*ST Gaosheng (000971): Actual Control Or Change.

Original title: the holding of major shareholders will be re auctioned by the judicial *ST.

What is the future direction?

*ST rises or controls.

In July 2nd, the reporter was informed that the *ST largest shareholder, Beijing Yu Chi Reed Investment Co., Ltd. (hereinafter referred to as "Yu Chi Reed") held a *ST high rise of over 101 million shares of tradable shares to be auctioned by law. The second intermediate people's Court of Beijing (hereinafter referred to as "the second middle court of Beijing") is scheduled to open from 10 hours in July 30, 2019 to 10 hours in July 31, 2019 (except for delay). It is open to auction companies's largest shareholder, Yu Chi Reed, holding 101250396 shares of tradable shares in *ST on the judicial auction network platform of Beijing second intermediate hospital in Beijing.

*ST Gao Sheng director of the office of the relevant persons explained: "Yu Chi Reed holding *ST Gaosheng shares were auctioned, the shareholders were prosecuted by creditors, the court decided to enforce the mandatory."

Statistics show that Yu Chi Reed and *ST's second largest shareholder, LAN Ding Industrial (Hubei) Co., Ltd. (hereinafter referred to as "blue tripod industry") are controlled by the same practical controller, Wei Zhenyu. Wei Zhenyu is *ST senior controller, Li Yao is the company's chairman, Wei Zhenyu's cousin Sun Peng is also a member of the board.

Prior to this, the rise of *ST, controlled by the Wechsler family, was plunged into financial difficulties and debt ridden litigation. For many times failing to fulfill the relevant approval procedures of the company, without the approval of the board of directors, unlawfully using the company's official seal, contract seal and financial special seal, illegally and illegally representing the company on behalf of the company, signing the loan contract and guarantee contract, etc., and appropriated the huge amount of funds for the listed company and the illegal external guarantee and illegal borrowing for the actual controller Wei Zhenyu and his associated company.

*ST Gao Sheng 2018 annual report shows that the blue ding industry controlled by Wei Zhenyu is 1 billion 760 million yuan in debt and 4 billion 83 million yuan in external guarantee, and Yu Chi Reed has 2 billion 240 million yuan in its own liabilities, which leads to the rise of *ST. The debt of the actual controller Wei Zhenyu has not been paid up to 8 billion 83 million yuan.

As of July 1st, Yu Chi Reed holds 158550396 shares of the company's shares (all restricted sale shares), accounting for 14.57% of the total share capital of the company, of which 158550396 shares are in a state of judicial freeze and waiting for freezing, and 157300000 shares are in pledge. This Yu Chi Reed intends to be Beijing secondary Court judicial auction of the number of shares 101250396 shares, accounting for 9.30% of the company's total share capital.

It was counted that the number of shares sold by Reed in the judicial auction of Beijing second middle court was 22650000 shares. The total number of shares sold by Yu Chi Reed (including this time) was 123900396 shares, accounting for 11.38% of the total share capital of the company. In addition, the 55360000 shares of blue Ding are also being auctioned by the Shenzhen intermediate people's court. That is to say, the first, second major shareholders controlled by the Wechsler family have accumulated a total of 179260396 shares of the judicial auction shares, representing 16.47% of the total share capital of the company, and are performing the auction procedures.

In twenty-first Century, the Economic Daily reporters showed that Alibaba's judicial auction network platform showed that the price of Gaosheng shares held by Yu Chi Reed totaled 341 million 717 thousand and 300 yuan, and the total value of the assessment was 488 million 167 thousand and 600 yuan. The price of the Gaosheng shares held by the blue Ting company is the same as the assessment price, which amounts to 12 million 13 thousand and 100 yuan.

If the auctions and the auction are finally concluded, Yu Chi Reed and LAN Ding will jointly hold *ST Gaosheng shares, which will be reduced to 124828582 shares, accounting for 11.47% of the total share capital of the company. *ST Gao said that the move would likely lead to a change in the actual control of the company, which would not affect the production and operation of the company temporarily.