The arbitration result may reduce the net profit by 71 million yuan
On the evening of December 1, Guangzhou Langqi Industrial Co., Ltd. (hereinafter referred to as Guangzhou Langqi or the company) announced that on November 30, the company received the civil ruling served by the fourth intermediate peoples Court of Beijing. The fourth intermediate peoples Court of Beijing Municipality ruled to reject the companys application for cancellation of the (2020) China International Trade Commission jingzhuzi No. 0731 ruling. The implementation of the arbitration result may reduce the net profit of the company by 71.038 million yuan, and the specific amount affected shall be subject to the final audit result.
The dispute began two years ago.
From January to October 2018, according to the contract signed by Xingfa Hong Kong import and Export Co., Ltd. (hereinafter referred to as Xingfa Hong Kong) and Guangzhou Langqi, 21 transactions have taken place between the two parties. Among them, Xingfa Hong Kong pointed out that seven transactions had transferred the ownership of goods to Guangzhou Langqi in accordance with the sales contract signed by both parties. However, Guangzhou Langqi failed to pay for the goods on the ground that they could not take delivery of the goods. In this regard, Xingfa Hong Kong pointed out that Guangzhou Langqis failure to pay off the payment in accordance with the contract constituted a breach of contract and filed an arbitration with the China International Economic and Trade Arbitration Commission.
In July this year, Guangzhou Langqi received the ruling issued by the Trade Arbitration Commission. According to the latest ruling of the Trade Arbitration Commission, Guangzhou Langqi paid Xingfa Hong Kong $9.3688 million, and compensated for the interest loss of delayed payment.
According to the announcement on December 1, at that time, the company chose: first, to apply for not to enforce the arbitration award; second, to apply for cancellation of the arbitration award. The company sued Xingfa Hong Kong for cancellation of the arbitration award and obtained the acceptance notice served by the court in mid August this year. Subsequently, Xingfa Hong Kong filed an application for enforcement to the court. In late October, the company received the courts enforcement ruling and enforcement notice, and decided to enforce the case. However, the company refused to accept the case and sued Xingfa Hong Kong again to apply for cancellation of the arbitration award.
Finally, on November 30, the company received the civil ruling served by Beijing Fourth intermediate peoples court. The fourth intermediate peoples Court of Beijing Municipality ruled to reject the companys application for cancellation of the (2020) China International Trade Commission jingzhuzi No. 0731 ruling.
According to public information, Guangzhou Langqi, formerly known as Guangzhou hardening oil factory, was founded in 1959. It is one of the earliest detergent enterprises in South China. It is mainly engaged in the production, manufacture and trade of daily chemical products, industrial refining additives and other products.
Guangzhou Langqi responds to huge amount of money from heaven
Not long ago, Guangzhou Langqi just finished a financial suspense drama.
On the evening of November 13, the company announced that in December 2019, the company and Guangzhou land development center signed the state owned land use right collection and storage compensation agreement, which agreed that nearly 120000 square meters of land meet the transfer conditions, which will increase the companys pre tax profit of about 2.247 billion yuan in 2020.
The Tianjiang huge sum of 2.247 billion yuan has also attracted the attention of Shenzhen Stock Exchange. According to the letter of concern of Shenzhen Stock Exchange, Guangzhou Langqi said in the relevant notice announcement disclosed in December 2019 that the expenses related to land acquisition and storage will be included as special accounts payable, deferred income and capital reserve according to relevant accounting standards. Shenzhen Stock Exchange asked Guangzhou Langqi to explain the basis for accounting treatment of land acquisition and storage, whether it involves the correction of errors in previous years, whether there is insider trading, and whether the information is not disclosed in time.
In response to the Shenzhen Stock Exchanges inquiry, Guangzhou Langqi said in its reply to the announcement on November 26 that the change in accounting treatment of the companys land acquisition and storage matters had no impact on the companys net assets and net profits in 2018 and 2019, and did not constitute a major early-stage error, and there was no need for retrospective restatement. Therefore, it did not involve the error correction of previous years.
Guangzhou Langqi also said that the company had obtained the confirmation letter of land transfer from Guangzhou land development center on October 29. According to the agreement, Guangzhou land development center should pay the company 431 million yuan reward for early land delivery before December 28, 2020. The above matters touch the relevant disclosure provisions, but the company failed to make accurate judgment on the behavior nature of the land transfer confirmation, resulting in the failure to timely disclose, and there is indeed a problem of untimely disclosure.
Now there are four more lawsuits
Since the second half of this year, Guangzhou Langqi has frequently exposed its financial problems, which has aroused widespread concern in the market.
First, on September 27, the company disclosed that a total of 572 million yuan of inventory stored in the two warehouses had disappeared. After receiving the concern letter from the Shenzhen Stock Exchange, the company found that the actual inventory with inconsistent accounts amounted to 867 million yuan.
Secondly, the company said in reply to the concern letter of Shenzhen stock exchange that, according to the companys self-examination statistics, as of September 30, 2020, the book balance of trade business receivables of the company was 3.066 billion yuan, of which the overdue amount was 2.635 billion yuan. At the same time, 961 million yuan of trade business prepayment was over 90 days old. If it can not be recovered or recovered, the company may draw a large amount of bad debts get ready.
In addition, the company has repeatedly disclosed and announced that due to the shortage of funds, the companys debts in several financial institutions have been overdue. As of November 17, 2020, the overdue debts of the company and its subsidiaries totaled 704 million yuan, accounting for 36.88% of the latest audited net assets of the company. At the same time, due to the debt overdue problem, 39 bank accounts of the company have been frozen, including the accumulated capital of 98 million yuan.
On November 9, Guangzhou Langqi announced that Guangdong securities regulatory bureau decided to take administrative supervision measures with warning letters against Guangzhou Langqi, Zhao biqiu, Zhong Lianjun, Tan Xiaopeng and Li Yanmei due to the failure to timely disclose the default of major debts due and the failure to fully disclose the risks involved in relevant inventories.
Now, there are four lawsuits. On the evening of November 17, Guangzhou Langqi issued a notice concerning litigation. As the plaintiff, the company sued Nantong Xingan Chemical Co., Ltd., Nantong fuze Chemical Co., Ltd., Nantong Fuxin Chemical Co., Ltd. and Rudong Taibang Chemical Co., Ltd. to the court for payment of principal and liquidated damages.
Due to all kinds of negative effects, the companys share price fell to 3.34 yuan / share on November 2, more than half of the average price of about 8 yuan at the beginning of the year, reaching the lowest level in nearly ten years.
Source: China Fund News Editor in charge: Yang Bin_ NF4368