FGI owner Liu says in a video that property in the U.S. will be sold to support a business in China

Dan Liu, an owner of the Chinese-funded Founders Group International, said in April that the 22 Grand Strand golf courses and numerous other properties and businesses that FGI has purchased in the past 20 months are not at risk because of a financial problem encountered by another company he is affiliated with in China.

But both a video posted in China last month featuring Liu and an internet letter posted on the Yiqian company website last month that have been acquired by The Sun News imply otherwise.

Liu said in an interview with The Sun News on April 20 that he was solely a paid advisor to the Chinese peer-to-peer (P2P) lending company Yiqian Funding, which has had at least one branch office raided and shut down by authorities, who Liu confirmed froze assets of the branch in early April.

But in a video dated April 14 that attempts to allay possible concerns of investors in Yiqian, Liu introduces himself as the Yiqian chairman of the board and states he is going to the United States to sell property to relieve the monetary shortage.

A letter posted on the Yiqian website in mid-April goes into further detail, naming Founders Group as a company with holdings in America, and reiterating that property in the U.S. will be sold to pay investors.

A search of property records in Horry and Georgetown counties did not reveal any FGI property sold through Thursday.

Liu contended in April that Yiqian Funding, which does business in China under both its Mandarin name and the English name “Easy Richness,” was not involved in any Grand Strand properties owned by FGI or affiliated companies because there were no common executives or owners. He was the primary connection, he said, and he was solely an advisor to Yiqian, and had been since its founding in 2010.

Liu further explained that he was a co-founder in 2009 of Jiang Su Tian Rui, a foreign trade and investment company that has just one other wealthy partner and has been the source of the FGI purchases. Liu is listed as the company's legal representative on 2009 incorporation papers, according to Chinese government online records, and Tian Rui is listed on the sales agreements of some Strand properties.

Liu said last month that all of the approximate 300 Yiqian branch offices were operating normally, with the lone exception being an office in the Shaoxing area of the Zhejiang province that was inspected and closed.

He said computers and some paperwork were seized by police, and some employees were taken for questioning.

Several Chinese publications and websites have stories claiming Yiqian has been under suspicion of fraudulent business practices. Liu said the company has done nothing illegal that he is aware of, competitors have been fabricating stories of the alleged fraud, and Yiqian was the target of a blackmail attempt.

P2P companies are part of the nontraditional lending market known as the shadow banking industry in China, which has flourished over the past few years but has also come under increased scrutiny by Chinese officials who believe the industry could damage the economy if left unregulated.

P2P companies provide money to borrowers and act as an intermediary between the borrower and either individual or institutional investors hoping to make a profit on the loans. The P2P businesses connect the two online. The third-party investors take on the loan risk, though borrowers only interact with the P2P companies for acquisition and repayment of the loan.

The letter posted on the Yiqian website in mid-April states that because of the actions of a few employees, the local police in the Zhejiang province began an investigation that led to part of Yiqian’s assets being frozen. It states that two offices including one in Nanjing, where Yiqian is headquartered, are embroiled in the investigation.

It continued that the frozen funds have kept some clients from retrieving their invested money, so Jiang Su Tian Rui will guarantee Yiqian’s financing and will acquire it. It states Tian Rui is the parent company of Founders Group in America and Tian Rui will sell part of it’s American properties, which it values at $1.2 billion U.S. dollars in the letter, and Yiqian will sell holdings in China worth $750 million to pay investors.

The letter states that Tian Rui will purchase Yiqian and management is being reorganized, as past Yiqian president Shen Jia and vice president Huang Yiren have been fired, and new president Cao Jianrong and acting president Wang Sihai have been appointed. A small committee will be established to focus on monetary issues and will report its work to the media and public, and an accounting firm, law firm and investors will be consulted to assist in the payback plan.

The letter states Yiqian invites the government to monitor its activity and implores investors to trust them, be patient and not overreact, and Tian Rui promises to start paying back investors once the frozen account is unfrozen, with all payments completed no later than March 31, 2018.

The letter concludes that the crisis is not caused by company mismanagement, the company has never missed a payment in the past, and following the reorganization clients won’t lose a single penny.

Founders Group International or affiliated companies purchased 22 courses between September 2014 and April 2015, as well as the Prime Times golf membership program, tee time call center, two golf package companies and a few popular golf- and tourism-related websites.

FGI investors purchased 29.1 acres of Myrtle Beach oceanfront property from Grande Dunes owner LStar Communities in January for $25.6 million, according to Horry County records, and a luxury high-rise hotel is a probability for the property.

FGI or subsidiary companies also own more than 300 acres of undeveloped land at Wild Wing Plantation, TPC Myrtle Beach and International World Tour Golf Links; 200 lots at Wild Wing; the fledgling 80-resident multifamily Stonewall Villas development in Longs; and other tracts. FGI partner Xian “Nick” Dou said all of the purchases are debt-free.

FGI is creating a real estate division to market and sell some of the non-course property it has acquired.