Embezzlement of Public Regulations and Violations to Guarantee the Real Controller of the Great Wall Film and Television and the Chairman of the Board of Directors to be Condemned

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 Embezzlement of Public Regulations and Violations to Guarantee the Real Controller of the Great Wall Film and Television and the Chairman of the Board of Directors to be Condemned


On May 23, the Shenzhen Stock Exchange (Shenzhen Stock Exchange) announced on its official website that it had misappropriated official seals to guarantee the Great Wall Film and Television Enterprise Group Limited (referred to as Great Wall Film and Television Group) and had not fulfilled its deliberation procedures and information disclosure obligations as required. The Shenzhen Stock Exchange had actually controlled the Great Wall Film and Television Company Limited (referred to as Great Wall Film and Television). Both Ruiyong and Zhao Rui, the chairman of the board, were punished with public condemnation.

Photo Source/Official Website Screen of Shenzhen Stock Exchange

It is reported that Zhao Ruiyong and Zhao Ruiyong are brothers. The source of the punishment, which both of them were publicly condemned, also needs to start with the joint and several liability guarantee provided by the Great Wall Film and Television Group in 2018.

On September 20, 2018, the controlling shareholders of Great Wall Film and Television Group and Hengqin Sanyuan Qinde Asset Management Co., Ltd (hereinafter referred to as Hengqin Sanyuan) signed the Cooperation Framework Agreement and signed the Loan Agreement on the basis of the Cooperation Framework Agreement, which stipulated that Hengqin Sanyuan would provide 350 million yuan of financing loans to the Great Wall Film and Television Group. Meanwhile, the Great Wall Film and Television Group would provide Hengqin Sanyuan with financing loans Yuan provided Guarantee Letter of Great Wall Film and Television.

After Hengqin Sanyuan provided 350 million yuan in loans to Great Wall Film and Television Group, the two sides disputed the implementation of the core clauses.

On January 10 this year, Hengqin Sanyuan filed a lawsuit against Shandong Provincial High Court, listing Great Wall Film and Television Group, Zhao Ruiyong (actual controller of Great Wall Film and Television Group) and Great Wall Film and Television Group as the first, second and third defendants respectively, demanding that Great Wall Film and Television Group repay the loan principal of 350 million yuan, interest and liquidation damages.

It was the Guarantee Letter that dragged the Great Wall film and television into the lawsuit. According to the content of the guarantee letter, Great Wall Film and Television Group provides joint and several liability guarantee.

In fact, the issuance of this Guarantee Letter is not in conformity with the regulations. The Great Wall Film and Television Announcement discloses that the joint and several liability guarantees have not been examined and approved by the Great Wall Film and Television Internal Audit Procedure, the board of directors and the shareholdersmeeting and other statutory processes, and have not been announced, and the independent directors have not expressed their consent and independent opinions, which are not in conformity with the provisions of the Company Law and the Articles of Association.

In the previous announcement of the Great Wall Film and Television, there was no disclosure of too many details of the Guarantee Letter. On May 23, the official website of Shenzhen Stock Exchange announced that in September 2018, Zhao Ruiyong and Zhao Ruijun embezzled the companys official seal to guarantee the loan of the Great Wall Film and Television Group in the name of Great Wall Film and Television. The amount of guarantee was 350 million yuan, accounting for 53.68% of the audited net assets of Great Wall Film and Television at Wall at Wall in late 2017. Great Wall Movies and Television has not fulfilled the obligation of deliberation procedure and information disclosure on the above guaranteed matters.

The Shenzhen Stock Exchange believes that Zhao Ruiyong and Zhao Ruiyong have violated the Listing Rules of Shenzhen Stock Exchange and the relevant provisions of the Guidelines for the Standardized Operation of Listed Companies on the Small and Medium-sized Enterprise Board (revised in 2015). Therefore, Zhao Ruiyong and Zhao Ruiyong were punished with public condemnation.

In fact, as early as March this year, the Jiangsu Securities Regulatory Bureau ordered the Great Wall Film and Television and Zhao Rui to take corrective regulatory measures and record them in the securities and futures market integrity files because they failed to fulfill the deliberation procedure of the board of directors and shareholdersmeeting and provided joint and several liability guarantees to the Great Wall Film and Television Group in violation of regulations.

On January 12 this year, Great Wall Film and Television disclosed the progress of the above-mentioned major litigation, and again mentioned the case in the report of 2018 disclosed on April 29. The Great Wall Film and Television said that since the Great Wall Film and Television Group and Hengqin Triple Loan Dispute had not yet been heard, whether the Great Wall Film and Television as a co-defendant should fulfill the joint and several liability guarantee, the final decision of the Shandong Higher Peoples Court shall prevail.

Source: Zhang Xianchao_NN9310, responsible editor of Beijing News