In a cross-border acquisition four years ago, Contemporary Oriental (000673.SZ) originally hoped to use ASEAN to make Jiangwei Film and Television Company (hereinafter referred to as Jiangwei Meng) a leading player in the film and television industry. However, with the founder leaving the company after the completion of performance betting, it has become the leader of the contemporary Oriental wholly-owned subsidiary company. Not only has the film and television business stagnated, but also the projects that started to operate before the acquisition have left many bad debts and long lawsuits for listed companies.
Netease Qingliu studio reported exclusively last year that Wu Xiubos legal person was suspected of carving official seals in several listed companies, revealing that the 1 billion yuan profit of the Military Division Alliance fell into Rashomon. A year later, Qingliu Studio recently learned from various channels that all the stakeholders in Wu Xiubos Alliance of Military Divisions project are still competing for the share of profits behind it. As one of the main investors of the Military Division Alliance, the general of the contemporary Oriental Union was responsible for the satellite TV distribution of the Military Division Alliance, because he was involved in a complex interest struggle, which led to many lawsuits, and the former allies were not happy.
In only one film and television project of the Alliance of Military Divisions, Allied General Wei has involved five lawsuits, only one final judgment has been made at present, and other lawsuits have not yet been judged. It is understood that at present, 34 million yuan of satellite TV revenue lawsuit has been settled, the alliance will lose the lawsuit. In addition, Jiangsu Satellite TVs 200.8 billion yuan target litigation is pending, and other interested parties have hundreds of millions of Yuan litigation differences.
The execution of the above litigation may affect the recognition of past earnings of listed companies. It is understood that litigation is the founder of the performance of an important project betting period, has affected the performance of Weiyuan founder betting. But the key is that the court will be the contemporary Oriental Peace Union will Weiyuan founder jointly included in the object of execution.
Contemporary Oriental is trying to cut the impact of the above litigation on listed companies. It is understood that contemporary Oriental attempts to communicate with the original founder of Allied General Wei failed, and sent a letter to the Executive Court saying that listed companies and Allied General Wei operate independently and should not be listed as the executed.
In addition to the entanglement caused by the Alliance of Military Division project, many projects invested by the Alliance General Wei in the early stage have problems, including You from the Star, Longmen Bodyguard Bureau, Warm Blood Changan game copyright projects in 2018 with a total loss of 1 billion yuan, and the Alliance General Weis inventory with a total loss of 340 million yuan. In 2018, the alliance will still lose nearly 500 million yuan net after the proposed impairment of assets, exceeding the previous three-year total performance of the performance betting.
The high-premium cash purchase of baboons has now become the biggest constraint to the contemporary East. Due to many lawsuits and the overall environmental impact of the film and television industry, it is difficult to recover project funds, resulting in the shortage of funds of contemporary Oriental listed companies, which lost 1.6 billion yuan in 2018. Because of the overdue guarantee or loan contracts, the major shareholders of contemporary Oriental are also in debt quagmire. At present, the shares of the listed companies and the shares of the Allianz Company held by the major shareholders and their concerted actors are all frozen by banks on a waiting basis.
Xu Jiaxuan, the founder of Weiyuan, not only directly obtained 1.1 billion yuan in cash by selling his shares, but also obtained 500 million yuan in operating capital. It is worth mentioning that Xu Jiaxuan is called Wu Xiubos close friend by the media. They have several years of cooperation experience.
After a long year and a half since the filing of the lawsuit, Wu Xiubos final judgment on the revenue lawsuit of the satellite TV distribution of Military Division Alliance was handed down on June 24, 2019. The judgment shows that the alliance general lost the lawsuit. The outcome of the lawsuit cleared the fog for the entangled appeals of all interested parties.
In June 2015, Contemporary Eastern acquired 100% of Allied General Wei with 1.1 billion dollars in cash. The acquisition was notable for its high premium of 1,200%. According to the purchase performance betting agreement at that time, Allied General Wei promised to return net profit of not less than 100 million yuan, 135 million yuan and 200 million yuan from 2014 to 2016, respectively.
With founder Xu Jiaxuans team completing performance betting and leaving the alliance in July 2017, all problems began to emerge. Among them, the most complex lawsuit involving the highest amount of money involved is the struggle between the stakeholders triggered by the 2007 exploding historical drama The Alliance of Military Divisions.
The case goes through roughly as follows: The Military Division Alliance was initially jointly invested by General Wei of the Alliance and Jiangsu Huali Cultural Media Co., Ltd. (hereinafter referred to as Jiangsu Huali), with 50% of the investment shares of both sides. In the first half of 2016, Wu Xiubos Holgus No. 2 Culture Media Co., Ltd. joined in the mid-shooting of the TV series, and received 50% and 45% of the investment income rights from the original two major investors respectively.
The former legal representative of No. 2 Company transferred the investment share of Jiangsu Huali to No. 2 Company on suspicion of carving Jiangsu Huali official seal privately. During Xu Jiaxuans operation, Allied General Wei also transferred 50% of its equity to No. 2 Company. Allied General Wei retained only the issuance of Satellite TV. No. 2 company subsequently introduced a number of other investors, including print media.
As one of the original investors of Military Division Alliance, Jiangsu Huali discovered the matter of Private Seal transfer agreement after the incident, and then took Allied General Wei and No. 2 companies to court one by one to pursue the revenue of satellite TV issuance and network issuance respectively. Neteases liquidation work previously reported that the revenue of the drama mainly came from satellite TV revenue (about 270 million yuan) and online distribution revenue (about 670 million yuan), plus the overall revenue of game and overseas distribution revenue of about 1 billion yuan.
With the details of court litigation cases disclosed gradually surfacing, the key issues of case litigation have been sorted out clearly by court judgments. According to the final judgment of Yangzhou Intermediate Peoples Court of Jiangsu Province on June 24, 2019, the agreement of 45% transfer of No. 2 Company from Huali, Jiangsu Province, was found to be null and void, and Allied General Wei should pay for the Union of Military and Teachers. Another investor of the Alliance, Jiangsu Huali Satellite Television, issued a profit allocation of 34.136 million yuan and compensated for the corresponding interest losses.
Contemporary Orientals have tried to cut away from this situation. As early as October 2018, Contemporary Oriental responded to the inquiry letter of Shenzhen Stock Exchange that the aforementioned project (referring to theMilitary Division Alliance) occurred during the performance commitment period after the company acquired 100% of the shares of Alliangwei Company. It belongs to the daily business nature of Alliangwei Company, and its operational decisions are made independently by the management of Alliangjiangwei Company. Come out.
But its parent company, Contemporary Oriental, is still on the executive list. Contemporary Oriental has objections to being included in the executive list. On September 12, 2019, Contemporary Oriental sent a letter to the Peoples Court of Haojiang District, Yangzhou City, proving that Contemporary Oriental and Allied General Wei Company is independent in property. The Alliance will have the property of independent legal persons, such as the amount of accounts receivable far exceeding the object of execution of the case, and have the ability to liquidate debts. If additional shareholders are the executed, they must meet the legal conditions and meet the legal procedures according to law. If we add our company as the executee, first of all, we should be able to prove that the assets of Allied General Wei are insufficient to pay off the debts determined by the effective legal documents.
Li Zeqing, chairman of the contemporary Eastern Supervisory Board, did not directly respond to Netease Qingliu Studio. He only said that the case of Military Division Alliance involved the acts of private seal engraving by the partners. The case is more complex, and the courts decision is the prevailing one. The parties dispute the validity of the agreement. The progress of the case can be reported in the second half of the year, and the follow-up progress should be based on periodic reports.
The outside world can not judge whether the ultimate listed company will bear the responsibility, but the bank account of Allianz General Wei has been frozen early, and many accounts receivable items are charged bad debts in 2018.
As early as 2012, there were also problems in the distribution agreement of the TV drama Zhaos Orphan Case signed by General Wei of the League and TV Media (600088.SH). This divergence is reflected in the Beijing Arbitration Commission Award of July 2019 [(2019) Beijing Arbitration Word 0841], in which the Arbitration Letter demanded that the Alliance would pay 5.319 million yuan of China Television Medias bottom-guaranteed earnings and related interest.
The case began on June 8, 2012, when China Television Media signed the Agreement on Distribution Entrustment with Allied General Wei. The two sides agreed that the premium will be issued, guaranteeing a minimum profit of not less than 2.8 million yuan per episode, and then allocated by the two sides in accordance with the 15% and 85% proportions of the premium and CCTV media respectively. If the issuance income is not reached, the difference will be made up by Alliance General Wei Company. China Television Media failed to obtain the subsequent issuance from AU General Wei in accordance with the contract, and filed an arbitration application with Beijing Arbitration Commission.
In addition, there are many pending lawsuits. The judgment of the first instance of the lawsuit between Maojiangwei and Jiecheng Childrens Entertainment (Tianjin) Co., Ltd. has decided that Maojiangwei will return the license fee paid by the other party to 4.56 million yuan. There are still lawsuits between Maojiangwei and Tianjin Jiuhe Cultural Media Co., Ltd., Jiangxi Radio and Television Network Media Co., Ltd., and Chongqing Radio and Television Group Head Station, involving Tens of millions of dollars.
Allied General Weis many projects also left a bad debt that is difficult to recover for the contemporary East. Contemporary Oriental eventually charged these items to bad debts in 2018 and included them in its annual report.
Alliance General Wei awarded the game copyright of the online drama Warm Blood Changan to Muye Xingxing, forming an account receivable of 5 million yuan, with all bad debts charged in 2018.
The other is the agreement on entrusted service of the film You from Stars signed by Allied General Wei and Beijing Jinqiang Shengshi Cultural Communication Co., Ltd. on April 15, 2014. In addition, Jin Qiangshengshi owed the Alliance 9 million yuan for the investment of Wei in the movie Missing Love, which was converted into other receivables totaling 28.2 million yuan, all of which included provision for bad debts.
In 2014, Allied General Wei and Able Communications CO. Ltd signed an agreement on the legal and complete issuance right of Assigning You from the Stars in mainland China. But then copyright flaws triggered a lawsuit against Able Communications CO. Ltd for the return of the investment of 18.3 million yuan. However, the assets of the other party have been frozen for many rounds, and the company as a waiting frozen party has no executable assets for the time being, resulting in all impairment losses.
In 2016, Allied General Wei signed a joint investment agreement with Shaanxi Jiarun Cultural Media Co., Ltd. on the TV drama Midlife Crisis, which stipulates that the companys investment amount is 12 million yuan. This fund also includes all impairment losses.
In the Taiping Round project, which cooperates with Pentium, Ma, 10.9 million yuan of impairment loss of assets has also been formed.
The accounts receivable and other receivables for the above projects of AJV are charged to 120 million yuan of bad debts, equivalent to 55% of the total amount of contemporary Oriental accounts receivable and other receivables in 2018. The contemporary East also lost 340 million yuan in collective impairment of its inventory.
After the impairment of assets, the net profit of Allied General Weiwei still suffered a large loss. From 2014 to 2016, the actual net profit of Allied General Wei was 109 million yuan, 141 million yuan and 211 million yuan, respectively, corresponding to the completion rate of 109%, 104% and 106%. After the completion of performance betting, the alliance will make net profit of 109 million yuan in 2017, which is lower than that of the previous year. In 2018, the alliance will lose 493 million yuan.
The alliance listed the significant impairment of Weiweis assets as one of the reasons for the loss of 1.6 billion yuan in performance in 2018 by Contemporary Oriental. Contemporary Oriental said that in addition to the external economic and industrial policy environment changes and other factors, the poor sales of the Alliances TV dramas and films and the blockage of repayment also led to a decline in performance in 2018. These include the reduction of about 876 million yuan in goodwill and the reduction of inventory and prepaid accounts. In the announcement in July 2019, Contemporary Oriental disclosed that after 2019, Allied General Weis business will be transformed and no new drama will be invested. Liu Pei is a senior author of Qingliu Studio and resides in Beijing. Netease Cleanup Studio (Wangyiqingliu) products, unauthorized prohibition of reprinting. Qingliu Studio is the original financial investigation team of Netease Finance and Economics. Welcome to pay more attention to the Wechat Public Number. Source of this article: Clearance Responsible Editor: Yang Bin_NF4368
The alliance listed the significant impairment of Weiweis assets as one of the reasons for the loss of 1.6 billion yuan in performance in 2018 by Contemporary Oriental. Contemporary Oriental said that in addition to the external economic and industrial policy environment changes and other factors, the poor sales of the Alliances TV dramas and films and the blockage of repayment also led to a decline in performance in 2018. These include the reduction of about 876 million yuan in goodwill and the reduction of inventory and prepaid accounts.
In the announcement in July 2019, Contemporary Oriental disclosed that after 2019, Allied General Weis business will be transformed and no new drama will be invested.
Netease Cleanup Studio (Wangyiqingliu) products, unauthorized prohibition of reprinting. Qingliu Studio is the original financial investigation team of Netease Finance and Economics. Welcome to pay more attention to the Wechat Public Number.