On the evening of April 12, * ST Huangtai announced that Shengda Group had obtained the voting rights entrusted by Beijing Huangtai Commercial and Trade Co., Ltd., the second shareholder of the company, and became the new controlling shareholder of the company, holding 19.9% of the companys shares. On the same day, nine senior executives and one minister of internal audit resigned, including the chairman, general manager, financial director and Secretary of the board of directors of * ST Huangtai, which triggered an earthquake in management.
The analysis shows that the decline of * ST Huangtais performance is related to its internal and external troubles, and the ownership of Shengda Group can not change the fate of its stock suspension.
Shengda Group replaces Houfeng Investment as a controlling shareholder
According to the Voting Rights Entrustment Agreement signed on April 12 between Beijing Huangtai Commercial and Trade Co., Ltd., the second shareholder of * ST Huangtai, and Gansu Shengda Group Co., Ltd., Shengda Group owns 13.9% of the total equity of * ST Huangtai. In addition, from April 11 to 12, Shengda Group increased its stake in * ST Huangtai by 0.99%.
After the completion of the equity change, together with 5.99% of the shares directly held by the listed company, Shengda Group and its concerted actors Gansu West Asset Management Co., Ltd. totally controlled 19.9% of the shares of the listed company, replacing Shanghai Houfeng Investment Co., Ltd. as a new controlling shareholder of * ST Huangtai, and the actual controller was changed to Zhao Mantang.
In fact, * ST Huangtais change of control has long been heralded. Based on the recognition of the companys future development prospects and investment value, Shengda Group and its concerted actors bought 5% of * ST Huangtai stock from March 14 to April 8. * ST Huangtai also issued a notice on April 9 reminding that one or two major shareholders of the company are planning voting rights entrustment matters, which may affect the change of control rights of the company.
And Shengda Group also expressed the information of expanding to wine culture, high-tech industry and other fields on its official website. According to the data, Shengda Group was established in 1998. Its business covers financial investment, asset management, health care, mining development, construction real estate, cultural tourism, precious metal processing and so on. It has two headquarters of Gansu and Beijing, and has more than 30 entity enterprises under its jurisdiction. Shengda Mining was listed in 2011.
According to the detailed report of rights and interests change disclosed by * ST Huangtai, Zhao Mantang indirectly holds 90% of Shengda Groups shares through three companies, while Shengda Groups revenues from 2016 to 2018 are 2.211 billion yuan, 2.407 billion yuan and 4.653 billion yuan, with net profits of 356 million yuan, 761 million yuan and 885 million yuan respectively.
* ST Huangtai said that in recent years, due to management problems and historical legacy problems, the company has encountered greater financial difficulties. As a large private enterprise in Gansu Province, Shengda Group has excellent management ability and strategic development vision. Shengda Group will be fully involved in business management, continue to optimize the allocation of resources, and gradually improve business conditions after acquiring control of * ST Huangtai.
Shen Meng, executive director of Shangsong Capital, thinks that Shengda Group may restructure * ST Royal Taiwanese assets, but the suspension of listing of the latter stock can not be reversed. It is not excluded that Shengda Group wants to pick up a cheap offer, but whether * ST Royal Taiwanese can resume listing in the later period is still a lot of unknown.
Management turbulence caused by the collective resignation of nine senior executives
It is noteworthy that it took only four days for Shengda Group to succeed in taking over the company from * ST Huangtais reminder that the companys control might change. In addition to the change of the companys actual controllers, many executives and directors of * ST Huangtai resigned collectively overnight.
On April 12, * ST Huangtai Board of Directors received resignation reports from 9 directors, senior executives and one Minister of Internal Audit, including Hu Zhenping, general manager Yan Liqiang, financial director He Weijiao, and board secretary Xie Weihong. The reasons for resignation were personal reasons. On the same day, Hu Zhenping, then chairman of ST Huangtai and company, Yan Liqiang, general manager, He Weijiao, chief financial officer, and Xie Weihong, Secretary of the board of directors, were also investigated by the SFC on suspicion of information disclosure violations.
In recent years, * ST Huangtai has repeatedly staged the collective resignation of senior executives and been punished by violation of discipline, and management chaos has become an indisputable fact. In October 2016, Wu Shengyuan, then Vice Chairman of ST Huangtai, Li Xueji, General Manager of the company, Yu Qinghui, Independent Director, Xue Zhongzhong, Deputy General Manager, and Li Honglin, Chief Financial Officer, resigned. During the same period, 15 supervisors of ST Royal Platform were supervised by Gansu Supervisory Bureau of the Securities and Exchange Commission, and some executives were punished by administrative penalties for false profits of 5 million yuan in the annual report of 2015.
In August 2017, * ST Huangtai found that the company lost about 67 million yuan in the inventory of finished wine, which had a great impact on its performance in 2017. After investigation, it was found that the relevant personnel were suspected of serious economic crimes, involving a sum of more than 100 million yuan.
In addition, * ST Huangtais second shareholder, Beijing Huangtai Board of Directors, has repeatedly voted against Huangtais board of directors, which has hindered several restructuring of Huangtai. Beijing Huangtai also sued ST Huangtai several times for failing to pay off the loan on time.
Huangtai Liquor Industry has warned that in recent years, due to management chaos, sluggish sales, sluggish market, overdue loans to banks, and frequent debt litigation cases, the companys capital shortage has been aggravated, resulting in a severe situation of tight capital chain and insufficient liquidity.
Compensation in the case of false statement of securities is enforced
In addition to the confusion of management, the mess left by * ST imperial platform to Shengda Group still has problems such as poor performance and tangled lawsuits.
The day before the change of owner Shengda Group, * ST Huangtai received the Dispute of Liability for False Statement of Securities issued by Lanzhou Intermediate Court of Gansu Province, such as the Implementation Notice and the Limitation of Consumption Order. A total of 22 investors need to be compensated for the loss of about 65495,500 yuan. The insufficient deposits of * ST Huangtai Bank will be sold off to the equivalent value of property.
* ST Huangtai said that the company had put forward an estimated liability of about 6.697 million yuan for the case. The execution cost of the case will affect the companys profits in 2019 or after-term profits by 84,207 yuan. The Limitation of Consumption Order shows that the Lanzhou Intermediate Court has taken measures to restrict the consumption of Hu Zhenping, the company and its legal representative, because * ST Huangtai has not fulfilled the obligations stipulated in the effective legal documents.
According to the announcement of * ST Huangtai on January 24, 2019, there are four other lawsuits and arbitration matters that have not yet been disclosed by the company. The net profit of * ST Huangtai in 2019 is about 186.11 million yuan. As of Jan. 24, * ST Huangtai and its subsidiaries, as plaintiffs, have not disclosed the total amount of litigation, which is about 43.057 million yuan (excluding the amount of the case not yet clear), accounting for 3.02% of the absolute value of the companys audited net assets in 2017.
Continuous litigation disputes undoubtedly make * ST Huangtais performance worse. Due to poor sales and other issues, in 2016 and 2017, Huangtai liquor industry lost 127 million yuan and 188 million yuan respectively; although net profit increased 53.76% in 2018, it still lost 86.7528 million yuan. This means that * ST Huangtai has suffered losses for three years, and the stock faces the risk of suspension of listing.
Since its listing in 2000, * ST Huangtai has experienced the golden decade of liquor industry, but has been warned of delisting risk four times so far. In the first quarter of 2019, * ST Huangtai is expected to lose 6.5 million yuan to 8 million yuan. * After the suspension of the listing of ST Huangtai shares, if the loss can not be reversed in the latest annual report, it will face the risk of termination of listing.
Xiao Zhuqing, an expert in liquor marketing, had previously told Beijing News that the crisis in Huangtai came from internal and external troubles. Foreign invasion refers to the competition of liquor industry, market share is concentrated to oligarchs, oligarchs run horse enclosure, channels sink to counties and townships, regional wineries are facing survival pressure. The fundamental reasons for the sustained decline of Huangtais performance are the lack of unity among shareholders, lack of talent and effective measures to improve performance.
Source: Yang Yi_NBJ10647, Responsible Editor of Beijing Newspaper