According to the disclosed documents, the decision of delisting made by the SEC listing Qualification Committee is based on two reasons: according to the article 5101 of NASDAQ listing rules, the false trading behavior disclosed by Ruixing coffee on April 2nd caused public interest concerns; according to the article 5250 of NASDAQ listing rules, Ruixing coffee failed to disclose effective information in the past, and passed the previous The business model makes false transactions.
One year ago, on May 17, 2019, Ruixing logged into NASDAQ in only 18 months since its establishment, creating the fastest listing record of China in the United States.
In the early hours of the morning, Lu Zhengyao, chairman of Ruixing coffee, issued a statement saying that Nasdaq asked the company to withdraw from the market before the final results of the investigation. Unexpectedly, he was deeply disappointed and regretted.
Deeply disappointed and regretted to maintain the store operation
He also said that he firmly believed that the business model and business logic of Ruixing coffee were established, and the annual revenue of Ruixing coffee has continued to grow since its operation. My style may be too radical, the enterprise runs too fast, which also leads to many problems, but I do not cheat investors by concept. Lu Zhengyao said that the funds obtained from pledging Ruixing coffee shares are all used to support the operation and development of its enterprises, not for personal waste, not to transfer assets, and is willing to accept any investigation.
In addition, Lu Zhengyao also mentioned that if Ruixing leaves the market, the difficulties and pressure it will face will continue to increase, but in any case, it will try its best to maintain the store operation, try its best to recover the loss of shareholders, so that Ruixing brand can go on.
The following is the full text of Lu Zhengyaos statement:
1. Once again, I sincerely apologize to all investors, all employees and customers for the adverse impact of Ruixing coffee incident! Based on the respect for the investigation of the special committee, I have never responded to any medias query on my own about the Ruixing coffee incident, and therefore let my friends who helped me start my business bear many unnecessary charges. At the same time, I solemnly apologize to them and believe that the final investigation can give everyone an objective and fair evaluation.
2. According to the public disclosure of Ruixing coffee, at present, the company has also dealt with relevant responsible persons, reorganized the board of directors, updated the management and actively carried out rectification according to the phased investigation results. However, NASDAQ asked the company to delist before the final investigation results, which is unexpected. I am deeply disappointed and regretted.
4. I firmly believe that Ruixing coffees business model and business logic are established. Since its operation, Ruixing coffees annual revenue has continued to grow. At present, despite the double blow of the epidemic and fraud, thousands of Ruixing stores are still trying to adhere to the operation, tens of thousands of employees are still working diligently, Ruixings product reputation is very good and brand toughness, sincerely ask all sectors of society to give tolerance and support, I thank you here!
5. Since I started my business, almost all of the money I earned has been invested in the real enterprises. The money I got from pledging Ruixing coffee stock has also been used to support the operation and development of its various enterprises. It has not been used for personal extravagance, nor for the transfer of assets. I am willing to accept any investigation on this.
6. Over the past month, I have been in deep pain and remorse, unable to sleep at night. If the company delisted, the difficulties and pressure will continue to increase, but no matter what, I will try my best to maintain the store operation, try my best to recover the loss of shareholders, so that the brand of Ruixing can go on.
Finally, once again sincerely apologize to all sectors of the society for the adverse impact of the incident!
NASDAQ responds to Ruixings delisting
Lucky coffee shares will resume trading at 7 p.m. on Wednesday
Ruixing coffee shares will resume trading at 7:00 a.m. EDT on May 20 (19:00 GMT on May 20). Its shares have been suspended since April 7 after the company launched an investigation into the forgery and apologized. Before the suspension, the share price plummeted more than 75% in one trading day due to disclosure of trading fraud.
The announcement comes at a time of rising economic tensions. NASDAQ plans to tighten Listing Rules for companies from China, France and other markets that involve national security or have laws restricting access to information by US regulators. According to the announcement, NASDAQ also plans to set minimum financing scale and requirements for circulating shares.
Ruixing CEO Qian Zhiya is dismissed due to financial fraud
According to the latest shareholder information of Ruixing coffee, Lu Zhengyao currently holds forty-eight point four nine Billion B shares, including common B shares 39.12% , owned by 36.86% The right to vote is the largest shareholder.
But after the black swan incident, foreign media quoted Goldman Sachs Group as saying that Haode investment, controlled by Chairman Lu Zhengyao, failed to fulfill one five point one eight US $billion margin loan plan, the lender will exercise the lenders right to take enforcement procedures to sell 76.3 million shares of Ruixing coffee us ADSS.
According to the announcement, Ruixings board of directors appointed Guo Jinyi, a director and senior vice president, as acting CEO of Ruixing. Guo Jinyi, like Qian Zhiya and Liu Jian, is also Lu Zhengyaos Shenzhou Department general. He used to be chairman assistant of Shenzhou Youche. In May 2018, during the storm of Ruixing informing Starbucks of industry monopoly, Guo Jingyi once made a high-profile statement that Ruixing coffee has no intention of speculation.
240 institutions affected
As for whether Ruixing coffee is facing bankruptcy, according to relevant lawyers, being delisted will have a significant adverse impact on Ruixing coffee, especially in terms of financing, which will indeed increase the possibility of bankruptcy of the company.
According to statistics, as of the end of the first quarter, there were 240 institutions holding Ruixing coffee, accounting for up to 34.43% u3002
According to tiger trade data, as of May 1, traditional investment managers held by capital research and management companies one thousand and eight point seven seven 10000 shares, holding ratio of 3.98% ;
Next are Bank of America and BlackRock, holding four hundred and ninety-seven point three seven 10000 shares and four hundred and eighty-three point eight two Ten thousand shares with shareholding ratio of 1.96% and 1.91% ;
In terms of hedge funds, Melvin capital, Renaissance and tybourne capital also hold more than 2 million shares of Ruixing coffee.
In terms of venture capital / private equity, Dazheng capital holds one thousand eight hundred and nine point seven three 10000 shares, holding ratio of 7.15% ;
In terms of investment banks, Morgan Stanley holds lucky coffee three hundred and sixty-four point nine one 10000 shares, holding ratio of 1.44% ;
Haina international group and JPMorgan Chase also hold one hundred and seventy-eight point eight five 10000 shares and one hundred and fifty-nine point two six 10000 shares;
Comments of netizens
Extended reading: Kangmei Pharmaceutical Co., Ltd. was fined RMB 30 billion for counterfeiting, and then its trading limit was increased by RMB 600000. But Ruixing was facing delisting. Lu Zhengyao spoke late at night: it was not to cheat investors by concept NASDAQ on Ruixings delisting response: all companies will follow the uniform rules. Source: China fund Journal: Taylor, editor in charge: Wang Xiaowu_ NF