Experts: Ruixings high-level restructuring is conducive to investigation and responsibility

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 Experts: Ruixings high-level restructuring is conducive to investigation and responsibility


Miao Yinzhi

Ruixing coffee admits that it has been counterfeiting for more than one month. Since April 6, its shares have been four point three nine The dollar has been closed so far. On the evening of May 12, the company announced that Qian Zhiya, the former chief executive, had been suspended according to the information provided by the Special Committee on the investigation of fraudulent transactions. At the beginning of April, Liu Jian, the chief operating officer (COO) and six employees who participated in or knew the fraud were also suspended or on leave.

Ruixings controller is Shenzhou car rental department. At present, Guo Jinyi, director of Shenzhou department, takes over as CEO, and two non Shenzhou department vice presidents enter the board of directors. This may be the companys efforts to get rid of the shadow of the past, but also a helpless move. Several directors and executives have left the company in the past month.

Obviously, with the destruction of the myth of business model, Ruixings business prospects have been very bleak. However, the companys top restructuring still has practical significance.

First of all, this will be conducive to maintaining the basic operation of the company and cooperating with the investigation so as to effectively assume the follow-up responsibilities. Modern companies are a collection of large natural people. Legal person may be an entity in law, but in the end, natural person is doing things. After encountering such a critical attack, Ruixing still has many practical constraints to deal with, even though he can say that death is not enough. Ruixings store is still in normal operation and the supplier is still supplying. If the company has debts to employees, suppliers, etc., it may have claims to be recovered externally, and the stock assets need to continue to maintain and increase value. As long as Ruixing does not declare bankruptcy for a day, it is still necessary to properly carry out the operation. After China Securities Regulatory Commission, State Administration of market supervision and other departments have settled in for investigation, it is also necessary for someone to sort out account books, answer questions and provide information.

After the companys major scandals, the worst result is the fall of the monkey, everyone coax away, resulting in the loss of assets and documents, and the relevant subjects can not be compensated. Therefore, the law imposes the duty of guarding the aftermath on the directors. But directors and executives cant just be bare handed and gather a group of employees to continue to maintain and generate cash income, which is the best for the interests of all parties.

Secondly, it will be conducive to the accountability of the former CEO and other key personnel. Although Ruixing has previously put out the original coo as the principal offender of fraud, Ruixings financial fraud has a large scale and a long time, and the result of fraud maintains the companys own human establishment. The original COO of the post-80s only holds more than 40000 shares of options, and the direct benefit of counterfeiting is not great. This series of behaviors are that a few people are not likely to carry out secret activities for their own interests, and the probability of counterfeiting can be defined as corporate behavior.

Even if the CEO is not behind the scenes, he has obvious responsibility for oversight. Even if he will not be prosecuted for criminal responsibility, he will not escape civil liability. The CEO and CFO of Ruixing were also named as co defendants in the group action of Securities Misrepresentation filed by American investors.

As the matter sued in this case is not an error caused by the companys normal business conduct, but a serious illegal act not allowed by the companys normal rules. The greater the personal fault and responsibility of CEO, the smaller the liability of company as a legal person, there is a certain conflict between them. Therefore, even if the original CEO is still innocent, his departure from the post is also conducive to the further development of the companys internal investigation, restore the truth and clarify the responsibility.

In fact, relatively speaking, Ruixings high-level restructuring has come a little late. A comparable example is that on August 31, 2001, Netease, a Chinese concept stock listed in the United States, admitted that the revenue of the previous years financial statements was overvalued by 4.3 million US dollars, which led to Shareholder Class Action and stock suspension. By September 11, the original CEO and chairman of the company resigned to show responsibility. Of course, the cash flow of Netease itself is stable, and the overestimation of income is mainly due to the violation of accounting recognition. The company finally reached a settlement with the SEC and the civil plaintiff, and Netease shares returned to a high position.

In contrast, Ruis movements are somewhat slow. I dont know if this shows that the companys internal high-level struggle is fierce. Lu Zhengyao, chairman of the company and the head of Shenzhou car rental department, is no longer listed on the latest corporate governance committee of the board of directors. Previously, on April 10, the legal representative of car rental in Shenzhou changed. The next step is also noteworthy. Im afraid the future of little blue cup is not clear. But at present, the companys claim to reshape corporate culture and maintain business stability seems to be intended for the long term, which is ultimately a positive signal. If it can be contracted into a medium-sized coffee shop of second and third tier, or even change its brand, it may be the way to survive. Whether this vision can be realized or not, its current posture is still beneficial to the process of law enforcement and justice and investor rights protection. (the author is an associate professor of Law School of Central University of Finance and Economics) source: economic observation network editor in charge: Ding Guangsheng, nt1941

(the author is an associate professor of Law School of Central University of Finance and Economics)