On the evening of August 11, Xunxing shares issued a notice saying that on August 10, 2019, Mr. Wang Lijun, the actual controller of the company and former chairman of the board, was notified by his family that he had been arrested by the Chongqing Public Security Bureau on suspicion of insider trading.
Xunxing stock announcement shows that Wang Lijun resigned on August 5 and no longer holds any position in the company. On August 5, 2019, the directors of the company elected Ms. Du Huijuan as the director to perform the duties of chairman and legal representative. So why did Xunxing Stock, once the king of zippers come to this stage today? All this may start with Shi Jiataos emergence.
Xunxing Co., Ltd., founded in 2003, is the largest zipper manufacturer in China. For many years, its sales have been ranked first in China. Its products are exported to more than 70 countries and regions, such as Middle East, Africa, Southeast Asia, Europe and America. This industry is characterized by low threshold and low market concentration. At present, there are nearly 3000 zipper manufacturers in China, serving all levels of garment and bags processing factories, mainly through close service and price to gain living space. Although the high-end market has huge space, it is facing the attack of international giants.
In this context, the development of Xunxing shares has not made a breakthrough, the high-end market can not enter, and the low-end market is also fiercely competitive. Therefore, in the past ten years, the companys revenue and net profit level has not been too prominent. In 2016, when the price of shell resources was booming, Shijia, the actual controller of Xunxing Stock Company at that time, put forward the idea of selling shell.
The transfer of the above-mentioned shares was soon completed on December 19 of that year.
Shijia received a transfer of 2.5 billion shares, but the zipper business remained in listed companies. In 2018, listed companies planned major asset restructuring and planned to sell zipper business and related assets and liabilities to Xunxing Group (formerly the major shareholder). The underlying assets included Fujian Jinjiang Xunxing Zipper Technology Co., Ltd., Xunxing International Development Co., Ltd., Tianjin Xunxing Zipper Technology Co., Ltd., and Chengdu Xunxing Zipper Co., Ltd. Technology Co., Ltd., Dongguan Xunxing Zipper Technology Co., Ltd. 100% equity, Shanghai Xunxing Zipper Manufacturing Co., Ltd. 75% equity, Fujian Jinjiang Rural Commercial Bank Co., Ltd. 0.92% equity, the counterparty to pay in cash. Subsequently, however, listed companies were investigated by the Securities Regulatory Commission, and the major asset restructuring was also forced to terminate.
Wang Lijuns Capital Loss
So, who is Wang Lijun, the wronged receiver? Why did he dare to use such high price and leverage to take over Xunxing Stock, a listed company that has been working for more than ten years and is still not warm?
Looking back, 2016 is a crazy year to fry shells, but also a year to destroy wealth. That year, Shell King Sichuan Shuangma from less than 7 yuan to nearly 42 yuan, took less than four months, during which there was a suspension. Under this wealth effect, capital began to chase shell resources crazily. Xunxing shares also pulled six Price-limit boards because of the transfer of shares. At one time, the stock price reached 22.38 yuan, which was close to the cost of Wang Lijuns taking over Xunxing shares. But since then, share prices have fallen for years.
So who exactly is Wang Lijun?
According to this calculation, each share of HSBCs Xunxing shares is priced at nearly 28 yuan. According to the latest closing price, Wang Lijun has lost more than 2 billion yuan, while the latest closing market value of the company is only 1.9 billion yuan, that is to say, Wangs floating loss amount has exceeded the market value.
In October of last year, Xunxing shares received the notice of investigation filed by the SFC on suspicion of violating the law and regulations of Xinpi.
Xunxing shares lost for the first time in nearly 10 years in 2018, with a loss of 677 million yuan, and continued to lose in the first quarter of this year. If the company continues to operate in this way, it will inevitably be eliminated in the future.
As expected, Wang Lijun may be a capital broker. Privately, there may have been successful cases before, but many brokers also started to decline in 2016. The arrest may also be related to the acquisition and reorganization of Xunxing Stock.
Rough road of reorganization
How to dispose of a shell in hand? There are only two situations: one is to keep the shell waiting for the opportunity, the other is to force mergers and acquisitions. Wang Lijun, who can win Xunxing shares at a high price, will obviously choose the latter.
In September 2017, Xunxing acquired 65% of the new third board companys price chain with 1.014 billion cash. The net profit of price chain in 2015 and 2016 is 88.26 million yuan and 55.7 million yuan respectively, while the promised performance is not less than 100 million yuan, 160 million yuan and 250 million yuan from 2017 to 2019. However, the price chain has not fulfilled its performance commitments in the past two years.
When the capital chain of the companys actual controllers was short, Xunxing had claimed 1 billion yuan from the subsidiarys price chain because it could not fulfill its performance commitment. And this has led to disputes with the price chain.
At that time, Xunxing said that after Huang Li, chief financial officer of Price Chain, was forced to resign due to his strict performance in data validation of financial statements, dividend payment, construction of internal control system and compliance with professional norms in the first half of 2018, the company recommended and approved by the Board of Directors of Price Chain in September 2018, and Du Huijuan was appointed Chief Financial Officer in the Price Chain. Prison.
However, the official seal, special financial seal, cashiers seal, bank Ukey and relevant internal authority of the current price chain are all controlled by Gan Qingqing and Zhu Ling. They refuse Du Huijuans contact. The financial director cant perform his duties. The company cant effectively supervise the financial management, accounting and asset and capital security of the price chain.
In view of the loss in the price chain and the willingness of Gan Xin-qing and Zhu Ling to evade the compensation for performance commitments, in order to safeguard the legitimate rights and interests of the company, the company submitted an arbitration application to the China International Economic and Trade Arbitration Commission in accordance with the arbitration clause stipulated in the Agreement on Share Transfer and the Agreement on Profit Compensation. The China International Economic and Trade Arbitration Commission has accepted the companys application; at present, it has not yet held a court hearing. See the Companys Notice on Arbitration Matters (Notice No. 2018-084)
In order to ensure that Gan Qingqing, Zhu Ling and the Common Dream Team exercise full operational autonomy in the chain of pricing, the company does not participate in the chain of pricing, only through the appointment of directors, supervisors and financial directors to understand the operation of the chain of pricing and exercise supervision power. In August last year, the company arranged internal auditors and external auditors to audit and inspect the price chain. In view of the problems found, the company made many corrections to the chain of oral and written request price, Gan Qing and Zhu Ling, but Gan Qing and Zhu Ling were perplexed. Based on this, the company urges the board of directors of the price chain to put forward practical solutions to correct the wrong practices of Gan Qing and Zhu Ling, and investigate the corresponding legal liability of the illegal and illegal personnel when necessary, so as to effectively ensure the effective supervision of the financial management, accounting and asset and capital safety of the companys price chain.
Subsequently, the price chain responded.
Eventually, the matter aroused the attention of Fujian Securities Regulatory Bureau, but it did not solve the problem of price chain finally. Xunxings 1 billion-dollar claim is still far away. According to Xunxings announcement, the main market of the price chain is in Europe and the United States. The Sino-US trade war in 2018 has put pressure on the operation. At the beginning of the year, the management team made mistakes in purchasing, oversold dynamic sales and poor sales. Sales fees did not effectively promote revenue growth. The adjustment of Amazon Platform Policy and VTA Policy of European Station intensified inventory pressure, pushed up storage and financial costs, and lowered gross profit. General Manager Gan Sentiment, Deputy General Manager Zhu Ling repaid loans in advance for personal reasons. Losing overseas affects staff morale and leads to the loss of business backbone. The instability of management team is also an important reason for the sharp decline in performance.
In fact, in many cases, the ultimate goal of shell buyers, mergers and acquisitions and other restructuring participants is not to operate, but to cash in. Ultimately, it depends on who can harvest. This time, Wang Lijun is undoubtedly the reaper. So is he the ultimate buyer?
Who is the ultimate payer?
In November 2016, Wang Lijun transferred 25% of Xunxings shares at a premium of 2.5 billion yuan through the control of Hui Zefeng. According to the announcement, all the funds for the acquisition came from Jiaxing Qiyou Investment Partnership. On November 14, 2016, Hui Zefeng signed the General Entrusted Loan Contract with Qiyou Investment and Tangshan Kaiping Branch of Agricultural Bank of China. Hui Zefeng borrowed 2.5 billion yuan of purchase money with an annual interest rate of 4.5%. After the completion of the transaction, HSBC pledged 25% of its Xunxing shares to Qiyou Investment.
Over the past two years, HSBCs pledge ratio has remained high. According to the quarterly report of Xunxing shares this year, the cumulative pledge of Xunxing shares held by Hui Zefeng accounts for 100% of its shares, and is still in full pledge. In the past two years, Xunxings share price has fallen again and again. Since this year, its share price has dropped from the highest 12.49 yuan to the lowest 5.1 yuan, and its latest return is only 5.31 yuan. Xunxing shares said in the May 22 announcement that all the shares pledged by the controlling shareholder, Hui Zefeng, touched the liquidation line and there was liquidation risk.
The pledgee is mainly Jiaxing Qiyou Investment Partnership (Limited Partnership).
According to Tian Eye Check, the main shareholders of Jiaxing Qiyou Investment Partnership (Limited Partnership) are Agricultural Bank Innovation and Tianjin Huize Fung, the former accounting for 59.98% of the equity, the latter 39.98% of the equity, that is to say, the major shareholder of Agricultural Bank Innovation is Agricultural Bank International Holdings Limited.
According to the information of Xinpi in 2016, during the period of Hui Zefengs acquisition of Xunxing Share Control, it signed the General Entrusted Loan Contract with Qiyou Investment Partnership (Limited Partnership) and Tangshan Kaiping Branch of Agricultural Bank of China. Qiyou invested 2.5 billion yuan in entrusted loan to Hui Zefeng to accept 25% of Xunxing Share. From the above ownership structure and fund providers, the ultimate buyer may have surfaced.
In fact, most of the people familiar with Xunxing shares probably started with the basketball team of Fujian Xunxing. The teams star player is well-known national player Wang Zhelin, in the quarterly report, he is still one of the top ten shareholders.
On January 17, 2015, Xunxing shares issued an additional plan. The company intends to issue 24 million shares with a target of 1.301 yuan/share, raising no more than 312 million yuan. After deducting the issuance fee, 200 million yuan will be used to repay bank loans, and the rest will be used to supplement liquidity. Among the specific targets of the non-public offering was Wang Zhelin, who planned to subscribe for 1 million shares, or just over 13 million yuan. Subsequently, Xunxing shares implemented a 10 to 10 transfer scheme, Wang Zhelins shares reached 2 million shares. This years quarterly report shows that he still holds 1.28 million shares.
If he had staked so far, he might not have been able to float much.
Source: China Responsible Editor of Securities Dealers: Yang Bin_NF4368