Unable To Lead The Management Of Subsidiary Companies, Jinjiang Group V. Shenzhen Textile A Arbitration Case Extension

The arbitration between Shenzhen textile A and Hangzhou Jinjiang Group Co., Ltd. (hereinafter referred to as "Jinjiang group") has been postponed because of the epidemic. Reporters learned in March 28th that Shenzhen textile A issued a notice on the progress of arbitration matters, disclosing the above information.

Shenzhen textile A and Jinjiang group's arbitration originated from a stake: Shenzhen textile A at the end of 2016, by introducing Jinjiang group as a strategic investor at the Sheng Bo photoelectric level, the Jinjiang group made a performance promise to Sheng Bo optoelectronics, but in 2019, Sheng Bo photoelectric performance failed to meet the standard.

The dispute between Shenzhen textile A and Jinjiang group on the success of Sheng Bo photoelectric has not been reached. The Jinjiang group has submitted an arbitration to Shenzhen international arbitration court.

The arbitration originated from an investment over 3 years ago.

The notice shows that the Shenzhen international arbitration court received a written application submitted by the Jinjiang group in March 23, 2020. Due to the complexity of the case and the special background of the outbreak, Jinjiang group needs extra time to negotiate with the Shenzhen textile A for procedural matters.

The Shenzhen International Court of arbitration considers that the applicant's request is reasonable. The parties concerned shall be informed of the result of the arbitrator by March 30, 2020 in written notice to the Shenzhen international arbitration court. Therefore, within 15 days from receipt of the arbitration notice in March 9, 2020, Shenzhen textile A has appointed the arbitrator to extend the appointment to the arbitrator before March 30, 2020 and notify the Shenzhen international arbitration court in writing of the result.

The arbitration of Shenzhen textile A and Jinjiang Group originated from a stock subscription.

Shenzhen textile A announced in March 14th that Shenzhen textile A owns a stock holding company, Shenzhen Shengbo Photoelectricity Technology Co., Ltd. (hereinafter referred to as Shengbo Optoelectronics). In order to improve the operation of Shengbo optoelectronics, Shenzhen textile A introduced Jinjiang group as a strategic investor at the end of 2016 by increasing the capital and expanding shares of Shengbo photoelectric level.

? ? ? Jinjiang group's official website introduced the group, founded in 1983, has been involved in textile, printing and dyeing, paper making, cable, building materials, medicine and other fields. After 35 years of development, after three industrial restructuring, it has formed a modern large-scale private enterprise group, which integrates environmental protection, energy, non-ferrous metals and chemical new materials, and integrates trade, logistics, investment and finance. By the end of 2018, the group's total assets amounted to nearly 80 billion yuan, with revenues of nearly 100 billion yuan.

At that time, Shenzhen textile A, Jinjiang group and Sheng Bo optoelectronics three parties jointly signed the establishment of Hangzhou Jinhang equity investment fund partnership (limited partnership) (hereinafter referred to as "Jinhang investment"), Jinhang investment as the main body of the increase to subscribe Sheng Bo photoelectric 40% stake, the capital increase is RMB 1 billion 352 million yuan.

At the same time, the Jinjiang group made a commitment to Sheng Bo optoelectronics: in 2017, 2018 and 2019, the sales revenue and net profit of Sheng Bo optoelectronics were no less than 1 billion 500 million yuan and 50 million yuan, 2 billion yuan and 100 million yuan, 2 billion 500 million yuan and 150 million yuan respectively. In principle, the proportion of sales revenue of polaroid and related optical film products to total revenue is not less than 70% in 2017, and not less than 80% after 2018.

But in 2019, Sheng Bo photoelectric performance failed to meet the standard.

Jinjiang group is called the management system.

Shenzhen textile A2019 annual report shows that Sheng Bo photoelectric in 2019 achieved operating income of 1 billion 840 million yuan, net profit of 89 million 30 thousand and 300 yuan.

For Sheng Bo photoelectric failed to achieve the performance of the reasons, Shenzhen textile A explained that polarizer product prices in 2018 after the sharp decline has been running low, Sheng Po photoelectric main product order structure adjustment is less than expected, coupled with TN/STN The sale of products is greatly affected by the shrinking of the market, and the increase in purchasing costs and the increase in exchange losses caused by the depreciation of the renminbi offset the contribution of the increase in sales to the performance.

Shenzhen textile A said that the actual sales revenue, net profit and sales income of polaroid and related optical film products accounted for the total revenue in the year. The difference between the three indicators and the commitments target was 547 million yuan, 244 million yuan and 6.79% respectively. According to the agreement on cooperation, the Jinjiang group needs to make up the difference in net profit in cash.

However, the Jinjiang group does not recognize the reasons why the performance of the subsidiary companies in Shenzhen textile A is not up to standard.

Shenzhen textile A3 27 announcement shows that in the view of the Jinjiang group, Sheng Bo photoelectric performance is not up to standard, because the Jinjiang group is controlled by the deep textile A and Sheng Bo photoelectric is still implementing the wholly state-owned enterprise management system.

? ? ? Jinjiang group said that because of the above situation, Jinjiang group actually can not dominate the operation and management of Sheng Bo optoelectronics after its capital increase. It can not give full play to the advantages of Jinjiang group in terms of system, mechanism, industry, management and the successful experience of industry integration, but also fails to realize the production linkage, industrial integration and resource integration of Sheng Bo Guang electric power as expected. The same purpose can not be achieved at all, and the Jinjiang foundation has no contract basis for performance commitments and profit complements.

The Jinjiang Group believes that in this case, if the performance commitments and complements obligations under the agreement of cooperation continue to be fulfilled, it will be unfair to the Jinjiang group and can not achieve the purpose of the contract.

Owing to the above disputes, the Jinjiang group has initiated arbitration to the Shenzhen international arbitration court. In March 9th, Shenzhen textile A received the "arbitration notice" served by the Shenzhen international arbitration court.