According to the news on the website of the Standing Committee of Xinyu Municipal People's Congress, on July 12, the Standing Committee of Xinyu Municipal People's Congress held its seventh meeting, "the meeting reviewed and approved the proposal of the municipal people's government to include the gap fund of Jiangxi Saiwei LDK Company's repayment of trust loans to Huarong International Trust Co., Ltd. into the annual financial budget of the same period". According to the 2010 annual report of Saiwei, as of the end of the year, the loan balance obtained by Saiwei from Huarong Trust was 755 million yuan. The resolution of Xinyu National People's Congress means that the local government will officially use financial funds to cover the trust loan owed by Saiwei.

Why did the local government pay out of its own pocket to save Savi? Perhaps in the view of the local government, Saiwei has reached the point of "too big to fail". On July 13, Fortune Chinese released the 2012 Top 500 list of Chinese enterprises, and Savi was again included in the list, ranking 266, which is one of the few companies on the list from Jiangxi. Although Saiwei is a private enterprise, it is regarded as a "treasure" by Jiangxi Province and Xinyu City because of its strategic emerging industry attribute and rapid expansion scale.

So, does the local government have the right to use financial funds to repay debts for a private enterprise? Is this legal and compliant? Shi Wenwen, director of the Finance and Tax Law Research Center of China University of Political Science and Law, said that according to the current laws and regulations, local governments can use financial funds to repay debts for enterprises under two circumstances after the approval of the National People's Congress. One is to repay the debts of local financing platforms; Second, there are state-owned shares of the government in the enterprise. Therefore, for Saiwei, which is neither a financing platform nor a state-owned equity, why should the government use financial funds to cover its trust loans? [Let me comment]

According to the annual report, Saiwei achieved an operating revenue of 13.93 billion yuan last year, a year-on-year decrease of 15.18%; The net loss reached 5.49 billion yuan. In fact, the profitability of Savi is not stable. In 2010, the company had a net profit of 1.747 billion yuan, but in 2009, it had a net loss of 1.642 billion yuan. What is more striking is the heavy debts. By the end of 2011, the total liabilities of Savi had reached 30.23 billion yuan, which put great pressure on short-term debt repayment.

The debt black hole of Savi is not only that. According to its 2010 annual report in English, as of the end of 2010, the long-term debt, in addition to the 755 million yuan of trust loans of Huarong Trust, also includes loans from many financial institutions, the largest amount of which is China Development Bank, including 1.505 billion yuan of mortgage loans and 300 million yuan of credit loans, totaling 1.805 billion yuan; The second is SPDB, which provided 1.51 billion yuan of unsecured credit loans; CCB has invested 547 million yuan in mortgage loans and 876 million yuan in credit loans, totaling 1.423 billion yuan. In addition, Huishang Bank, the only urban commercial bank in Anhui Province, is also involved, with a loan amount of 755 million yuan, all of which are provided in an unsecured manner.

In the face of such heavy liabilities, Xinyu government does not know whether it has considered the risk when covering the loan for Savi Trust? I remember many years ago when Delong was in crisis, the government of Xinjiang Autonomous Region used government finance and government credit to provide support and guarantee for it, so that it could obtain financial subsidies and low interest bank credit. In the end, Delong still collapsed, and the over 100 million backing fund was also lost. Maybe it's all taxpayers' money, and the local government doesn't care about it. [Let me comment]

Although the overall photovoltaic industry is in a depressed environment at present, many people believe that the reason why Savi fell into today's dilemma is related to the huge investment in polysilicon projects, expansion of downstream PV production chain and investigation of the whole industry chain model. It can be said that Savi's current predicament is the result of his founder's "gambling" character. Saiwei dug a hole for itself and expanded its production capacity by 18 times in less than four years. The fabulous development speed finally led to the tension of the capital chain. But will taxpayers pay for the bitter consequences of Savi?

Judging from the current situation, the prospects of the photovoltaic industry are still not good, and the losses are far from bottoming out. The financial report shows that in the first quarter of this year, the asset liability ratio of Jiangxi Saiwei was 87.1%, and the net profit was - 354 million yuan. Under such circumstances, is Xinyu government ready to go on like this for Saiwei? Taxpayer's money has been given to Saiwei. Can Saiwei be responsible for old-age care, medical care, water supply and road construction? What if Savi is a bottomless pit?

Why is the government so interested in rescuing enterprises when it doesn't do what the government does? It is reasonable for public resources to save state-owned enterprises, but there is no reason to save private enterprises. Is there rent-seeking? Financial funds are used to provide public services, not to develop an enterprise. Just because it pays more taxes and has more jobs, the government will pay for its debts, which is tantamount to blurring the boundary between the government and the enterprise. It is absolutely not allowed. [Let me comment]