*ST Gaosheng (000971): Three Directors Were Proposed To Recall The Weis Family Or Lose Control.

As *ST's second largest force, Ping and Weng yuan again launched a proposal to recall directors of three people including Wei Zhenyu, Li Yao and Zhang Yiwen. The public announcement board of supervisors has agreed to hold a provisional shareholders' meeting in September 11th to consider relevant bills. The three people who were proposed to be removed were the directors of the Wechsler family. Wei Zhenyu was the actual controller of *ST Gaosheng, Li Yao served as chairman of the board and Zhang Yiwen was the chief financial officer and acting director.

As early as the beginning of January this year, 9 shareholders of Ping, Weng Yuan, Xu Lei and Yuan Jianing had jointly proposed the removal of directors of Wei Zhenyu, Li Yao, Zhang Yiwen and Sun Peng (Wei Zhenyu's cousin). Until now, a number of enterprises under the name of the Weis family have entered the bankruptcy reorganization process, and the *ST holding shares have been frozen by law, and some have been auctioned off.

If the shareholders' meeting can finally remove Wei Zhenyu and other 3 directors, the Weis family will completely lose control of the *ST rise when the blue tripod industry and Yu Chi Reed go bankrupt and all the shares are frozen by law and partly owned by a judicial auction.

Wei family director was proposed to recall.

On the evening of August 1st, *ST announced the announcement of a meeting of the board of supervisors, and the board of supervisors adopted the motion to convene the first provisional shareholders' meeting in 2019 in July 30th.

According to the announcement, *ST's senior shareholder in Ping and Weng yuan sent relevant letters to the board on 15 July, calling the board of directors to convene a provisional shareholders' meeting and sending an e-mail to the Secretary of the board of directors and all directors on the same day. However, *ST did not hold a board meeting to deliberate on relevant bills. Li Yao, chairman of the company, said: "the proposals of Yu Ping and Weng yuan fail to submit basic legal documents such as identity certificates and stock certificates in accordance with the requirements of laws, regulations and normative documents. Before the receipt of these necessary basic legal documents, I can not review and convene the board of directors for consideration."

In July 26th and July 29th, Yu Ping and Weng yuan invited the board of supervisors to *ST to convene the provisional shareholders' meeting and submitted relevant motions. On the day of the board of supervisors, Li Yao also sent a letter saying that in the absence of compliance with the articles of association, Weng yuan and Ping Yuan directly requested the board of supervisors to convene the shareholders' meeting and submit relevant proposals, which seriously violated the provisions of the articles of association. In the end, Li Yao failed to prevent the board of supervisors from passing the relevant bills. All the 3 supervisors voted in favour, 3 votes in favour, and agreed to hold the first provisional shareholders' meeting in 2019. The time was set for September 11th.

Yu Ping and Weng yuan each hold 8.27% shares of *ST, holding a total stake of 16.54%. *ST Gaosheng's articles of association stipulates that a shareholder who holds more than 10% of the shares of a company individually or collectively has the right to request an interim shareholders' meeting to be requested by the board of directors. The board of directors does not agree to convene an interim shareholders' meeting, or if it fails to give feedback within 10 days after receiving the request, the shareholder shall have the right to propose a provisional shareholders' meeting to the board of supervisors.

Yu Ping and Weng yuan put forward 7 bills, including the proposal to tighten up the problem of illegal guarantee and joint loan; remove the motion of directors of the ninth board of directors of Wei Zhenyu, Li Yao and Zhang Yiwen; add Wei Jiang, Fang Yu and Ye Zhengmao as the ninth board directors.

Yu Ping and Weng yuan mentioned a number of key events in the motion, including: *ST Gaosheng 2018 annual financial statements were issued an audit report that could not express their opinions. The accounting firm said its "formation of the basis for inability to express opinions" was mainly due to the fact that the actual controller and the eight chairman of the board of directors Wei Zhenyu and the ninth chairman Li Yao had repeatedly used the company's official seal without the approval of the shareholders' meeting or the board of directors. The company's name was used as a common borrower or guarantor to guarantee the financing of the controlling shareholders and their related parties and the actual controller.

In last July ~8, the securities times e company published a series of reports. *ST Gaosheng actually controlled the Fang Wei family in deep debt trap, occupied a large number of funds of listed companies, and used the name of listed companies to violate external guarantee. After that, the Shenzhen Stock Exchange carried out disciplinary actions against the relevant subjects, and the CSRC also placed a case investigation on the company. Even so, the amount of the illegal guarantee by the *ST family in the name of the Wechsler family is expanding.

Yu Ping and Weng yuan listed the recent cases of debt dispute mediated by the court in the proposal. *ST Gaosheng was listed as a common payer or a joint liability. In the related debt disputes, the Wei family has forged the resolution of *ST's promotion of the board of directors.

Therefore, Ping Ping and Weng Yuan said in the motion that in order to safeguard the legitimate rights and interests of the company and safeguard the interests of all shareholders other than the controlling shareholders and their related shareholders, Xu Lei and Dong Hong, the Licensing companies directors of the shareholders' meeting, suggested that relevant emergency measures should be taken to tighten up the problems of company's breach of regulations and illegal joint borrowing. From the specific content, Yu Ping and Weng yuan hope that Xu Lei and Dong Hong can obtain full authorization from listed companies and take urgent measures to deal with related problems.

Can actual controllers be expelled?

At present, *ST's biggest shareholder is Yu Chi Reed, with a shareholding ratio of 14.57%. The second largest shareholder is Lan ding industry, with a shareholding ratio of 13.37%. Yu Chi Reed, LAN Ding industrial control per capita is Wei Zhenyu, the real controller is Wei Zhenyu's father Wei Jun Kang. However, the 55 million 360 thousand shares held by the blue Ting industry (5.09% of the total share capital) have been auctioned off by law in July 23rd. The high search Cci Capital Ltd of Qianhai, Shenzhen (hereinafter referred to as "Gao Shu Yi") has won a share of the shares at the starting price of 132 million yuan and has not yet completed the transfer.

After the transfer, the shares controlled by the Wechsler family fell to 22.85%, and gaoshu will become the fifth largest shareholder of *ST.

Gao Shu Yi, CEO, told reporters at the securities times e that whether Gao can vote on the shareholders' meeting in September 11th depends on whether or not the stock transfer has been completed. If the transfer can be completed then, which side will Gao choose to support? Chen Kang responded, temporarily inconvenient to disclose. It can be seen from the above that the ownership of the voting rights of the above 5.09% *ST shares is uncertain, which may affect the final outcome of the shareholders' meeting.

There is another point that needs special attention. Yu Chi Reed and LAN Ding are all in bankruptcy proceedings. There is a greater uncertainty in the ownership of the shares that the voting rights can continue to support the Wei family.

In the evening of July 9th, *ST announced that the blue tripod industry was unable to repay its debts due to insolvency and filed for bankruptcy reorganization with the people's Court of Xiantao, Hubei. In July 8th, Xiantao court issued the "decision", designated the blue Ding Industrial liquidation team as the manager of bankruptcy reorganization, and Xia Shaolin, director of the Guo Hao lawyer (Wuhan) office as the person in charge.

Three days later, in the evening of July 12th, *ST announced that Yu Chi Reed could not repay debts due to insolvency and filed for bankruptcy with the Fangshan District people's Court of Beijing. Subsequently, the Fangshan court ruled that Yu Chi Reed's bankruptcy application was accepted. Follow up announcement, *ST Gaosheng has not disclosed Yu Chi Reed's bankruptcy reorganization manager and responsible person.

In the evening of July 31st, *ST announced that it had received a notice from the bankruptcy and liquidation team (Manager) of the blue Ting industry recently. It said that during the bankruptcy proceedings, the manager would exercise the rights of shareholders of the blue Ting industry instead of the shareholders of the blue Ting industry. If the *ST held the meeting of shareholders, it should notify the manager in advance in accordance with the provisions of the laws and regulations and the company's articles of association.

That is to say, the voting rights corresponding to the shares held by the blue tripod industry belong to the blue and blue industrial bankruptcy and liquidation group. It can also be deduced that Yu Chi Reed's shareholding shares the right to vote or is unable to continue to be exercised by the Wechsler family. In this way, the win in Ping and Weng yuan is bigger.

In addition, two other companies under the Wechsler family have filed for bankruptcy. The Fangshan District people's Court of Beijing has issued a notice recently that it has decided to accept the two cases of bankruptcy and reorganization of the debtor Beijing Shenzhou 100 Opera Culture Industry Co., Ltd. (hereinafter referred to as "Shenzhou 100 opera") and Beijing Hua Xi Yun Culture Industry Co., Ltd. (hereinafter referred to as "Hua Xi Yun you"). In view of the large number of creditors in the two cases, the legal relationship is complex, and has a greater impact on the regional scale, and is interrelated and mutually guaranteed, so it is intended to be merged.

The people's Court of Fangshan District, Beijing decided to adopt a competitive way to determine the joint bankruptcy administrator of the two cases mentioned above. The organizations wishing to participate should sign up before July 30th. The securities times e company's reporter called the Fangshan District people's Court of Beijing, and the staff said that the matter had not been achieved before.

The securities times e company has reported in detail that Shenzhou 100 plays and Chinese fun wandering are the main operators of the Wei family's project in Fangshan, Beijing, mainly including the Beijing culture Silicon Valley project and data center project. At present, the situation is poor, and the construction stagnation is far from expected. It is also these projects, which cost a lot of money from the Weis family, causing them to fall into a serious debt crisis and drag the *ST of the listed companies up.