The black hole of financing and trade of Guangzhou Langqi

 The black hole of financing and trade of Guangzhou Langqi

On the evening of November 17, Guangzhou Langqi disclosed that due to the shortage of funds, the company and its subsidiaries debts of 704 million yuan were overdue, accounting for 36.88% of the companys latest audited net assets. Beijing Business Daily reporter called the relevant person in charge of Guangzhou Langqi, but as of the time of publication, the phone was not connected.

At the same time, Guangzhou Langqi also disclosed that 11 new bank accounts of the company and its subsidiaries were frozen, with the amount of RMB 16.162 million frozen. Up to now, a total of 39 accounts of Guangzhou Langqi and its subsidiaries have been frozen, of which 23 accounts are caused by the companys disputes with Jiangsu Baohua international and Jiangsu MCC chemical. As of the announcement date, Guangzhou Langqi has frozen a total of 98 million yuan.

Affected by the bad news, Guangzhou Langqi opened high and went low on November 18, hitting a minimum of 4.15 yuan / share, and finally closed down 5.19% to 4.2 yuan / share.

On the evening of November 17, Guangzhou Langqi also issued a notice concerning litigation, in which the company, as plaintiff, placed Nantong Xinqian Chemical Co., Ltd. (hereinafter referred to as Xinqian company), Nantong fuze Chemical Co., Ltd. (hereinafter referred to as fuze company), Nantong Fuxin Chemical Co., Ltd. (hereinafter referred to as Fuxin Company) and Rudong Taibang Chemical Co., Ltd Four enterprises of the company (hereinafter referred to as Rudong Taibang) appealed to the court for payment of principal and liquidated damages.

According to the contract contents disclosed by Guangzhou Langqi, the industrial raw materials sold by the company to the above four companies are industrial raw materials.

It is not difficult to see from the above transactions that Guangzhou Langqi only acts as a middleman, and the above transaction is also known as financing trade by the market.

Wang Jiyue, a well-known investment bank personage, said in an interview with Beijing Business Daily that the essence of financing trade is financing, and trade is only for collateral or credit enhancement. If there is no false VAT invoice, it is a legal act. From the perspective of purchasing industrial raw materials from Baohua company and MCC, Baohua company and MCC company will pledge the commercial acceptance bill issued by Guangzhou Longqi to financial institutions for financing.

Wang Ji leapt forward and pointed out to the Beijing Business Daily reporter that if there is no trade-based basis, only financing, fictitious transactions, warehouse receipts, and borrowing money is not enough, it is easy to cause risk problems.

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In addition to debt, bank accounts have been frozen, Guangzhou Langqi has long been in financial crisis. In March 2019, Guangzhou Langqi was accused of being in arrears of nearly ten million US dollars.

In addition, the former chairman of Guangzhou Langqi was also investigated recently for suspected violations of discipline and law. On November 4, the supervision commission of Guangzhou Municipal Commission for Discipline Inspection announced a notice on its website that Fu Yongguo, member of the Party committee and deputy general manager of Guangzhou Light Industry and Trade Group Co., Ltd., is suspected of serious violation of discipline and law, and is currently under disciplinary review and supervision investigation by the supervision commission of Guangzhou Municipal Commission for Discipline Inspection.

According to the public information, Guangzhou Longqi parent company is the Guangzhou Light Industry and trade group. It was the first company mainly engaged in the production and marketing of daily chemical products and chemical raw materials. Its two major washing products brands, Langqi and gaofuli, have a wide user base.

According to the public financial data, as of the third quarter of 2020, the total liabilities of Guangzhou Langqi reached 7.77 billion yuan, including 419 million yuan of long-term loans and 3.079 billion yuan of short-term loans, while the monetary capital of the company was only 746 million yuan. In the first half of this year, the operating revenue of Guangzhou Langqi was 3.888 billion yuan, a decrease of 43.36% compared with the same period of last year; the net profit changed from profit to loss, with a loss of 115 million yuan; the net profit of the same period of last year was 26.15 million yuan, a year-on-year decrease of 538.66%. In the first three quarters, Guangzhou Langqi continued to suffer losses, and its net profit fell by 2878.65% to 1.17 billion yuan.

However, in recent years, due to the increasingly fierce competition in the field of washing products, Guangzhou Langqi began to seek diversified development. In 2013, Guangzhou Langqi acquired Jiangsu Qiheng Agricultural Chemical Co., Ltd. and set foot in the agricultural pharmaceutical industry. In 2018, Guangzhou Langqi plans to purchase 97.42% shares of Baihua flavor held by light industry group with cash of 188 million yuan, and purchase 100% shares of Huatang food held by Huaqiao sugar factory and light industry group with cash of 430 million yuan. However, in September 2019, Guangzhou Langqi plans to terminate the acquisition of 97.42% equity of Baihua flavor due to the fact that the equity delivery of Baihua flavor has not been completed and some accounts receivable are difficult to recover.

Source: Beijing business daily Author: Bai Yang Ma changes Wang Xiao, responsible editor: Wang Xiaowu_ NF