The former Jade First Stock has now become Lao Lai. On the evening of September 23, Dongfang Jinyu (600086, SH) announced that the company had been listed on the list of discredited Executees by inquiring the public information of China Executive Information Open Network recently. Moreover, the announcement issued by the company on the same day also shows that the total principal amount of the litigation (arbitration) involved by Dongfang Jinyu is about 1012.7 million yuan.
In fact, Dongfang Jinyus debt problem has already appeared. As of April 18, 2019, the companys outstanding debts due amounted to 4.061 billion yuan. Because of the debt problem, creditors have applied for judicial restructuring of Dongfang Jinyu. Will the companys reorganization process be affected by the re-explosion of the mine?
The amount involved in litigation (arbitration) exceeded 1 billion yuan
According to Dongfang Jinyus announcement on the evening of September 23, the company was listed on the list of discredited executees, with 6 relevant enforcement courts, while the number of cases involved was 8.
Oriental Jinyu explained that the company was sued by the relevant debtors for disputes over financial loan contracts, private lending disputes and notarized creditors rights documents, demanding that the company fulfill its obligation to pay the effective legal documents. After losing the lawsuit in some cases, the company was listed because of the lack of liquidity and failed to fulfill the obligation of payment of effective legal documents within the time limit.
In addition to the above disputes, on the evening of 23rd, Dongfang Jinyu also issued a progress announcement of related party transactions. According to the announcement, Xu Xianmin signed a Loan Contract with listed companies, Xinglong Industries and Zhaoning on December 4, 2017. As stipulated in the contract, listed companies, Xinglong Industries and Zhaoning, as co-borrowers, applied to Xu Xianmin for RMB 400 million yuan, with a borrowing period of 2 months, starting from the date of actual lending. The purpose of borrowing is investment with interest rate of 1.67% per month.
The Supplementary Agreement stipulates that a listed company shall no longer act as a borrower of the Loan Contract and shall no longer assume any obligations concerning the borrower under the Loan Contract. If a listed company first liquidates all or part of the above debts, the listed company has the right to recover from Xinglong Industries and Zhaoning Industries. Xinglong Industries and Zhaoning should repay the companys payment within 90 days.
Corporate bankruptcy reorganization is uncertain
Through Xinglong Industries and Ruili Jinze, Zhaoning controls 36.11% of Dongfang Jinyus shares, which is the actual controller of Dongfang Jinyu, but bypasses the listed companies to sign loan contracts with others. In response to this matter, the Shanghai Stock Exchange has also written to inquire. In mid-August, Dongfang Jinyu responded that the loan is a unilateral financing act of Mr. Zhao Ning, executive director of Xinglong Industry and Xinglong Industry.
Zhao Ning has a lot of trouble. On July 18, 2019, the SFC issued a Notice of Investigation to Xinglong Industry, Zhao Ning, the legal representative of Xinglong Industry, and Lantian Corporation of China, as well as its related personnel, on matters related to the transfer of control rights of listed companies to China Lantian Corporation. As the above shareholders and related personnel are suspected of violating the law and regulations in information disclosure, the SFC has decided to investigate the above shareholders and related personnel.
Zhang Wenfeng, 54 years old, has many years of working background in the construction bank. He has been president of Dongfang Jinyu since August last year. On the day of announcing Zhang Wenfeng as president, Dongfang Jinyu also announced that the company signed a strategic cooperation agreement with Shenzhen Branch of China Construction Bank Co., Ltd. At that time, listed companies said, This is conducive to broadening financing channels, reducing financing costs and improving financing efficiency.
Can Zhang Wenfeng, who has worked in the bank for many years, solve the problems faced by listed companies? Reporters note that the first thing they have to face may be the bankruptcy reorganization of listed companies. According to the announcement, following Xinglong Industrials application for debt judicial restructuring of Listed Companies in January this year, the company was re-applied for restructuring by another creditor, First Fame Optical Control Asset Management Co., Ltd. in July.
What is the progress of Dongfang Jinyus reorganization at present? Will the explosion affect the companys restructuring process? Oriental Jinyu was not mentioned in the announcement. According to the semi-annual report of 2019 issued by Dongfang Jinyu, it is still uncertain whether Dongfang Jinyu, a subsidiary company of Shenzhen, has entered the reorganization process. If the judicial restructuring of debt can be carried out smoothly, it will help to improve the assets and liabilities structure of the company and resume normal operation. If not implemented smoothly, the company and its subsidiary, Shenzhen Dongfang Jinyu, will face the risk of being declared bankrupt.