*ST Gaosheng (000971): Letter Card Illegal Chairman Was Banned In Five Years

In October 17th, *ST Gaosheng issued a notice on receipt of China's Securities Regulatory Commission Hubei Supervision Bureau's "administrative penalty and market entry notice".

According to the announcement, Gaosheng Cmi Holdings Ltd received the notice of investigation of the China Securities Regulatory Commission in September 27, 2018 (serial number: 201861). According to the relevant provisions of the securities law of the People's Republic of China, the CSRC decided to file a case investigation on the company because of the company's alleged illegal disclosure of information. In October 17, 2019, *ST received the "administrative penalty and market entry notice" issued by the Hubei regulatory authority of the China Securities Regulatory Commission.

According to the Commission's investigation, the facts of *ST's rise in alleged information disclosure are as follows:

(1) Gaosheng holdings, as a common borrower, borrows from related parties, forming a related guarantee act in real time and forming related transactions.

In October 30th of 1.2017, Gaosheng holding and its controlling shareholder, Beijing Yu Chi Reed Investment Co., Ltd. (hereinafter referred to as Yu Chi Ruide) and LAN Ding Industrial (Hubei) Co., Ltd. (hereinafter referred to as blue tripod industry) as a common borrower, signed a loan agreement with lenders Zhao Congbin, with a loan amount of 100 million yuan.

In October 30th of 2.2017, Gaosheng holdings and cultural Silicon Valley as a common borrower signed a loan and guarantee contract with the loan man bear Wei Wei, and the loan amount was 100 million yuan.

In December 29th of 3.2017, Gaosheng holdings, Wei Zhenyu and Wei Junkang, as joint borrowers, signed a loan contract with lenders Zhou Shoubin, with a loan amount of 10 million yuan.

In January 9th of 4.2018, Gaosheng holdings, Yu Chi Reed, LAN ding industry, Hua Xi Yun and Wei Junkang jointly signed the highest guaranteed loan contract with the lender Zhu Kaibo, and the loan amount was 25 million yuan.

In January 29th 5.2018, Gaosheng holdings, Yu Chi Reed, LAN ding industry, Hua Xi Yun Yun and Wei Junkang as co borrowers signed the highest guaranteed loan contract with lenders Cai Yuanyuan, and the loan amount was 40 million yuan.

In March 16th of 6.2018, Gaosheng holdings, landing industry and cultural Silicon Valley as a common borrower signed the highest borrowing amount of 50 million loan funds with the lender Jiaxing state Han Cci Capital Ltd (hereinafter referred to as Jiaxing Guo Han).

In April 26th of 7.2018, Gaosheng holdings, Yu Chi Reed, LAN ding industry, Huayi wandering, Shenzhou 100 opera and Wei Jun Kang, Li Yao, Zhang Yiwen and other common borrowers signed loan agreements with lender Tian Hengwei, with a loan amount of 47 million 150 thousand yuan. On the same day, Gaosheng holdings also provided guaranty for the above 47 million 150 thousand yuan loan.

On the basis of the above 7 (1-7) common loan agreements and combined with the performance of the agreement, the borrowers and users of the loan are not Gaosheng holdings, but the related party of Gaosheng holdings. Gaosheng holdings mainly undertake the repayment obligations under certain conditions in the above-mentioned common loan matters, and constitutes a guarantee legal relationship in essence. According to the provisions of the seventy-first articles and third items of the information disclosure management measures of listed companies, the 7 loan guarantee items constitute related transactions.

(two) Gaosheng holdings directly provide collateral for related parties and constitute related transactions.

In March 14th of 8.2017, Yu Chi Reed signed a loan contract with 200 million yuan loan from Shanghai's Cci Capital Ltd in Shanghai, and signed 12 million yuan financial consultation agreement with Xinjiang chivalry union Equity Investment Limited (hereinafter referred to as chivalry alliance). On the same day, Gaosheng holdings signed a guarantee contract with Shanghai Xi Lin and chivalry alliance to provide joint liability guarantee for Yu Chi Reed. At the same time, the blue tripod industry, Hua Xi Yun Yun, Shenzhou 100 opera, Wei Junkang, Wei Zhenyu and so on provide joint guarantee for the above loans.

In April 24th of 9.2017, Yu Chi Reed signed a loan contract with a loan of 100 million yuan with Beijing Bi Tian Fortune Investment Co., Ltd. (hereinafter referred to as Bi Tian fortune). On the same day, Gaosheng holdings signed a guarantee contract with Bi Tian wealth to provide joint liability guarantee for Yu Chi Reed. At the same time, LAN ding industry, Wei Junkang, Wei Zhenyu and so on provide joint guarantee for the loan.

In June 6th 10.2017, landing industry and Beijing Zhongtai Chuang Ying Enterprise Management Co., Ltd. (hereinafter referred to as "Sino Thai Chong Ying") signed a loan of 450 million yuan "entrusted loan loan contract". In June 2017, Gaosheng holdings provided joint and several liability guarantee for the loan.

In June of 11.2017, Gaosheng issued a letter of commitment to China Huarong Asset Management Limited by Share Ltd Beijing branch (hereinafter referred to as Huarong North Branch), which was jointly and severally liable for the repayment agreement of the payer, the Shenhua 100 play and the lender Huarong North Branch and the 550 million yuan debt of the whole agreement under the supplementary agreement.

12.2017 years in August 15th and October 18, 2017, the blue tripod industry and Shenzhen Qianhai high search Cci Capital Ltd (hereinafter referred to as high search easy) and Nanyang Commercial Bank (China) Limited Shenzhen branch (hereinafter referred to as Nanyang Commercial Bank) signed 2 "entrusted loan agreement", Gao Shu Yi based on the above 2 "entrusted loan agreement" to the blue ding industry respectively to provide loans 294 million yuan and 158 million yuan. In August 15, 2017 and October 18, 2017, Gaosheng holdings signed a guaranty contract with Gao Shu Yi to provide joint and several liability guarantee for the above two loans.

In August of 13.2017, excellence and Beijing Huize Geotechnical Engineering Co., Ltd. (hereinafter referred to as "Huize rock and soil") signed the loan contract, and the outstanding leader borrowed 100 million yuan from Huize rock and earth. In September 1, 2017, the Limited by Share Ltd of Shenzhou the Great Wall (hereinafter referred to as Shenzhou the Great Wall) issued 100 million yuan commercial notes to Huize rock and soil (Hui Zeyan earth system, Shenzhou the Great Wall project sub contractor). In September 8, 2017, Gaosheng holdings issued a letter of undertaking to honour the commercial acceptance draft to Shenzhou the Great Wall, which is responsible for the payment and guarantee of the above commercial draft.

In December 28th 14.2017, Gaosheng holdings and Wei Junkang signed the loan agreement as guarantor, providing joint liability for the 16 million 683 thousand and 300 yuan loan agreement signed by the Shenzhou 100 plays and the Ningbo Hua Hu silver spoon Investment Center (hereinafter referred to as Ningbo Hua Hu).

In November 17th of 15.2017, the Beijing world universe Technology Development Co., Ltd. (hereinafter referred to as the world of heaven and earth) signed the "domestic factoring contract" with Shenzhen Guoxin factoring Co., Ltd. (hereinafter referred to as "Guoxin factoring"), and the entire bill rights of 40 million yuan commercial paper opened by Yu Chi Reed, who was accepted by the National Trust and factoring. Gaosheng Holdings Co., Ltd. issued a letter of acceptance and unconditional buy back letter to Guoxin factoring on 19 November 2017. Gaosheng holdings, as a guarantor, undertakes to undertake the responsibility of guaranty, and performs unconditional repurchase obligations on behalf of the payment obligations and the underlying draft.

In January 27th 16.2018, LAN ding industry and Zhejiang Zhongtai Chuang Exhibition Enterprise Management Co., Ltd. (hereinafter referred to as "Zhongtai Creation Exhibition") signed the 22 million 500 thousand yuan "loan contract". Gaosheng holdings issued a guarantee for the unlimited liability of third parties to the Sino Thai exhibition.

In June 20th 17.2018, LAN ding industry signed a 14 million 180 thousand and 900 yuan loan contract with Shenzhen BAOYING factoring Co., Ltd. (hereinafter referred to as BAOYING factoring). On the same day, Gaosheng holdings signed a guarantee contract with BAOYING factoring, which was jointly and severally liable for the above loans.

In June 25th of 18.2018, cultural Silicon Valley and Beijing Beiyang Bo Tian Trading Co., Ltd. (hereinafter referred to as Beiyang Bo Tian) signed a 64 million 150 thousand yuan loan agreement. The agreement also agreed that Gaosheng holdings, Wei Zhenyu and Wei Junkang could guarantee the loan. In September 30, 2018, the cultural Silicon Valley signed a supplementary agreement with the Beiyang Bo Tian on the arrangement of loan renewal and new loan arrangements. The agreement agreed to increase the loan amount by 64 million 140 thousand yuan, and Gaosheng holdings, Wei Zhenyu, Wei Jun Kang, Yu Chi Reed, LAN ding industry, Shenzhou 100 opera and Chinese hiking wandering on the 2 loans were jointly and severally liable. In accordance with the provisions of the seventy-first articles and third items of the information disclosure management measures of listed companies, Gaosheng holding 11 items (8-18 guarantee matters) provide guarantee for related parties and constitute related transactions.

(three) Gaosheng holding loan funds are used by related parties to form related transactions.

In July 18th 19.2018, Gaosheng holdings signed a 40 million yuan loan and guarantee agreement with Dong Yunwei and Yan Yu Qing. Wei Zhenyu and Wei Junkang assumed joint and several liability for the above loans. The loan and guarantee agreement agreed that Dong Yunwei and Yan Yuqing would directly enter the cultural Silicon Valley account. In July 19, 2018, Dong Yunwei and Yan Yu Qing respectively invested 40 million yuan into the cultural Silicon Valley account. In accordance with the provisions of the seventy-first articles and third items of the information disclosure management measures of listed companies, the acts of using the above-mentioned loan funds to related parties constitute related transactions.

Gaosheng holdings did not disclose the above 19 related transactions in accordance with the regulations. Its specific responsibilities are as follows:

1. Gaosheng holdings and Yu Chi Reed and LAN Ding industries borrowed 100 million yuan from Zhao Congbin, and the person directly responsible for not disclosing the information in time was Wei Zhenyu, the then chairman of the board.

2. Gaosheng holdings and cultural Silicon Valley borrowed 100 million yuan from Xiong Feiwei. The direct responsible person who did not disclose the information in time was Wei Zhenyu, the then chairman of the board.

3. Gaosheng holdings and Wei Zhenyu and Wei Junkang borrowed 10 million yuan from Zhou Shoubin. Those who were not directly responsible for the disclosure of the information were Wei Zhenyu, the then chairman of the board.

4. Gaosheng holdings and Yu Chi Reed, LAN Ding Industrial and other loans to Zhu Kaibo 25 million yuan, did not disclose the information directly responsible for the time of the person in charge of the current chairman Wei Zhenyu;

5. Gaosheng holdings and Yu Chi Reed, LAN Ding Industrial and other loans to Cai Yuanyuan 40 million yuan, did not disclose the information directly responsible for the time of the person in charge of the current chairman Wei Zhenyu;

6. Gaosheng holdings and blue Ting industrial and cultural Silicon Valley borrowed 50 million yuan from Jiaxing state Han, and the direct responsible persons who did not disclose the information in time were Li Yao, then chief financial officer Zhang Yiwen, and other directly responsible persons were Wei Zhenyu, then director Sun Peng.

7. Gaosheng holdings and Yu Chi Reed, LAN Ding Industrial and other loans to Tian Hengwei 47 million 150 thousand yuan, did not disclose the information directly responsible for the time of the person in charge is the then chairman Li Yao, then chief financial officer Zhang Yiwen;

8. Gaosheng holdings provides guarantee for Yu Chi Reed and Shanghai Xi Lin 200 million yuan loan agreement, and 12 million yuan financial consultation agreement with chivalry alliance. The person in charge who is not directly responsible for disclosing the information is Wei Zhenyu, the then chairman of the board.

9. Gaosheng holding company provides guarantee for Yu Chi Reed and Bi Tian Fortune 100 million yuan loan agreement, and the person directly responsible for not disclosing the information in time is Wei Zhenyu, the then chairman of the board.

10. Gaosheng holding company provides guarantee for blue tripod industry and Sino Thai profit earning 450 million yuan loan agreement. The direct responsible person who has not disclosed the information in time is Wei Zhenyu, the then chairman.

11. Gaosheng holdings provides guarantees for the Shenzhou 100 drama and the Huarong North sub 550 million yuan loan agreement. The direct responsible person who has not disclosed the information in time is Wei Zhenyu, the then chairman.

12. Gaosheng holding company provided a guarantee of 447 million yuan loan agreement for the blue tripod industry and gaoshu 2, and the direct responsible person who did not disclose the information in time was Wei Zhenyu, the then chairman.

13. Gaosheng holding company provides guarantee for the 40 million yuan commercial paper issued by Yu Chi Reed. The person directly responsible for not disclosing the information in time is Wei Zhenyu, the then chairman of the board.

14. Gaosheng holdings provides guarantee for Shenzhou 100 opera and Ningbo Hua Hu 16 million 683 thousand and 300 yuan loan agreement, and the person directly responsible for not disclosing the information in time is Wei Zhenyu, the then chairman.

15. Gaosheng Holding Co., Ltd. provides guaranty for outstanding leader and 100 million yuan loan agreement of Huize rock and earth (Shenzhou the Great Wall). The person directly responsible for not disclosing the information in time is Wei Zhenyu, the then chairman.

16. Gaosheng holding company provides guarantee for blue Ting industry and Sino Thai loan agreement of 22 million 500 thousand yuan, and the person directly responsible for not disclosing the information in time is Wei Zhenyu, the then chairman of the board.

17. Gaosheng holding company provides guarantee for the loan agreement between blue tripod industry and BAOYING factoring 14 million 180 thousand and 900 yuan. The person directly responsible for not disclosing the information in time is Li Yao, then chairman of the board of directors and Zhang Yiwen, chief financial officer.

18. Gaosheng holdings provides guarantee for the cultural Silicon Valley and the 128 million 290 thousand yuan loan agreement of Beiyang Bo Tian. The direct responsible person who has not disclosed the information in time is Li Yao, the other directly responsible person is Wei Zhenyu, the then director.

19. Gaosheng holdings loan 40 million yuan to the use of the cultural Silicon Valley, not directly responsible for the disclosure of the information directly responsible for the current time as chairman of the board of directors Li Yao, then chief financial officer Zhang Yiwen, the other directly responsible person is the then director Wei Zhenyu.

Three, Gaosheng holdings did not disclose related transactions secured by related parties in the annual report 2017.

Of the above related transactions, item 11 and 1-3, 11 related transactions secured by related parties occurred in 2017. In this regard, Gaosheng holdings did not disclose the related transactions in the annual report of 2017, according to the relevant provisions of the regulations on the content and format of companies' information disclosure and the format of the annual report second (annual revision) (2017 Revision) (SFC Announcement No. [2017]17), and the relevant provisions of the Shenzhen Stock Exchange Listing Rules (2014 Revision), which were issued by Gaosheng Holdings Limited.

In the 2017 annual report, Gaosheng holdings did not disclose the related transactions secured by the related parties, which violated the sixty-third provision of the securities law, and constituted the "omission" of the information disclosed by the issuer, the listed company or other information disclosure obligor in the 193rd Clause 1 of the securities law. Li Yao, then chairman of the board, and Zhang Yiwen, chief financial officer, were directly responsible for the above offenses. Wei Zhenyu, Sun Peng, Dong Hong, Xu Lei, Chen Guoxin, radar, Zhao Liang, Tian Ying Chun were appointed as directors, Dong Xuanchen, Dong Xuanchen, and Weng yuan.

In addition, Wei Zhenyu, as the actual controller of Gaosheng holdings, conceal his knowledge of Gaosheng holdings for providing collateral to related parties, lending funds to the use of related parties, etc., does not notify listed companies and urges them to fulfill related transaction consideration and information disclosure obligations, and constitutes the actual controllers of the 193rd and third paragraphs of the securities law to instigate illegal acts of information disclosure.

According to the facts, nature, circumstances and the degree of social harm of the parties' illegal activities, according to the provisions of the 193rd and third paragraphs of the securities law, the SFC intends to decide:

First, give warning to Gaosheng Cmi Holdings Ltd and impose a fine of six hundred thousand yuan.

Two, give Wei Zhenyu a warning, and impose a fine of nine hundred thousand yuan. Among them, the person directly responsible is fined three hundred thousand yuan, and the actual controller is fined six hundred thousand yuan.

Three, warned Li Yao and Zhang Yiwen and imposed a fine of three hundred thousand yuan respectively.

Four, give Sun Peng a warning and pay a fine of one hundred thousand yuan.

Five, give warning to Dong Hong, Xu Lei, Chen Guoxin, radar, Zhao Liang, Tian Ying Chun, Dong Xuanchen, Yao Yuan, Weng yuan, Zuo Feng, Zhang Chi, Pu Wei and Pu Wei, and impose a fine of thirty thousand yuan respectively.

In addition, Wei Zhenyu, as a company's actual controller and a chairman or director of a listed company, conceals such important events as providing guarantee and borrowing funds for related parties of listed companies. The acts are of a bad nature, which seriously disrupts the order of the securities market and seriously damages the legitimate rights and interests of investors. In accordance with the 233rd provisions of the securities law and the provisions of the third, first, second and five provisions of the securities market entry Prohibition (SFC Order No. 115th), it is decided to take five years' prohibition measures for Wei Zhenyu's securities market. During the period of prohibiting entry, Wei Zhenyu shall not be allowed to continue to engage in securities business in the original institution or to be a director, supervisor or senior managerial officer of an original listed company or an unlisted public company, nor shall he engage in securities business in any other institution or be a director, supervisor or senior managerial officer of other listed companies or unlisted public companies.