Qianshan Pharmaceutical Machinery Co., Ltd. is suspected of financial fraud and is about to withdraw from the market. The shareholders claim for compensation or have no result

category:Finance
 Qianshan Pharmaceutical Machinery Co., Ltd. is suspected of financial fraud and is about to withdraw from the market. The shareholders claim for compensation or have no result


For the shareholders of Qianshan Pharmaceutical Machinery Co., Ltd., it is an important step for them to bring the listed company to the court and participate in the claim. However, in the view of many lawyers, it is more and more difficult to claim for delisted listed companies.

Zang Xiaoli, a lawyer from Beijing Yingke Law Firm, told Securities Daily that there are risks for investors to participate in claims of listed companies like Qianshan pharmaceutical machinery, which are suspected of major violations leading to delisting. The risk is that the investor wins the lawsuit and doesnt necessarily get the money.

Suspected of multiple violations

Probability of delisting or success

According to the announcement issued by Qianshan Pharmaceutical Machinery Co., Ltd., the notice of administrative punishment and market prohibition issued by CSRC shows that the company fictitious sales receipts, fictitious reduction of accounts receivable and bad debt reserves, fictitious increase of sales revenue, resulting in a fictitious increase of profit of 79.505 million yuan in 2015, accounting for 95.76% of the total profit disclosed in the annual report of that year. Qianshan Pharmaceutical Machinery Co., Ltd. falsely increased construction in progress, decreased accounts receivable and bad debt reserves, falsely increased sales revenue, resulting in a total of 357.33 million yuan of falsely increased profits in 2016, accounting for 160.05% of the total profits disclosed in the annual report of that year; in 2017, it failed to fulfill the temporary reporting obligation for the funds of the company occupied by related parties for non business purposes.

According to the notice of administrative punishment and market prohibition in advance, Liu Xianghua and Liu Huashan are superior to the companys internal control, control the companys capital flow, make decisions and organize the implementation of the related partys capital occupation and fund income and expenditure of unknown reasons with large amount of violation of Qianshan pharmaceutical machinery. They occupy the companys capital in a large amount in violation of the regulations, with obvious subjective intention, huge amount involved and illegal circumstances Seriously, the person in charge who is directly responsible for the illegal act of information disclosure in the interim report of Qianshan Pharmaceutical Machinery Co., Ltd.

According to Qianshan Pharmaceutical Machinery Co., Ltd. and relevant parties, the company and some of them will make statements, defend and require hearings on the administrative penalties to be imposed by China Securities Regulatory Commission.

The possibility of Qianshan pharmaceutical machinery delisting has aroused concern. It is understood that the companys net assets in 2018 are negative through audit, and the 2017 and 2018 financial and accounting reports are issued by certified public accountants with audit reports that cannot express opinions. According to articles 13.1.1 and 13.1.6 of the GEM Listing Rules and the review opinions of the Listing Committee of Shenzhen Stock Exchange, the listing of the companys shares has been suspended since May 13, 2019.

In addition, according to the announcement of Qianshan Pharmaceutical Machinery Co., Ltd. on December 2, 2019, according to the facts identified in the prior notice, the companys net profit for four consecutive years from 2015 to 2018 was actually negative, which touched on the situation of major illegal forced delisting.

Shenzhen Stock Exchange said that in this case, the companys current delisting procedures for financial indicators will overlap with possible major illegal compulsory delisting procedures. In accordance with the principle of touch is applicable, the bourse will start the listing termination procedure when any of the circumstances trigger the listing termination conditions, and make the listing termination decision in accordance with the regulations.

More lawsuits involved

Investor claims or hopelessness

In recent years, there are more and more lawsuits.

According to Tianyan data, since 2017, there have been more and more court announcements related to Qianshan pharmaceutical machinery, including 5 in 2017, 16 in 2018, 20 in 2019 and 383 in judicial documents. Among them, the disputes of sales contract and labor dispute are relatively high.

On November 21, Qianshan Pharmaceutical Machinery Co., Ltd. issued a notice on new litigation matters of the company. The company said that it has received relevant legal documents from Changsha intermediate peoples Court of Hunan Province and Shunde District Peoples Court of Foshan City of Guangdong Province. In one case, the plaintiff requested the defendant qianshanyao machine to pay the plaintiff the interest, stamp duty and Commission for the loss of investment balance caused by false statement, totaling 65244.9 yuan. It also requested the defendant to bear the litigation cost and guarantee fee related to the case The total cost of. In case 3, the plaintiff, Foshan Shunde high tech Industrial Development Zone Management Committee, required the defendant, Guangdong Qianshan Medical Device Technology Co., Ltd., to pay the plaintiff a penalty of 5335387600 yuan (calculated according to the standard of 133384.69 square meters * 400 yuan / square meter of the project land area), etc. Guangdong Qianshan medical equipment Technology Co., Ltd. is a subsidiary of Qianshan Pharmaceutical Machinery Co., Ltd.

Qianshan Pharmaceutical Machinery Co., Ltd. said that the above-mentioned related litigation is still in the trial stage and has not produced a legally effective judgment or ruling, so the company is unable to judge its impact on the current profits or the future profits at present. The company attaches great importance to relevant litigation cases, will hire a professional legal team to actively respond to the lawsuit and do its best to protect the legitimate rights and interests of the company and all shareholders.

Data shows that as of September 30, Qianshan Pharmaceutical Machinery Co., Ltd. had 48200 shareholders. For some investors, litigation is a way to recover losses.

However, some lawyers are not positive about such lawsuits. For a company like this, it will take at least two or three years for investors to claim compensation, even if they win a lawsuit, they wont get much money, a rights lawyer told Securities Daily. In the past two years, at least five or six investors of listed companies have won the lawsuit and wont get the compensation, so the implementation is far away. According to the first three quarters report of 2019 issued by Qianshan Pharmaceutical Machinery Co., Ltd., the net profit attributable to the shareholders of the listed company from January to September this year was 473 million yuan, down 17.28% year on year. In addition, the companys net assets are -2.27 billion yuan, and there are large overdue debts outstanding. Listed companies may not have the ability to pay, and they may suffer losses in the end if they work hard to fight a lawsuit. An unnamed lawyer told reporters. Source: responsible editor of Securities Daily: Yang qian_nf4425

However, some lawyers are not positive about such lawsuits. For a company like this, it will take at least two or three years for investors to claim compensation, even if they win a lawsuit, they wont get much money, a rights lawyer told Securities Daily. In the past two years, at least five or six investors of listed companies have won the lawsuit and wont get the compensation, so the implementation is far away.

According to the first three quarters report of 2019 issued by Qianshan Pharmaceutical Machinery Co., Ltd., the net profit attributable to the shareholders of the listed company from January to September this year was 473 million yuan, down 17.28% year on year. In addition, the companys net assets are -2.27 billion yuan, and there are large overdue debts outstanding.

Listed companies may not have the ability to pay, and they may suffer losses in the end if they work hard to fight a lawsuit. An unnamed lawyer told reporters.