Five Years Four Degrees Easy To Master ST Busen'S Shell Battle

The development of *ST Busen (002569.SZ) is undergoing multiple tests. In February 18th, the Shenzhen stock exchange sent a letter of concern to the company to inquire about its failure to complete the engagement of audit institutions. In addition, the Commission also made a case investigation in January 14th on suspicion of illegal disclosure of information.

Moreover, *ST Busen, which has been implementing the delisting risk warning for two consecutive years, is the key year for its preservation in 2019. The company is troubled by problems, shareholder disputes and changes in actual controllers, all of which have a haze on its shell battle cage.

Cheng Weixiong, an independent analyst in shoe and garment industry, told reporters that from the industrial level, Busen was very sorry that its suits, shirts and other businesses performed well before. From the whole market, YOUNGOR, Shanshan, and nine herdmen were all affected, and the traditional clothing industry was depressed.

After being placed on file for investigation, attention was received.

*ST Busen announced in January 2nd that it intends to appoint Dahua accounting firm (special general partnership) (hereinafter referred to as "Dahua Institute") as its 2019 annual audit institution. However, as of now, the company has not yet issued a notice to hold shareholders' meeting to deliberate on related matters, and the procedure for engaging in audit institutions has not yet been completed.

In response, the Shenzhen Stock Exchange issued a letter of concern in February 18th, asking *ST Busen to explain why it has not convened the shareholders' meeting to consider the reasons for the appointment of audit institutions. Combined with the company's asset size, business composition, key audit items and losses in 2018, it explained whether it had a preliminary communication with Dahua office, and whether Dahua had enough time to complete the 2019 year of the company. Audit work.

According to previous *ST Busen's performance report, the company's net profits in 2017 and 2018 were -3381 million yuan and -1.93 billion yuan respectively, and the company's stock was implemented in 2019 for delisting risk warning.

In January 30th, the company said in its earnings forecast that its net profit attributable to shareholders of Listed Companies in 2019 was 27 million -4000 million yuan. Insiders pointed out that, if the performance announcement was made, *ST Busen temporarily lifted the delisting crisis, but the data was only the result of preliminary calculation by the financial department, and was not audited by an accounting firm.

"If we can guarantee the success of the shell, we will eventually accept the audit results and delay the issuance of financial reports." Shen Meng, executive director of Shen Song capital, told an associated press reporter that "there is no need for companies to falsely report their performance forecasts. The audit results are consistent with the forecast conclusions. The Shenzhen stock exchange is concerned about whether it can disclose financial reports on time."

It is worth mentioning that, according to the *ST Busen announcement, if it is violating the letter of suspicion, it will be punished by the SFC, and the violation is a major delisting situation stipulated by the enforcement measures of the Shenzhen Stock Exchange listed company's major illegal and compulsory delisting. The implementation of the delisting risk warning thirty trading date after the expiration of the date, the stock will be suspended until the Shenzhen Stock Exchange within fifteen trading days to make a decision whether to suspend the company's stock trading.

However, in a notice issued in February 18th, the company stressed that the production and operation of the company is basically normal, and that the Commission's investigation is still in progress and has not yet received the concluding observations or decisions of the SFC on the above investigation.

"From the current situation, the problem of shell protection is not large. For listed companies, tens of millions of profits can still be operated. Just after shell protection, *ST Busen is only operating as a "shell", and its real clothing industry is very difficult to develop. Cheng Weixiong bluntly said.

Capital player's "shell" tool

In October 9, 2019, Beijing Dongfang Heng Zheng technology and Trade Co., Ltd. (hereinafter referred to as "Orient Heng Zheng") was the controller of Wang Chunjiang. According to media reports, in May 2019, Dongheng Heng was awarded the 16% stake in *ST Busen by judicial auction and became the largest shareholder of the latter. Later, the other small and medium-sized shareholders continued to "force the court" to request the removal of the board of directors and board members of the board headed by Zhao Chunxia and obtained the control power of the listed company. After several battles, the Zhao Chunxia team finally withdrew in September 2019.

Insiders said that in 2011, Busen's shares landed at Shenzhen Stock Exchange, which had been badly hurt after several rounds of real control. "Its post market performance has been on the decline and its first loss since 2014, but at that time, the company was also emphasizing the need to strengthen its Busen brand, that is, its men's clothing business, but the real controller changed frequently, and the main business of the company also changed."

In March 2015, the founder family of Busen shares left the market. Its controlling shareholder, Busen group, resold its 55 million stake. Shanghai Rui Ying became the controlling shareholder, the shareholding ratio was 29.86%, and the shareholding ratio of Busen group dropped to 3.57%. In the same year, the company transferred all the shares of its wholly-owned subsidiary, Zhuji Busen Investment Co., Ltd. to Busen group, resulting in a transaction income of 45 million 383 thousand and 700 yuan, and to turn it into a profit.

"Busen's main garment industry has developed well before, but because of its rapid expansion and its involvement in real estate, it has led to the lack of funds, and the founder has to solve it." An insider who declined to be named told the financial union reporters that "after the founder withdrew, the real control of Busen shares changed like a horse lantern. The foundation of the company's main business was emptied one by one."

In August 2016, Xu Maodong's Xinghe win and Lhasa star scorching were priced at 1 billion 12 million yuan and were granted 95.02% stake in Shanghai Rui, and became the real controller of Busen shares. Statistics show that Xu Maodong has many Internet assets in the Internet industry for many years. Since then, Busen has begun to transform from traditional clothing enterprises to financial technology companies that provide one-stop financial services to SMEs. In the same year, its revenues and net profits declined.

In October 22, 2017, Busen shares announced that the controlling shareholder, Rui Wei assets, would transfer the stake of the 16% listed companies to 1 billion 66 million yuan to security technology, which actually controlled Zhao Chunxia as the real controller of Busen shares. Zhao Chunxia's other identity is the founder of the Internet financial platform "love investment". The technology was established in September 1, 2017, and insiders pointed out that Busen shares have become the "shell" of the major platforms. The technology is set up to connect Busen shares.

After Zhao Chunxia's entry, the situation of Busen shares deteriorated further. The company suffered a continuous loss in 2017 and 2018, and was implemented in 2019 for a delisting risk warning. Stock short changed to *ST Busen. In July 2018, Zhao Chunxia's core asset "love investment" thunderstorm, the platform appeared to be overdue.

"In five years, the four change of the real controller, dampened the vitality of *ST Busen, and allowed it to become a tool for capital operation. At present, the companies that enter the market use Busen as a" shell "resource. Cheng Weixiong told the associated press.

"The case of a listed company as a capital shell tool is not uncommon in the A share market. Companies like *ST Busen have started to become shell companies since the first shareholder control transfer." Shen Meng pointed out that as a tool for capital operation, new capital will be injected into the new business, but even if there is entity business, it will not be able to get rid of the fact that it has become "shell" in the short term.