When Can *ST End Up?

*ST lifting the board of supervisors on the eve of the shareholders' meeting to cancel the removal of the relevant directors' motion, is fueling the former two forces fighting more intense. The only motion left on the issue of tightened security and joint borrowing was also rejected by major shareholders at today's (September 11th) afternoon general meeting. In the motion, the proportion of small and medium-sized shareholders to vote for approval reached 98%.

According to the securities times e reporter's understanding, originally in the removal of the Wechsler family stationed in the board of directors related motion, Ping and Weng yuan received the support, has surpassed the real controller Wei family. After the cancellation of the bill, Ping and Weng issued a statement that he refused to participate in the shareholders' meeting, so that the directors of the Wei family were temporarily escaped. This may also be one of the reasons why the Wechsler family has implemented the delaying tactics repeatedly through the board of directors and the board of supervisors, because once the direct confrontation is held at the shareholders' meeting, the general rate of its directors will be all washed out.

Due to the problem of illegal guarantee and real control of capital occupation, *ST has been investigated by the SFC. In 2018, the financial report was issued an audit report which could not be expressed. Now, in the 2019 year, only 1/3 left, the trouble of *ST's rise has not been resolved, and there is little time left for the company. When will the chaos of *ST rise?

Inner bucket upgrade

Yu Ping and Weng yuan jointly hold more than 10% of *ST shares (up to 17%) and have the qualification to convene a provisional shareholders' meeting. As early as July 15th, two people sent a letter to *ST's board of directors, proposing to convene a provisional shareholders' meeting to consider 7 bills, including: a resolution to tighten up the company's illegal guarantee and joint borrowing (motion 1); recall the motion of Wei Zhenyu, Li Yao and Zhang Yiwen on the ninth board of directors (motion 2~ motion 4); add Wei Jiang, Fang Yu and Ye Zhengmao to the ninth board directors. Case (motion 5~ motion 7).

Li Yao, chairman of the Wechsler family, will be rejected by Ping and Weng yuan's proposal at that time. The reason is: "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. The matter will be examined. "

Therefore, at the end of July, Ping and Weng yuan sent a provisional shareholders' meeting to the board of supervisors and submitted the motion. In July 30th, on the day of the board of supervisors, Li Yao also sent a letter that he had called on the board of directors to bypass the board of directors, and directly requested the board of supervisors to convene the general meeting of shareholders and submit relevant proposals in violation of the articles of association, 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.

However, on September 8th (Sunday), the same three supervisors convened a meeting, all agreed to cancel the 6 motions proposed in Ping and Weng yuan (motion 2~ motion 7). That is to say, the motion of the shareholders' meeting, which is only about 1, on the issue of tighten up the company's illegal guarantee and joint loan, no longer involves the reorganization of the board. The important shareholder of *ST, who is outside Ping, Weng yuan and Wei family, told the securities times e that the board of supervisors had lost the meaning of the shareholders' meeting.

The reason for the lifting of the relevant motion by *ST's board of supervisors is that in Ping and Weng yuan's "letter to the convening of the provisional shareholders meeting", it specifically states that it violates the relevant provisions of the articles eighty-second and eighty-third of the articles of association. According to the relevant provisions of fifty-second articles and fifty-third articles of the articles of association, the motion related to special instructions (motion 2 to motion 7) No vote shall be submitted to the shareholders' meeting and a resolution shall be made.

The legal opinion issued by *ST Gao Sheng entrusted by Beijing Zhen Bang law firm gives a more detailed explanation. According to the lawyer, the special statement made by Ping and Weng yuan on the invitation to convene the interim shareholders' meeting violated the eighty-third article of *ST's "company charter". Except for the cumulative voting system, the shareholders' meeting will vote on all the proposals one by one. If there are different proposals for the same matter, the voting will be made according to the time sequence of the proposal. Except for special reasons such as force majeure and other special reasons, the general meeting of shareholders will suspend or fail to make resolutions, and the shareholders' meeting will not set aside or refuse to vote on the proposal.

The lawyer further explained: for example, only 1 motions in the recall motion were passed by the bill, and the result of the motion 5 was adopted as the result of the voting result of the unannounced, motion 6 and motion 7. On the basis of the special statement, the directors of the motion 6 and the motion 7 were not elected, which obviously violated the above provisions of the eighty-third article of the articles of association. Directors who vote for bills 6 or 7 do not have the option of voting or choosing.

The resolution of the relevant board of directors was announced in the evening of September 9th, and only 1 days' spacing was held at the shareholders' meeting.

Strong rebound

The announcement was triggered by a strong rebound from Ping Weng yuan.

First of all, in September 10th, Yu Ping and Weng Yuan entrusted the law firm of Shanghai Hui Ye law firm to issue "legal opinion": "the letter to request the convening of the provisional shareholders meeting" is in conformity with the relevant provisions, and there is no violation of the articles of Association; *ST the Gaosheng board of supervisors adopted the resolution to cancel the sub division resolution without any justified reasons, and did not give notice in advance of two working days, in violation of the articles of association of the company. "Article fifty-seventh provides that if the board of supervisors implements relevant resolutions, Ping and Weng yuan have the right to convene the interim shareholders meeting by themselves.

Shortly afterwards, Ping and Weng yuan refused to take part in today's shareholders' meeting solemnly. The statement said that if the company's board of supervisors is still willing to go ahead and continue to implement the relevant matters concerning the cancellation of some motions and interim shareholders' meeting notice, the two party will convene the shareholders' meeting voluntarily by exercising the rights of shareholders. It strongly appeals to the regulatory authorities to focus on this matter and immediately take urgent measures to safeguard the rights and interests of all the shareholders of the company.

Yu Ping and Weng yuan confided the reasons for the removal of the directors of the Wei family by the above statement. Yu Ping and Weng Yuan said that since 2018, the controlling shareholders have been exposed to the huge amount of illegal guarantee and capital occupation. The company is being investigated by the China Securities Regulatory Commission. The company's business is seriously down, the mood of the employees fluctuates, and the risk of suspension is listed. The company is in a precarious situation. If the company does not reach a conclusion before the end of 2019, such as irregularities and guarantees, the audit report in 2019 will continue to issue a "no opinion" conclusion, which will cause the company to suspend trading on the market, and exclude the risk of delisting, leaving little time left for the company to save itself.

Yu Ping and Weng Yuan said that as shareholders of the company holding more than 10% of the company's shares, it is necessary, confident and responsible to stand up at the critical moment of the company's survival and to immediately set up the new board of directors of the company, reverse and reactivate the company's management, actively respond to the company's violation guarantee, try to avoid the company's risk of suspending the listing, and truly safeguard all the shareholders of the company. Interests.

Yu Ping and Weng yuan think that the controlling shareholders will continue to control the listed companies by deliberately using the majority of seats of the board of directors and board of supervisors after the cancellation of the motion concerned. The controlling shareholders will deliberately delay the time of litigation, passively respond to the violation guarantee, leave the company in the heat of water and ignore the risk of company delisting, and dispose of the interests of more than 60 thousand investors and more than 1000 employees. The existing board of directors and board of supervisors have lost their rationality and fairness.

Yu Ping and Weng yuan stressed once again that there is no violation of the articles of association in the letter to the convening of the provisional shareholders' meeting. The resolution of the board of supervisors resolution cancelled part of the bills violating the relevant provisions of the articles of association and the rules of procedure of the shareholders' meeting. It is untenable to be lawless.

Who can win?

In the evening of September 11th, *ST announced the announcement of the first provisional general meeting of shareholders in 2019, and the only bill left to solve the problem of illegal guarantee and joint borrowing was rejected.

The announcement shows that the shareholders and shareholders attending the meeting authorized 324 representatives, representing 263 million shares, representing 24.87% of the total number of voting shares of the company. Among them, 13 shareholders represented by on-site voting, representing 189 million shares, accounted for 17.88% of the total number of voting shares of the company; 311 shareholders who voted through the Internet accounted for 6.99% of the total number of voting shares of the company. There were 322 minority shareholders attending the meeting, representing 88 million 912 thousand and 700 shares, accounting for 8.39% of the total number of voting shares.

The final voting result was that the motion did not pass: 104 million shares were agreed, accounting for 39.3%, and 159 million shares were opposed, accounting for 60.26%. However, the voting situation of small and medium-sized shareholders showed that they agreed to 87 million 563 thousand and 200 shares, accounting for 98.48%. It can be seen that Yu Ping and Weng yuan's related motions have been supported by many small and medium-sized shareholders.

Detailed analysis of attendance and voting shows that *ST, the largest shareholder of Reed, voted against the vote. Yu Chi Reed currently holds 159 million shares of *ST, which is very close to the number of opposition votes. Yu Chi Reed has entered bankruptcy proceedings. Beijing hareen sky Rui law firm serves as bankruptcy administrator. Therefore, the vote was thrown out by Yu Chi Reed's bankruptcy administrator.

It can also be speculated that another 5% of the voting shareholders were Gao Shu Yi, who voted for approval. A long time ago, the 55 million 360 thousand shares of the blue tripod Industrial Company, which was won by 132 million yuan, had been transferred to *ST, and became a shareholder holding 5.23% of the company's shares.

On the eve of the shareholders' meeting, Gao Shuo CEO, Chen Kang, told the securities times e reporters that the motion retained was meaningless, and that restructuring the board of directors was the most direct way. Chen Kang once again stressed that Gao Shu Yi is the manager, the interests of the investors behind him. After the investor's vote, he tends to support those who can make a difference for the listed companies. Chen Kang also said that he admired the equal people because they were all things.

At this point, it is also possible to assume that if the 6 bills, such as ping and Weng yuan, were removed from the board of directors and the directors of the board of directors were not temporarily cancelled by the *ST board of supervisors, according to the current support situation, the approximate rate would be passed. Because Yu Ping and Weng yuan jointly hold 17% of the shares, plus Gao search 5.23%, and other small and medium shareholders 8%, or more than 30%. The Wechsler family has a *ST ratio of 23.48% through Yu Chi Reed and LAN Ding industries. The blue Ting industrial liquidation team is the manager of bankruptcy reorganization, and is the director of the national Hao lawyer (Wuhan) company. Xia Shaolin, the latter's director, is the person in charge. The blue and blue industrial bankruptcy and liquidation team (Manager) has informed *ST Gaosheng that during the bankruptcy proceedings, the manager will exercise the shareholder's rights of the blue tripod industry. If *ST Gaosheng convenes the shareholders' meeting and other matters, it should notify the manager in advance in accordance with the laws, regulations and the company's articles of association. This time, the blue tripod industry did not participate in the voting.