On July 23, according to CCTV financial and economic reports, 21 investors suing Xiangyuan Culture and Zhao Wei received the first instance judgment issued by Hangzhou Intermediate Court. Judging from the judgment, the court basically supported the investorsdemands.
As of May 18, 2019, the company had received 544 cases of securities false statement liability disputes, with a total lawsuit amount of more than 570 million yuan, according to the Xiangyuan Culture Litigation Announcement.
If the acquisition of 10,000 cultures fails, it will be prosecuted by hundreds of people.
Xiangyuan Culture and Zhao Wei are now facing this situation, starting from a share transfer more than two years ago.
At the end of December 2016, Wanjia Culture (later renamed Xiangyuan Culture) announced that Longwei Media, owned by Mr. and Mrs. Zhao Wei, plans to invest 3.06 billion yuan to acquire 29% of Xiangyuan Culture. After the acquisition, the companys largest shareholder will be changed from Wanjia Group to Longwei Media, and the actual controller will be changed from Kong Deyong to Zhaowei.
After the news came out, the Shanghai Stock Exchange immediately sent a letter to inquire. In the reply of Wanjia Culture, of the 3.06 billion funds that Zhao Wei and his wife used for acquisition, only 60 million yuan was their own funds, and the remaining funds were borrowed. Among them, 1.5 billion yuan came from Xizang Yinbixin loan guaranteed by Zhao Weis credit, and another 1.5 billion yuan came from mortgage loans to financial institutions. At that time, the related equity pledge financing was still in the approval process of financial institutions.
Zhao Wei leveraged 50 times to leverage 3.06 billion yuan of capital, which led to the plan to enter the listed company, triggering widespread concern in the capital market. Since then, with financial institutions rejecting Zhao Weis mortgage loans, as well as regulatory investigation. Wanjia Culture and Zhao Wei first revised the acquisition plan on February 14, 2017, reducing the amount of share transfer to 500 million yuan, then terminated the acquisition on April 1, 2017, and said that they would not hold each other responsible for breach of contract. Zhao Wei also successfully recovered the share transfer payment of 250 million yuan in advance.
Zhao Wei retreated, but the shareholders suffered heavy losses. In the four months from Wanjia Cultures disclosure of the acquisition plan to the announcement of the termination of the acquisition, Wanjia Cultures stock price first rose from 18.33 yuan/share to 25 yuan/share, and then fell to 13.80 yuan/share on March 31, 2017, with a 44.8% decline in the higher level.
Since 2017, the share price of Xiangyuan Culture has been declining continuously. Source: Wind
Since then, in January 2018, ordinary investors have sued Xiangyuan Culture and Zhao Wei to the Hangzhou Intermediate Court for compensation. On January 17, 2019, the Hangzhou Intermediate Court of Justice decided that Xiangyuan Culture paid a total of 54535.83 yuan in compensation and interest to investors. Zhao Wei belonged to other natural persons who made false statements and was jointly and severally liable for the above debts. After the judgment of the first trial, Xiangyuan Culture and Zhao Wei refused to accept the judgment and filed an appeal, which resulted in the judgment of the second trial at the beginning of the article.
Xiangyuan Cultures recent lawsuit announcement shows that as of May 18, 2019, the company has received 544 cases of securities false statement liability disputes, with a total lawsuit amount of more than 570 million yuan.
In addition to facing compensation lawsuits from investors, Mr. and Mrs. Zhao Wei were also sentenced to fixed administrative penalties by the SFC in April 2018. Among them, Xiangyuan Culture and Longwei Media were fined 600,000 yuan each; the acquisition parties, Kong Deyong, Huang Youlong, Zhao Wei and Zhao Zheng, were warned and fined 300,000 yuan; Kong Deyong, Huang Youlong and Zhao Zheng were fined 300,000 yuan. Zhao Wei was banned from securities market for five years.
02 Womens Buffett was worth 6.3 billion yuan at one time
Before acquiring Wanjia Culture and encountering Waterloo, Zhao Wei was once called the female Buffett of A shares.
On December 30, 2014, Mr. and Mrs. Zhao Wei purchased 1.93 billion shares of Ali Film at HK$1.6 per share, equivalent to 9.18% of Ali Film, becoming the second largest shareholder of Ali Film.
In April and October 2015, with the rising share price of Ali Pictures, Mr. and Mrs. Zhao made two large-scale cash transfers, totaling more than HK$2.3 billion and earning more than HK$500 million net.
With two large-scale cash-outs, Zhao Weis shares in Ali Pictures fell to 4.97%, because their shares were less than 5%. Whether they would reduce their holdings will not be announced. As of todays closing price, the shares of Ali Pictures were HK$1.63 per share, which is still higher than Zhao Weis shares at that time.
The investment in Alis film industry not only made Zhao Wei profitable, but also gave her the title of female Buffett in the capital market. During the period from investing in Ali Pictures to acquiring Wanjia Culture, Zhao Wei took frequent actions in the capital market. In February 2015, June 2015 and November 2015, Tang De Film and Television (5.810,? 0.06,? 1.04%) (A shares), Ruidong Group (Hong Kong shares, later renamed Yunfeng Finance) and China Creative (Hong Kong shares) went public in succession. Before that, Zhao Wei subscribed to the shares of the above companies at a lower price.
A series of capital operations, so that Zhao Weis status rapidly increased. According to the announcement made by Wanjia Culture in January 2017, Zhao Wei, the actual media controller of Longwei, and Huang Youlong, his spouse, owned about 4.522 billion yuan of stock market value, 666 million yuan of real estate value, and 318 million yuan of other equity investment value. In addition, the assets of film and television, wine industry and 4S, the total value of Zhao Weis assets had already been realized. More than 5.6 billion yuan.
Even after the failure of the acquisition of Wanjia Culture, Zhao Wei still ranked 42nd in Huruns list of self-made women with 6.3 billion yuan of assets.
_Photographs taken by Luo Yunfei, a journalist from Xinhua News Agency
03 is of great significance to follow-up investor prosecution
According to the insiders, the judgment of the second trial issued by Zhejiang Provincial High Court on July 16 has a significant impact on the subsequent investor prosecution of similar cases of Xiangyuan Culture and Zhao Wei.
Xu Feng, senior partner of Shanghai Chuangyuan Law Firm, pointed out to Sino-Singapore Jingwei that basically, it should be judged in the same case. As long as investors who subsequently sue for compensation buy and sell Xiangyuan Culture at the same time as investors in the above-mentioned judgment buy and sell stocks, there will probably be the same judgment result, and there will be no such judgment. An unexpected occurrence.
However, Xu Feng pointed out that for investors who subsequently sued, if Xiangyuan Culture and Zhao Wei appealed, then investors still need to wait for the judgment of the second instance. Generally speaking, Xiangyuan Culture and Zhao Wei are likely to appeal. The appeal is not necessarily to change the verdict, but to delay the progress of the case and reduce the impact of the case.
It is worth mentioning that according to CCTV financial report, 21 investors suing Xiangyuan Culture and Zhao Wei have received the first instance judgment issued by Hangzhou Intermediate Court. Judging from the judgment, the court basically supports the investorsdemands.
Zang Xiaoli, a lawyer at Beijing Yingke Law Firm, said that the court did not deduct any systemic risks within the period of time that met the scope of claims, fully supported shareholdersclaims, and then asked Zhao Wei to assume joint and several liabilities, that is to say, during that period of time. Any loss should be borne by the listed company.
However, in the judgment result, Zhao Wei only assumes joint and several liability for compensation, so if Xiangyuan Culture takes the initiative to compensate, then Zhao Wei may not need to pay compensation. Only when Xiangyuan Culture can not compensate, investors can apply to the court to enforce Zhao Weis compensation. Of course, in the actual process of operation, Xiangyuan Culture and Zhao Wei may share the corresponding responsibility to determine their respective compensation amount. Xu Feng said.