Research On The Legitimacy Of Trust Financing Of The Right To Return On Assets

With the rapid development of trust industry in China,various investment and financing tools based on trust emerge in an endless stream.However,behind the rapid development of the trust industry,there are often hidden risks.Among them,the combination of the right to return on assets and trust has caused many disputes.From the case of Anxin Trust Co.,Ltd.v.Kunshan Chungao investment and Development Co.,Ltd.,which is known as "the first case of trust financing of the right to return on assets " in China,to the case of Shaanxi Jinyuan Oil Co.,Ltd.and Western trust company in December 2020,when facing the above financing mode,the judicial authorities have never been able to demonstrate and explain whether the the right to return on assets can establish a trust from the perspective of the establishment and effectiveness of the trust.From the perspective of trust law,the legitimacy of the trust financing of the right to return on assets has always been controversial,which has laid a huge legal risk for both sides of the investment and financing.In the past discussions on the legitimacy of this financing mode: the purpose of trust only stays at the level of whether it violates laws and administrative regulations;the consideration of trust property has never clearly explained the qualification requirements of trust property;the consideration of trust behavior has a deviation in the understanding of "entrusted to" in China’s Trust Law.It is difficult to make a complete and accurate judgment on the legitimacy of this financing mode in the past discussions.It is necessary to define the relevant concepts and re-examine the legitimacy of this financing mode.The case of "the first case of trust financing of the right to return on assets " in China is the most typical,which completely covers the legal disputes that may appear in all aspects of trust financing of the right to return on assets.Taking the case as a typical case,it is of the greatest significance to conduct a comprehensive legitimacy inspection.The specific inspection process is as follows: first of all,at the level of trust purpose,the trustor’s real trust purpose is to evade supervision,which violates the regulatory provisions in essence.Because the regulatory provisions represent the interests of non-specific social investors and the safety of the real estate market,the trust purpose is illegal because it damages the public interests.Secondly,in the aspect of trust property,the right to return on the assets involved in the case should be recognized as the future creditor’s right without basic legal relationship,which meets the requirements of legitimacy,positive property interest,certainty and transferability of the trust property.Finally,in the aspect of trust behavior,"entrusted to" stipulated in China’s Trust Law should be understood as the transfer of the ownership of trust property.As the right to return on assets belongs to the future creditor’s right without basic legal relationship,the financing party can not complete the trust behavior of transferring the property ownership before selling the beneficial right of the trust,so the trust can not take effect,the financing party does not enjoy the beneficial right of the trust,and there is no legal basis for transferring it to social investors.Therefore,the structure of the trust financing of the right of assets in this case violates the relevant standard system because the trust purpose is illegal and the trust behavior is not completed.Only by correctly understanding the connotation of trust purpose,trust property and trust behavior,and taking this as the starting point of judgment,and combining with the facts of the case,can we get an accurate and complete judgment on whether the trust financing of the right to return on assets is legal or not.