Investigation of the richest man in Yunnan Province

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 Investigation of the richest man in Yunnan Province


The house leak happened to rain all night. Recently, Dongfang Jinyu (600086. SH) Jadeite First Unit is sitting in a shaky position. It has not withdrawn from the quagmire of overdue debts, and is suspected of violating the rules and regulations.

On January 18, Dongfang Jinyu announced that the Securities Regulatory Commission had issued the Notice of Investigation on January 16 to investigate the companys suspected information disclosure violations.

On January 22, Dongfang Jinyu announced the termination of major asset restructuring.

Affected by the above information, as of January 23, Dongfang Jinyu reported a total market value of 3.393 billion yuan per share, with a total market value of 5.306 billion yuan. In just over 20 days of 2019, Oriental Jinyus share price has fallen by 14.75%.

Debt overdue is irreparable

Enterprise survey information shows that Dongfang Jinyu is the only listed company in the jadeite industry in China, with total assets of more than 1.3 billion yuan.

According to media reports, Oriental Jinyu, formerly known as Hubei Duojia Co., Ltd., was founded in 1993. Hubei Duojia, which landed in the capital market in 1997, experienced two reorganizations. In 2004, it carried out asset replacement and reorganization with Yunnan Xinglong Industrial Co., Ltd., which was held by Xian Yiguo Stock Holdings. It was transformed into a jewelry listed company with jadeite, gold, platinum and diamonds, and was formally renamed as Hubei Oriental Jinyu Co., Ltd.

In 2016, Zhao Ning, son of Zhao Xinglong, chairman of Dongfang Jinyu, took over as the new chairman. In 2017, Zhao Ning became the richest man in Yunnan with a value of 7 billion yuan.

But by 2018, the Jade Empire had more and more debts, and the richest man had no choice.

On January 15, 2019, Dongfang Jinyu announced that due to its capital-intensive industry and the impact of domestic macro-capital tightening, part of the debt has not yet been liquidated.

According to the announcement, as of January 11, 2019, the total outstanding debts due by Dongfang Jinyu and its subsidiaries amounted to 1.67 billion yuan. Among them, the largest default of the creditors rights unit is Shenzhen Zhongrui Taixin No. 3 Investment Partnership (Limited Partnership), the overdue principal amounted to 846 million yuan. In addition, Dongfang Jinyu also borrowed about 7.343 billion yuan from more than 50 banks and financial institutions.

Dong Lin, an analyst at Qingzhitong Capital in Shanghai, told reporters: If the debt overdue event lasts for a long time, it will have a great impact on creditorsconfidence and the ability of future companies to further finance. The company will face a sharp financial tension. At present, the situation of Dongfang Jinyu is not optimistic. Its annual performance has been impacted, and there must be financial pressure. In fact, many enterprises have problems first reflected in the cash flow, and Dongfang Jinyu is not the first time such problems have occurred.

As far as reporters know, as early as July 2018, the debt overdue business of Oriental Jinyu has spread.

At that time, two products were Datong Securities Tongji No. 3 Asset Management Plan and Datong Securities Tongji No. 8 Asset Management Plan, both of which provided liquidity loans for Dongfang Jinyu and were sold by Lujin. According to a reporters inquiry, the two Oriental Jinyu bonds have not been honoured as scheduled.

Perhaps because of this, on January 4 this year, the joint rating lowered the long-term credit rating of Dongfang Jinyus main body and the bond credit rating of 17 Jinyus bonds issued by it from A to BBB+, and continued to put the main body of the company on the credit rating watch list.

On January 15, Dongfang Jinyu said frankly in the Announcement on the Unliquidated New Debts due: The overdue debts of the company may affect the confidence of other creditors in the company, thus further weakening the companys financing capacity, and the company will face a sharp financial tension. At present, some creditors have taken such measures as litigation, arbitration, freezing bank accounts, freezing assets according to the situation of debt default. In the future, the company may also face the need to pay related liquidated damages, late fees and penalties, increase the companys financial costs, which has a certain impact on the companys production, operation and business development, and further increase the pressure on the companys capital. It has an impact on the companys performance this year.

Ring after ring, the debt problem of Jinyu Dongfang is even more irremediable. Lin Xiaohui, an investor in Jadeite jewelry, sighed.

On January 22, the joint rating downgraded the long-term credit rating of Dongfang Jinyu and the bond credit rating of 17 Jinyu bonds issued by the company, from BBB+ to B, and continued to put the main body of the company on the credit rating observation list, with the outlook adjusted to negative.

Forced termination of asset restructuring

Debt overdue has a far-reaching impact.

On January 22, Dongfang Jinyu issued a notice saying that due to the pressure of paying off debts recently, a number of debts have defaulted and the delivery of underlying assets can not be completed at this stage. At the same time, some of the underlying assets involved in the major asset reorganization are in the state of mortgage or freeze, and the time period needed to release the seal and complete the delivery of assets is still uncertain, so the board of directors of the company has decided to terminate the major asset reorganization.

It is understood that the major asset restructuring includes three items. Oriental Jinyu intends to purchase 100% equity of Ruilijie Suojinlong Real Estate Development Co., Ltd., Ruilijinxing Jadeite Jewelry Trading Market and Yunnan Taili Palace Jewelry Trading Market through its designated subordinate enterprises, totaling 1.726 billion yuan.

In addition, a Notice of Investigation issued by the SFC is also an important pusher for the termination of restructuring. On January 16, Dongfang Jinyu received a document from the Securities Regulatory Commission saying, Because your company is suspected of violating laws and regulations in information disclosure, according to the relevant provisions of the Securities Law of the Peoples Republic of China, it has decided to conduct a case investigation on your company.

Oriental Jinyu announcement disclosed: According to the facts confirmed by the CSRC investigation results, if it touches on the situation of major illegal forced delisting stipulated in the Rules for Listing of Stocks on Shanghai Stock Exchange and the Measures for Implementing Major Illegal and Compulsory Delisting of Listed Companies on Shanghai Stock Exchange, the companys stock trading will be warned of delisting risk. Therefore, the company at this stage does not have the conditions to continue planning major assets restructuring matters.

As a result, the three asset restructuring plans of Dongfang Jinyu all aborted.

What is more shocking is that when Dongfang Jinyu is in a tight corner, its controlling shareholdersshares are in trouble again. On November 29, 2018, the announcement showed that 1.272 billion shares of Xinglong Industrial Co., Ltd., the controlling shareholder of Dongfang Jinyu, were frozen on a waiting basis (the number of shares in Xinglong Industrial Co., Ltd. frozen on a waiting basis exceeded the number of shares actually held by listed companies due to the freezing factor). The initial date of the freezing was November 27, 2018, and the freezing period was three years. According to statistics, Xinglong Industry holds 424 million shares of the company, accounting for 31.42% of the companys total equity. The frozen shares on the waiting list actually account for 100% of the companys shares. This means that the shares held by the controlling shareholders of Dongfang Jinyu are frozen in full on a waiting basis. If there is no accident, Dongfang Jinyu will suffer a full-year loss in 2018. The above analysts stressed. According to the financial report, the net profit of Dongfang Jinyu in the first three quarters of 2018 was 136.19 million yuan, - 105.11 million yuan and - 102.07 million yuan, respectively, and the annual financial report was temporarily unpublished. Source: Han Jiapeng_NN9841, Responsible Editor of China Times

What is more shocking is that when Dongfang Jinyu is in a tight corner, its controlling shareholdersshares are in trouble again. On November 29, 2018, the announcement showed that 1.272 billion shares of Xinglong Industrial Co., Ltd., the controlling shareholder of Dongfang Jinyu, were frozen on a waiting basis (the number of shares in Xinglong Industrial Co., Ltd. frozen on a waiting basis exceeded the number of shares actually held by listed companies due to the freezing factor). The initial date of the freezing was November 27, 2018, and the freezing period was three years.

According to statistics, Xinglong Industry holds 424 million shares of the company, accounting for 31.42% of the companys total equity. The frozen shares on the waiting list actually account for 100% of the companys shares. This means that the shares held by the controlling shareholders of Dongfang Jinyu are frozen in full on a waiting basis.

If there is no accident, Dongfang Jinyu will suffer a full-year loss in 2018. The above analysts stressed.

According to the financial report, the net profit of Dongfang Jinyu in the first three quarters of 2018 was 136.19 million yuan, - 105.11 million yuan and - 102.07 million yuan, respectively, and the annual financial report was temporarily unpublished.