation is primarily financed, with Green City Management Group’s agency construction as a risk control measure. Moreover, Green City Management Group invested 100 million RMB as subordinated funds. Green City Management Group is not only an agent for construction but also a deeply involved participant according to arrangements by Green City Real Estate, bearing responsibilities beyond mere construction.

Hongke Company’s Equity Structure

Source: Wind

The Role of Shenyang National Games Village

Additionally, the company status of Shenyang National Games Village is a key point Tianhong Real Estate is particularly concerned about.

According to Wei Guoqiu, this cooperation adopts a “dual-entity signing” model, separating financing and agency construction, with different companies signing with Hongke Company. The specific plan is for Shenyang National Games Village to sign an investment cooperation agreement with Hongke, and by dispatching representatives to serve as executive directors of Hongke, it gains daily decision-making rights; Green City Management Holdings Limited signs an agency construction cooperation agreement with Hongke to undertake related project construction.

Shenyang National Games Village is responsible for financing and controlling decision-making, while Green City Management handles agency construction and operation. This model causes Tianhong Real Estate to lose project voice.

Why does the shareholder holding 90% in the joint venture have no project decision-making power? Wei Guoqiu explained, “Green City has a good reputation in the real estate industry, plus the brand of a listed company, and its senior management is stationed there. We believed this dual guarantee could greatly enhance project quality.”

But in fact, Shenyang National Games Village has no direct equity relationship with Green City China, which greatly undermines Tianhong Real Estate’s trust in the basis of cooperation relying on Green City China’s brand and strength.

Public information shows that Shenyang National Games Village was established in 2011 with a registered capital of 288 million USD. The legal representative is Bai Xiaochun. Its business scope includes real estate development, commercial housing sales; self-owned property leasing, property management, property services; hotel management; engineering cost consulting; construction supervision; landscaping, municipal engineering, architectural design and construction.

Reviewing Wind’s data on equity penetration, the company is wholly owned by Guangwei Group Co., Ltd., a private company registered in Hong Kong.

Although there is no direct equity link, Green City China’s founder Song Weiping, Executive Director and Vice President Li Jun, and Zhongyuan Regional General Manager Jiang Han all have served as legal representatives of this company, leading industry insiders to regard it as an “affiliate of the Green City system.”

Wei Guoqiu stated, “The entire project approval process is conducted within Green City’s OA system, with final approval by Green City personnel. Moreover, Green City was aware that Shenyang National Games Village was operating at a loss, with no own funds, no personnel, and no operational capacity, yet still designated it as the investment cooperation entity. According to Article 21 of the General Principles of the Civil Code, deliberately concealing the true situation, causing parties to make decisions based on mistaken understanding, can be considered fraud. Green City China concealed the true situation of Shenyang National Games Village to induce Tianhong Real Estate to sign the contract, which raises serious doubts and may constitute contractual fraud.”

Basic Information of Shenyang National Games Village

Data source: Wind

Litigation Continues

In fact, since 2022, both parties have engaged in multiple rounds of judicial litigation over the cooperation dispute.

In February 2022, Tianhong Real Estate sued Green City China and Green City Management Group, claiming that their cooperation involved “financing + agency construction + company control.” The case is currently in second instance at Hebei High Court.

In April of the same year, Shenyang National Games Village filed a lawsuit with the Shenyang Intermediate People’s Court, alleging that Tianhong Real Estate and Hongke violated the “Investment Cooperation Agreement.” The Shenyang High Court has remanded the case for retrial, explicitly requiring a new judgment based on the findings of the entrusted agency construction dispute. No final conclusion has been reached so far.

The ongoing legal tug-of-war not only consumes significant human, material, and financial resources from both sides but also severely impacts the companies’ brand images.

Latest reports indicate that Tianhong Real Estate has submitted comprehensive reports against Green City to the Hong Kong Stock Exchange, the Hong Kong Securities and Futures Commission, and the Hong Kong Financial Secretary’s Office. It has also issued risk alerts to Ernst & Young regarding this cooperation dispute, recommending a comprehensive audit of related funds, rights and responsibilities, and potential losses.

It is evident that complex cooperation models like Tianhong and Green City, which integrate “project governance + financing + agency construction,” are prone to issues and risks in areas such as rights and responsibilities,利益诉求, risk transmission, and communication due to differing goals and positions. According to relevant provisions of the “Interpretation of the Supreme People’s Court on the Application of Law in the Trial of Disputes over Contracts for State-owned Land Use Rights,” such cooperation models need to clarify whether they constitute genuine development cooperation. If one party only receives fixed income without bearing operational risks, the contract might be reclassified as land use rights transfer, loan, or other types, affecting its legal validity.

As of now, the relevant cases are still under trial, and subsequent developments continue to attract market attention.

Author’s statement: Personal opinions only, for reference.