Will Wangfujing be licensed as a tax-free operator? Why is it an exception?

category:Finance
 Will Wangfujing be licensed as a tax-free operator? Why is it an exception?


Things are very simple. Wangfujing began to rise on April 29. After the closing of the trading limit on June 9, Wangfujing issued a notice saying that Wangfujing company received the notice of the Ministry of Finance on the operation qualification of tax-free products of Wangfujing Group Co., Ltd. forwarded by the controlling shareholder Beijing Capital Tourism Group Co., Ltd. on June 9, granting the company the operation qualification of tax-free products, and allowing The company is engaged in tax-free retail business. That is to say, it is qualified as a tax-free operator. Wangfujing has become the eighth enterprise with a tax-free license, following China tax exemption, Japan tax-free Bank (which has been acquired by China tax exemption), Shanghai Tax Exemption (which has been injected into CITS), Zhuhai tax exemption, Shenzhen tax exemption, China export service and overseas Chinese.

Since then, Wangfujing has been trading for 4 consecutive days. During this period, the SSE issued a letter of inquiry to Wangfujing to explain whether there was any early disclosure of inside information, including planning, application, approval and other stages. Wangfujing issued a notice after self inspection, saying it did not.

In fact, in the course of more than a months rise, the rumor that Wangfujing has obtained the qualification of tax-free products has been repeatedly mentioned by the market. There are more and more questions about the internal transactions caused by the leakage of Wangfujing tax-free qualification.

Looking at Wang Fujings reply to the Shanghai Stock Exchange, we can see that the suspicious event includes at least two acts.

First, the time when the holding holding holding of dongshoulv group is increased coincides with the time when the tax-free qualification is applied for. At the beginning of 2019, Wangfujing carried out the collection, collation and research of tax-free operation related data; in April 2019, the company and its controlling shareholder, ShouLv group began to declare the tax-free operation qualification business. During the period from February 11 to May 11, 2020, CITS group increased its holding of more than 810000 shares of Wangfujing with its own funds, accounting for 0.1% of the total issued shares of the company. As of May 11, CITS held 26.83% of Wangfujing shares.

Second, Wangfujing continued to rise for no reason since the beginning of May, with the share price rising all the way from 12.39 yuan to 27.38 yuan on June 9, up 121%. After the trading on June 9, it was trading for 4 consecutive days. From April 29 to June 15, the increase was 224%. Yang Zhaoquan, the director of Beijing Weinuo law firm, said, in the days before the release of Wang Fujings major insider information, the stock rose by a large margin of 120%, and that days trading limit rose. From the analysis of the logic and experience of the securities market, the only possibility is that the inside information is leaked in advance, and there is almost no other exceptional possibility.

There are at least the following problems in the above two suspicious behaviors:

First of all, is the application for tax-free business qualification classified as a confidential act? In April 2019, the first brigade began to apply for tax-free business qualification. Is this classified as a confidential act? Should it be announced?

Secondly, on May 28, Wang Fujing responded to the rumor that the controlling shareholder had applied for a tax-free license, saying that he had not heard about the relevant situation for the time being. The reason Wang Fujing explained this response was that the company did not know the progress of the business qualification of declaring duty-free products at that time. Relevant personnel did not participate in the operation qualification work of declaration of duty-free products. This description is to show that the company does not know the situation of the controlling shareholders. Is it suspected of false statements?

Second, why does the Ministry of finance not publish the tax-free license?

At present, the qualification of tax-free products is strictly and uniformly approved by the state, with the Ministry of Finance and other departments taking the lead. The relevant person in charge of the enterprise department of the Ministry of finance has previously said that the management of duty-free stores in China is mainly based on the relevant provisions on Further Strengthening the centralized and unified management of duty-free businesses jointly issued by the Ministry of finance, the General Administration of customs, the State Administration of Taxation and the State Tourism Administration, and the measures for the supervision of duty-free stores and duty-free products of the General Administration of customs mainly focus on the supervision of the customs From the perspective of duty-free shop management made provisions.

On June 10, 1987, the general office of the State Council issued the reply on Shenzhen Municipal Peoples governments pilot operation of state-owned foreign currency duty-free shopping malls in Shenzhen Special Economic Zone, stating that the State Council agreed to pilot the operation of state-owned foreign currency duty-free shopping malls in Shenzhen Special Economic Zone. In the process of trial operation, management should be strengthened, experience should be summed up, problems should be corrected in time to avoid loopholes.

On February 12, 1988, the general office of the State Council issued the reply on the trial operation of state-owned foreign currency duty-free shopping malls in Zhuhai Special Economic Zone, stating that the State Council agreed to the trial operation of state-owned foreign currency duty-free shopping malls in Zhuhai Special Economic Zone. In the process of trial operation, management should be strengthened, experience should be summed up carefully, problems found should be corrected in time, and loopholes should be avoided.

In 2011, the Ministry of Finance issued the announcement that the state approved the establishment of Hainan tax-free Products Co., Ltd. and granted the franchise right for tax-free products, saying that the Ministry of finance, together with the Ministry of Commerce, the General Administration of customs and the State Administration of Taxation, reviewed and approved the establishment plan and articles of Association for the establishment of Hainan tax-free Products Co., Ltd. funded by the wholly state-owned enterprises of Hainan Province, allowing Hainan tax-free Products Co., Ltd. to Hainan Province to carry out the operation of the state approved off Island duty-free products, construction of duty-free shops and other related businesses.

However, no matter from which point of view, there is no trade secret, causing damage to the third party. And tax exemption qualification application is a normal procedure, not a business thing.

Third, why does the CSRC not actively supervise?

Whether there is a leak in Wangfujing has become the focus of the market. The CSRC should take the initiative, rather than face the challenge, and only issue a letter of inquiry from the Shanghai Stock Exchange, and then let Wangfujing ask himself to answer, which is difficult to convince the public and explain the market behavior of distorting the rise.

Zero tolerance in the nine character policy of building system, non intervention and zero tolerance in the capital market means to crack down on the companys leakage of secrets. If there is no behavior, how to build confidence?

[1] Announcement of Wangfujing on the companys qualification of tax-free products

https://www.sse.com.cn/disclosure/listedinfo/announcement/c/2020-06-10/600859_ 20200610_ 1.pdf

[2] Reply notice of Wangfujing on the supervision work letter on matters related to the operation qualification of duty-free products

https://www.sse.com.cn/disclosure/listedinfo/announcement/c/2020-06-12/600859_ 20200612_ 1.pdf

https://www.mof.gov.cn/gkml/zfxxgkgd2016/202005/t20200511_ 3511316.htm

[4] Circular of the peoples Republic of China on printing and distributing the Interim Measures for the administration of duty free outlets at ports

https://nmg.mof.gov.cn/lanmudaohang/zhengcefagui/201908/t20190801_ 3345065.htm

[5] Cai Wai Zi [2000] No. 1 notice of the Ministry of finance, the General Administration of customs, the State Administration of Taxation, and the State Tourism Administration on printing and distributing the request for further strengthening the centralized and unified management of tax-free business

https://www.waizi.org.cn/tax/48745.html

Ministry of finance, Ministry of Commerce, General Administration of customs, State Administration of Taxation, State Tourism Administration

[6] Notice on printing and distributing the Interim Measures for the administration of duty free entry stores at ports CGS [2016] No.8

https://www.chinatax.gov.cn/n810341/n810755/c2026931/content.html

Ministry of finance, Ministry of Commerce, Ministry of culture and tourism, General Administration of customs, State Administration of Taxation

[7] Notice on printing and distributing the supplementary provisions of the Interim Measures for the administration of duty free entry stores at ports CGS [2018] No.4

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