Judicial freeze on 200 million private offerings: listed companies are on the verge of delisting after falling into a 10 billion-dollar fraud

category:Finance
 Judicial freeze on 200 million private offerings: listed companies are on the verge of delisting after falling into a 10 billion-dollar fraud


Now, ST Huayes annual report suffers huge losses, assets are frozen by creditors, and more than one billion corporate bonds are in default successively. It is noteworthy that the company recently issued a senior management increase announcement, believing that the companys valuation was significantly undervalued, boosting investor confidence. Just last week, the company wanted to issue a major announcement that the stock price was below par value and might face the risk of termination of listing, but the result was that the stock price date was written incorrectly by negligence.

Subsidiariesshare of funds is frozen entirely

Ten Billions of Private Lifting Guns

On June 7, * ST Huaye announced that Beijing Guoruimin Investment Co., Ltd., a subsidiary company, had recently received the Notice of Assistance in Implementation from the Third Intermediate Peoples Court of Beijing.

The ruling No. 99 of Beijing 03 in the case of execution of notarized creditors rights documents (2018) by Great Wall Xinsheng Trust Co., Ltd. with the executee Huaye Capital, Guorui Minhe, Huaye Development (Shenzhen) Co., Ltd. has been legally effective. The court has frozen the whole share of Guorui Mins private equity fund No. 18 in Yingxue Investment Management Center (Limited Partnership) of Shanghai, and frozen it. The period is from June 3, 2019 to June 2, 2022.

* ST Huaye burst out a huge risk of 10 billion-dollar debt last year. At present, the companys main business has basically stagnated. All assets have been frozen by creditorsapplication for judicial freeze. At the same time, more than one billion corporate bonds have defaulted. The share of private equity funds held by Guo Ruimin-he, a subsidiary of ST Huaye, has been frozen, which shows its current situation.

A lawyer in South China told Foundation Jun that he was also helping to apply for the execution of Huaye Capital on behalf of creditors. The company now faces a lot of things, and some assets have been applied for freezing. The share of private equity funds held by subsidiaries has been frozen this time, mainly because of problems with everyone. There will be no liquidity after the freeze, waiting for the court to deal with it.

A lawyer in Shenzhen also said, This is a normal legal procedure. The court may soon execute, and in the future it may dispose of this share of private equity through auction and sale to repay the trusts funds.

Foundation Jun found that the managers of the frozen private equity fund share of Huaye subsidiary were a well-known 10 billion-dollar securities private equity investment in Shanghai Yingxue.

Not long ago, * ST Huaye referred to its initial investment in private equity funds in its reply to the annual report inquiry from the Shanghai Stock Exchange.

The fund gentleman briefly talks about the basic situation. Guo Ruimin, a subsidiary of Huaye, invested 200 million yuan to purchase Private Equity Fund No. 18 of Yingxuewu hook in 2018. As some listed companies do now, they buy some private equity funds to earn some investment returns. But the problem is that * ST Huaye broke out the risk of accounts receivable last year. Therefore, the Shanghai Stock Exchange questioned that the company would pay large sums for private equity funds in the case of operating difficulties. What do you think? Today, the company is financially strapped and has no money to pay. Even the share of the original private equity fund has been frozen by judicial enforcement. The 10 billion-dollar private equity fund is also lying on the gun.

Subsidiaries purchasing private equity funds for 200 million yuan were questioned by the Shanghai Stock Exchange

According to the filing information of the fund association, Yingxue Wugu 18 Private Equity Fund, which was purchased by Guo Ruimin, a subsidiary of Huaye, was established on June 1, 2018 and filed on June 6, 2018. It belongs to the private equity investment fund. The manager is Shanghai Yingxue Investment Management Center (limited partnership), and the trustee is Xingye Securities.

From May this year * ST Huayes Announcement on the Post-Audit Question Letter of the Shanghai Stock Exchange to the Companys Annual Report 2018, we can see that the total size of Ying Xue Wu Gou 18 private equity fund is 212,177,196.53, with investors including Guo Rui Minhe and Lu Ning. Guo Ruiminhe, a subsidiary of Huaye, invested about 200 million yuan on July 6 last year to purchase the fund, which was funded by the companys own capital.

* ST Huaye said that the private equity fund company had no relationship with the company, and the total investment of 200 million yuan did not exceed 10% of the companys audited net assets in the previous fiscal year. The company did not disclose the interim announcement separately.

The announcement also disclosed that private equity fund No. 18 of Yingxue Wugu is a non-graded product with no fixed yield. In accordance with the relevant provisions of the Accounting Standards for Enterprises, the company shall include the investment in the accounting of financial assets, which are measured at fair value and whose changes are recorded in the profits and losses of the current period.

Regarding the operation of Yingxue Wugu 18 Private Equity Fund, * ST Huaye said that as of December 31, 2018, the net share of the fund was 0.948 yuan, according to which the company recognized the fair value change income of - 8.871 million yuan. Subsequently, the company noticed that from January to April 2019, the net share of the fund rebounded and did not have the basis for long-term impairment. As of April 30, 2019, the net share of Yingxuewugu 18 Private Securities Investment Fund rose to 1.025 yuan.

The announcement also disclosed that according to Yingxues Yingxue Wugu 18 Private Securities Investment Fund Quarterly Report 2018, the investment direction of Yingxue Wugu 18 is fixed income investment bonds of 26.45 million yuan, bank deposits and settlement reserve of 1.341 million yuan and bond fund of 286 million yuan (during the bond resale period, there are 68 million corporate bonds and no corporate bonds at the end of the reporting period).

* ST Huaye also said that the companys investment in Private Securities Investment Fund No. 18 is the normal financial investment business of the company, which can further promote the expansion of the company in the financial field, in line with the companys development strategy at that time. In addition, the company and its shareholders did not have any other capital exchanges with the private equity fund except Guo Ruimin, a subsidiary company of the company, who jointly subscribed to the fund on July 6, 2018.

Listed companies are deeply involved in the 10 billion radish stamp scam

Huaye Capital (now * ST Huaye) was originally named Huaye Real Estate. In the past, its main business was real estate. In 2015, Huaye Capital changed its name to Huaye Capital and introduced new medical financial supply chain business.

The operation mode of medical financial supply chain business is to purchase the receivables from suppliers at discount price for financial products such as capital management plan, partnership, trust plan, etc. to provide drugs, equipment and consumables to the third-class hospitals. The third-class hospitals will return the funds according to the original value of the receivables on the due date, so as to realize the investment income. However, it was this business that caused the company to explode.

On September 25, last year, Huaye Capital announced that the creditors rights of accounts receivable invested by its subsidiary, Tibet Huashuo Investment Co., Ltd. had been overdue, with a total overdue amount of accounts receivable amounting to 888 million yuan.

Later, Huaye Capital sent lawyers to the First, Second and Third Affiliated Hospitals of the Army Medical University of the debtor to find out the situation, and then found that the debt agreement was false. The company said, Chongqing Hengyun Pharmaceutical Co., Ltd., a company affiliated with the company, is suspected of forging seals and fabricating transactions with the hospitals accounts receivable creditors rights, which may cause the company to suffer significant asset losses.

Relevant announcements show that at that time, Huaye Capitals medical and financial business related to accounts receivable stock of 10.189 billion yuan, all obtained from the transferor Hengyun Pharmaceutical, Hengyun Pharmaceutical has no reasonable explanation, and its actual controller Li Shilin has not been able to contact (it is noteworthy that this Li Shilin is also the second shareholder of Huaye Capital). If the forgery is true, these stock receivables are at risk of being partially or totally unable to recover.

Subsequently, the share price of Huaye Capital began to fall sharply. In September 2018, the company also reached 8.38 yuan, but in the following month, cliff type plummeted to about 2 or 3 yuan. In addition to the sharp drop in share prices, the company frequently receives notice of responding and is recovered.

This year, Huaye Capital disclosed its annual report of 2018, which caused huge losses and stunned the market. The total loss in 2018 was 6.438 billion yuan, which exceeded the companys total revenue in that year. When the annual financial report was issued by the accountant, the companys stock was warned of delisting risk and renamed * ST Huaye. The companys share price has fallen sharply again since the end of April this year, and even continued to drop, and now it has become immortal stock.

As of June 10, 2019, * ST Chinas latest stock price was 0.94 yuan, a decline of about 89% compared with last years high.

Bonds cant be paid and shares of controlling shareholders are frozen

Major Promotional Announcement for Oolong

On the evening of June 3, * ST Huaye announced that it could not pay the principal and interest of 16 Huaye 02 of the companys non-public bonds issued in 2016 due to the current difficulties in capital turnover. The issuance scale of this issue is 430 million yuan. As of May 31, 2019, the balance of this bond is 0.07 billion yuan.

At the same time, * ST Huaye announcement, the controlling shareholder Huaye Development (Shenzhen) Co., Ltd. holds shares of the company frozen by judicial rotation, the number of frozen shares totals 291,607,931 shares. The applicants for this waiting freeze are: Chongqing Branch of Industrial and Commercial Bank of China Limited.

It is noteworthy that * ST Huaye disclosed on May 21 this year the Announcement on the Share Increase Plan of Some Directors, Senior Managers and Core Managers of the Company. The company said that the purpose of the plan is to judge the companys current market environment, actual operating conditions and reasonable period of future development and value based on the companys current market environment. There is no incentive to mislead investors. At the same time, in order to boost investor confidence, we should protect the interests of small and medium-sized investors and maintain the stability of the capital market. By June 3, the companys chairman Xu Hong and four other senior executives had increased their holdings by 4.4202 million shares and spent 5.1593 million yuan.

It is interesting to note that * ST Huaye issued a reminder announcement on June 7. It said that as of October 18, 2018, the closing price of the companys stock was 0.99 yuan per share, and the closing price of the stock was lower than the face value of the companys stock. On the one hand, it indicates the risk of termination of listing. On the other hand, it indicates that the board of directors and management of the company attach great importance to it. The company is striving to stabilize and improve the fundamentals of the companys operation, so as to provide a favorable guarantee for the follow-up operation.

As a result, the company immediately issued a correction announcement, saying that due to staff negligence, some of the contents were filled in incorrectly. Now make a correction: As of June 6, 2019, the closing price of the companys stock is 0.99 yuan per share, and the closing price of the stock is lower than the face value of the companys stock.

Source: Yang Bin_NF4368, Responsible Editor of China Foundation Newspaper