[Epoch Times, August 7, 2024] Six months after the Guangzhou Changshi Tea scandal, Pancha Holdings, often referred to as the Hermes of the tea industry, has declared bankruptcy. The tea market has experienced another sudden crash. One of Pancha’s “Yilu Changhong” tea cakes once sold for 120,000 yuan (RMB, same below), with many of its products priced in the tens of thousands of yuan.
Pantea Holdings’ financial crisis has left dealers distressed
According to videos shared by numerous netizens, dozens gathered at the “Guangzhou Pancha R&D Center” demanding repayment from the founder of “Pancha Holdings.”
Recently, Pantea Holdings (Guangzhou) Co., Ltd. issued a “Reorganization Announcement,” stating that due to various rumors, a lack of market stability, and significant fund restrictions, the company was compelled to undergo a debt or equity restructuring, with further details to be released after asset liquidation. Many dealers expressed emotional reactions to this news.
At the end of July, a netizen shared on a social platform that Pancha memberships expiring between the 17th and 19th of the month could not be redeemed. The project owner claimed that both the platform and dealers’ cards were frozen, leading to a 10-day delay in order deliveries. However, the recently announced “debt or equity restructuring plan” dashed the last hopes of investors.
Over the past three years, Pancha had become a “star” in Fangcun, boasting a monthly interest rate exceeding 15%.
Blue Whale News reported that Jiawei from Fangcun, who endured three years in the business, was “put in jail” two months ago. “Initially, I only bought one cake (of tea), but then everyone said it was very stable, that there were no issues before National Day, so I purchased more. The dealers I know lost even more, some losing millions.”
A senior tea shop owner from Fangcun stated that Pancha’s collapse was not unexpected. “This is not genuine Pu’er. It is a capital-driven transaction, and it has been operating for several years. It could collapse at any moment.” He noted that the impact of Pancha’s demise was extensive. “Eighty percent of those around me participated, and many invested millions.”
In December 2023, in Guqiao Tea Street in Fangcun, Guangzhou, a company named “Changshi Tea” found itself at the center of a public upheaval due to a “flash crash” in tea prices, affecting over 500 tea merchants and involving amounts in the hundreds of millions of yuan.
It should be noted that Changshi Tea is not the first “financial tea” enterprise to go bankrupt. In the Fangcun area of Guangzhou alone, tea prices for four different manufacturers, including Cha Youyi and Changshi Tea, plummeted last year.
Similar to “Changshi Tea,” Pancha also expanded aggressively within the tea roasting sector.
The announcement indicates that Pancha Holdings (Guangzhou) Co., Ltd. was established in 2022. In less than two years, the number of offline physical dealers exceeded 500, with an average of one Pancha store opening daily. At its peak, Pancha boasted 119 stores operating simultaneously, setting a new industry record.
The individual behind the Pancha network is Zheng Chaogen from Xiping Town, Anxi County, Fujian Province. He once claimed in a public speech that Pancha aimed to be a luxury brand in China, which is why many of its products were priced very high.
An investor from Zheng Chaogen’s hometown revealed that he once assured his fellow townsmen that “the business is very stable,” leading many to invest based on his word.
Xiping Town is nearly 700 kilometers from Fangcun. Zheng Chaogen successfully ignited a “tea speculation frenzy” in both locations.
According to dealers, one of the tea cakes, Yilu Changhong, was sold for 120,000 yuan each, while many other products were priced in the tens of thousands of yuan. At its peak, Changshi Tea, which has since gone bankrupt, was sold for approximately 30,000 yuan per box (a unit of tea, weighing 357 grams with seven pieces per box), and then for over 70,000 yuan.
Tianyancha APP shows that Zheng Chaogen, chairman of Pancha, is linked to over 10 companies, six of which are still operational. Additionally, Zheng Chaogen and others established Guangzhou Yiqi Brand Management Co., Ltd. in May last year, but the company was deregistered in February this year.
The tales associated with Guangzhou Fangcun and tea invariably involve substantial amounts of money.
In March 2021, the market price of Dayi tea soared. The price for a 2003 “Ban Zhang Six-Star Peacock Green Cake” reached a staggering 65 million yuan each; in 2023, Changshi Tea was linked to over 100 million yuan within just three months. Now the domino effect of financial tea has been felt with “pan-tea” once again.
Why does the tea speculation scam consistently attract large sums of money? Where do investor funds originate?
On platforms such as Douyin and Xiaohongshu, individuals associated with the lending industry claim they can offer relevant lending services.
It is understood that many intermediary agencies specializing in lending services are located near Fangcun, Guangzhou, referred to as the “Wall Street of Tea.” They not only assist “tea speculators” in acquiring “investment funds,” but also provide subsequent loans to those who have experienced failures in tea transactions.
One staff member even claimed that they could provide loans regardless of the purpose, and they were well-known throughout Guangzhou. When asked how they could provide loans so liberally, the individual revealed they had an “acquaintance” who was the bank president.
Reportedly, these intermediary institutions develop loan plans for borrowers based on individual conditions, with most loans categorized as consumer or business loans.
A participant in the “pan-tea incident” mentioned that many surrounding him borrowed money to “speculate in tea.” “Numerous residents from our town took out loans against their shares, and many are in their sixties and seventies.”
Editor in charge: Fang Xiao#
Pantea Holdings: The Rise and Fall of a Tea Empire
[Epoch Times, August 7, 2024] Half a year after the Guangzhou Changshi Tea scandal, Pancha Holdings, known as the Hermes of the tea industry, went bankrupt. The unprecedented overnight crash of the tea market re-emerged, marking a harrowing timeline in the world of tea speculation. One of Pancha’s premium “Yilu Changhong” tea cakes was once sold for an astounding 120,000 yuan (RMB), with many of its products priced in the tens of thousands of yuan.
The Emotional Fallout from Pantea Holdings’ Financial Crisis
Recent on-site videos circulated by netizens captured heart-wrenching scenes as dozens of disappointed investors flocked to the “Guangzhou Pancha R&D Center,” demanding accountability from the company’s founder. The turmoil is palpable, and sentiments are running high among tea dealers.
In a startling “Reorganization Announcement,” Pantea Holdings (Guangzhou) Co., Ltd. revealed that an unstable market plagues their operations due to rampant rumors and frozen assets. Consequently, they will embark on debt or equity restructuring, leaving many investors reeling in despair as hope for recovery dwindled.
Adding fuel to the fire, concerns grew when a netizen reported on social media that Pancha memberships, which expired between July 17-19, could not be redeemed. This was corroborated by project owners claiming that both the platform and dealers’ cards were frozen while order deliveries experienced a ten-day delay—pushing further investment dreams into oblivion.
Once a “star” of Fangcun, Pancha Holdings advertised alluring monthly interest rates exceeding 15%. However, the bubble of speculative investments burst dramatically, leaving many investors—like Jiawei from Fangcun, who initially purchased only a single tea cake—deeply indebted, with some losing millions in the fray.
The Ripple Effects of Pancha’s Collapse
Many seasoned dealers echoed a sentiment that the collapse of Pancha was not out of the blue. “This is not real Pu’er tea; it’s purely a capital-driven transaction,” remarked a senior Fangcun tea shop owner. “It could implode at any moment.” He estimated that a staggering 80% of his acquaintances participated in Pancha’s saga, with several investing millions, only to face loss.
The financial grip of the tea sector has expanded significantly over the last few years. The shockwaves of the December 2023 turmoil surrounding Changshi Tea, which embroiled over 500 merchants and involved hundreds of millions of yuan, still echo in the market. Pancha is merely one of several financial tea enterprises to have succumbed.
Pancha Holdings: From Rapid Expansion to Imminent Bankruptcy
Founded in 2022, Pancha Holdings quickly built an impressive network of over 500 offline dealers, marking a retail presence with a Pancha store opening daily. At its peak, the empire boasted 119 simultaneously operating stores, reaching an unprecedented milestone in the tea industry.
Leading the charge was Zheng Chaogen of Xiping Town, Anxi County, Fujian Province, who envisioned Pancha as a luxury brand, positioning its products at exorbitant prices. In a bid to attract investors, Zheng publicly declared that the business would remain stable—convincing numerous fellow townspeople to invest, often without due diligence.
Mind-Blowing Price Tags on Tea Products
The exorbitant pricing of teas became a cornerstone of investment allure. One remarkable instance includes the Yilu Changhong tea cake, commanding a price of 120,000 yuan. Comparatively, Changshi Tea, prior to its bankruptcy, had escalated to a retail price of around 70,000 yuan per box.
| Product Name | Price (in Yuan) | Significance |
|---|---|---|
| Yilu Changhong | 120,000 | Premium Quality Cake |
| Changshi Tea (Bankrupt) | 70,000 | Top-tier Tea Box |
The Dark Side of Tea Speculation: A Long-standing English Phenomenon
Why do speculative tea scams like Pancha continue to attract vast amounts of capital? Understanding this phenomenon offers insight into the financial dynamics of the tea industry.
In bustling districts near Fangcun, dubbed the “Wall Street of Tea,” numerous intermediary agencies thrive, providing specialized loans to tea speculators. Many staff members from these agencies boast relationships with banking executives, further incentivizing risk-laden tea investments.
Personal Accounts from Investors
A participant in the pan-tea incident shared experiences revealing a troubling trend. “Many individuals around me took out loans to invest in tea,” the informant noted. “It’s concerning to see so many older individuals, some in their sixties and seventies, bleeding themselves dry for a speculative tea venture.”
Through the lens of these accounts, it is evident that speculative tea investment has led to a cycle of debt, leaving victims navigating the aftermath of financial despair.
The Burgeoning Market and Implications of Financial Tea Collapse
Guangzhou’s reputation as a financial powerhouse in the tea sector burgeoned in March 2021, when Dayi tea prices skyrocketed, with a single piece selling for a jaw-dropping 65 million yuan. The subsequent losses and financial strain faced by Changshi Tea, with over 100 million yuan involved in three months, set a precedent for what followed in the case of Pancha Holdings.
The tea industry, with its intricate web of investments and high-stakes speculation, has consistently proven volatile. With the currents of speculation steering the trends progressively more precarious, it raises questions about the future viability of such financial tea enterprises.