Is ST Comexs trading limit good or bad for investorsclaims?

category:Finance
 Is ST Comexs trading limit good or bad for investorsclaims?


ST Comexs stock price is so ups and downs because last week Comex Pharmaceutical was fined by the Securities Regulatory Commission for huge financial fraud. Some investors believe that the company is unlikely to delist, so a large amount of money poured into the stock. ST Comets latest response says stock market volatility is affected by many factors. Regarding the delisting of the company, according to the advance notice issued by the SFC, it is not mentioned, but the final punishment resolution should be waited for.

ST share price does not fall but rises. Is it good or bad for investors? In this regard, a reporter from Beijing Youth Daily interviewed Han Youwei, a lawyer of Yihua Law Firm in Cambridge, Jiangsu Province.

Whether to delist or not is subject to the opinions of the exchange on penalties

On Aug. 16, the SFC punished and banned Kangmei Pharmaceutical Co., Ltd. and made a qualitative analysis of the serious financial fraud of Kangmei Pharmaceutical Co., Ltd. in extremely strict terms. The SFC will impose a maximum penalty of 600,000 yuan on Kangmei Pharmaceutical Industry, warn Ma Xingtian and Xu Dongjin, and impose a fine of 900,000 yuan respectively, and impose market ban and fine on relevant personnel.

There are different opinions on whether ST Comet can withdraw from the market, which investors are most concerned about.

Han Youweis lawyer told Beiqing Daily that delisting generally includes two situations. One is delisting because the financial indicators can not meet the requirements. One is delisting because of major violations of the law. Although Kangmei Pharmaceuticals financial indicators have not touched the withdrawal criteria, the possibility of withdrawal due to major violations can not be ruled out at present. In terms of its illegal nature, the SFC has a very serious nature. Procedurally speaking, according to the new law, the CSRC will authorize the stock exchange to decide whether to delist. In this case, the CSRC will directly decide whether to delist a listed company. At present, the penalty opinions of the exchange have not yet been published, which can not rule out the possibility that Comme Pharmaceutical will withdraw from the market due to major violations of the law.

What is the impact of stock price not falling but rising on claims

After Kangmei Pharmaceuticals counterfeiting became clear to the world, there were four consecutive fluctuations in its stock price. ST Kangmeis market value increased by 3.3 billion yuan to 18.5 billion yuan.

Kangmei Pharmaceutical fell from the shrine of white horse stocks, injuring the small and medium-sized shareholders in the secondary market. According to this years quarterly report, the number of shareholders in the company reached 283,800 households and the number of households holding 15,500 shares. Although it recently closed with four consecutive rises and stops, there was only a small fraction left relative to the previous high share price.

After the exposure of Kangmei Pharmaceuticals counterfeiting, its stock price rose and fell four times in a row. Han Youwei believes that from the perspective of shareholder claims, there are many articles in this.

In the case of Securities False statement, when a listed company is investigating, the stock price falls sharply. When the investigating result comes out, it is ready to punish, but the stock price does not fall. In this case, the day of filing investigation is usually the day of disclosure, but some courts regard the day of giving prior notice of administrative penalty as the day of disclosure, and at the same time take the trend of stock price after the day of disclosure as an important criterion to judge whether the difference loss of investors has causal relationship with false statements.

In the case of Kangmei Pharmaceutical Industry, according to the existing public information, Kangmei Pharmaceutical Industry was investigated by the SFC on December 28, 2018, the preliminary investigation results were released on May 17, 2019, and the SFC punished Kangmei Pharmaceutical Industry on August 16 and informed of its ban. Among the investors who suffered a lot, some bought stocks before filing investigation, but many bought stocks afterwards. If the investigative filing day is regarded as the disclosure day, a large number of investors will lose their claim eligibility.

He pointed out that in the future, when hearing the case of defending the rights of shareholders in Kangmei Pharmaceutical Companys false statements, will the court also reject all shareholdersclaims for defending their rights by taking the day after the issuance of the prior notice of administrative penalty as the disclosure day? Han Youwei admitted that these are unknown, laying down uncertainties for future shareholder claims.

Core Interpretation

In the case of false statement of securities, the determination of the disclosure date of false statement is related to whether investors are qualified to file damages lawsuits and the calculation of investorslosses. Therefore, the identification of disclosure date in civil compensation disputes of securities false statements often becomes the focus of controversy.

Article 20 of the Provisions of the Supreme Peoples Court on the Trial of Civil Compensation Cases Caused by False Statements in the Securities Market stipulates that the disclosure date of false statements is the first time that false statements are publicly disclosed in newspapers, radio and television stations which are issued or broadcast nationwide. The regulation is vague. In practice, the time points when listed companies are investigated for false statements, the results of investigations are disclosed and listed companies are punished by administrative penalties for false statements are likely to become disclosure days.

Han Youwei, for example, in the case of San Laida Xinli Financial ShareholdersRights Defense, the Hefei Intermediate Peoples Court and Ningbo Intermediate Peoples Court both took the announcement day of the notice of administrative penalty as the disclosure day. Because the share price fell sharply in the earlier period, the share price did not fall on the punishment notification day. These two courts accordingly took the announcement day of administrative penalty notice as the disclosure day. Confirmation: After the false statement behavior is exposed, the stock price does not fall but rises, so there is no causal relationship between the loss of shareholders and the false statement behavior, thus rejecting all shareholderslitigation requests.

However, Han Youwei also pointed out that in another case of defending the rights of shareholders in Wuhan Fangu, the Wuhan Intermediate Court identified a disclosure time that caused a larger decline in share prices as the Correction Day (disclosure day), so Han Youwei believed that when there were multiple disclosure actions, the disclosure day should be recognized in addition to the characteristics of first disclosure. We should also consider the decline of stock price after revealing behavior. The larger the decline after revealing, the stronger the revealing force, the more obvious the characteristics of the correction day (disclosure day).

Source: Liu Song_NBJ9949, Responsible Editor of Beijing Youth Daily