Back To The Projected Liabilities To Profitability, *ST Busen Relies On Litigation To Protect Its Shell?

The arrival of the annual report season, for the previous "star wearing hat" listed companies, whether the shell will be here. Under pressure, selling houses, selling assets and applying for subsidies are different.

Recently, however, *ST Busen (002569, SZ), which has been losing money for two consecutive years, has made another way.

*ST Busen has issued a notice that it expects the company to turn a profit in 2019. The main reason is that the company intends to return the estimated liabilities of the previously secured litigation cases, amounting to about 69 million yuan.

This has aroused the concern of the Shenzhen Stock Exchange. In April 8th, the Shenzhen Stock Exchange issued a letter of concern to *ST Busen, which asked the listed companies to explain the adequacy of the proposed 2019 year performance forecast. On the evening of April 15th, *ST Busen replied to the letter of concern from the Shenzhen Stock Exchange and explained the related issues.

The lawsuit is not lost is "surplus"?

It is worth mentioning that the above lawsuit is a "left over" problem caused by Xu Maodong, a former *ST real controller of Busen, which involves several collateral liability for loan disputes. According to the announcement, *ST Busen estimated 148 million yuan of projected liabilities for related litigation in 2018.

According to the reply announcement of *ST Busen's letter of concern to the Shenzhen Stock Exchange, *ST Busen explained the latest progress of the case and the issue of the callback liabilities.

Among them, the Deqing County small and Medium Enterprises Financial Service Center Limited (hereinafter referred to as Deqing financial) litigation cases are as follows: in December 13, 2019, the company signed a "reconciliation agreement" with Deqing finance, and agreed to repay the Deqing finance for 30 million yuan in a lump sum. As the company reported a projected liability of 50 million 740 thousand yuan in 2018, it was expected to return an estimated liability of $20 million 740 thousand in 2019.

In another case, the *ST Busen was not included in the defendant's ranks because of the forgery of the official seal and so on. In this regard, the original estimated debt of 56 million 850 thousand yuan was all turned back.

In addition, in the case of Shenzhen Xin Rong financial Cci Capital Ltd, the related liabilities of 2018 yuan were estimated to be 40 million 220 thousand yuan. In 2019, it was expected to turn back the estimated liabilities of 8 million 610 thousand yuan. In the case of Shenzhen Qianhai Sinon Financial Holding Group Co., Ltd., 2019 yuan was expected to make an estimated debt of 17 million 540 thousand yuan.

Reporters noted that the current two cases of the above cases have not yet ended, whether the follow-up can be as sure as the company wishes. In this regard, *ST Busen also pointed out in the announcement that the company's management believes that up to now, no legal evidence has been found before judging the new overturn, and no circumstances have been found to predict the indebtedness of the debt. There is no need to correct the performance notice. Shape. However, new evidence and new legal opinions are not excluded, resulting in the revision of performance.

On the other hand, due to the impact of the epidemic, the company said that the audited institutions have not yet completed all the audit procedures, whether the company's net profit in 2019 can turn a profit or not, based on the final opinion given by the accounting firm.

Related senior financial personage told reporters that the listed companies protect the shell "show financial skills" is not uncommon, especially in 2018 many companies to mention the huge impairment, to finance "bathing" also has the next year "operation" mentality. "Similar litigation, if there is enough assurance, there is room for interpretation, but audit institutions will certainly have opinions. Whether we can really achieve it depends on whether the audit is accredited."

Five years four for real controllers

In fact, as the parent company of the famous men's clothing brand "Busen", *ST Busen became a capital plaything in less than ten years after its listing in 2011.

Since 2015, Busen group began to sell the shares to the real controller. In the past five years, *ST Busen has changed hands three times, while the former two largest shareholder, Shanghai Rui Wei asset management partnership (limited partnership) and Chongqing an Han Shi Technology Co., Ltd. have been investigated by the SFC on suspicion of Information Disclosure Violation of laws and regulations. Among them, the second real controller Xu Maodong and his "Star River" implicated *ST Tianma and Busen *ST lawsuits, and third real controllers Zhao Chunxia and her love investment platform were also unable to protect themselves.

In five years, *ST Busen, under the leadership of Xu Maodong, is preparing to transform traditional clothing enterprises into a one stop financial service company, which has been intending to transform into new retail businesses in the period of Zhao Chunxia control. But with the two people leaving the scene, the relevant plans are not clear.

At the same time, the company's performance has never been improved. In addition to making profits through resale of assets in 2016, the company continued to lose money in 2017 and 2018. It was implemented in 2019 2019, and the stock abbreviation became the current "*ST Busen". In July 2018, Zhao Chunxia's core asset "love investment" exploded, and the platform appeared to be overdue.

In May 2019, Beijing Dongfang Heng Zheng technology and Trade Co., Ltd. (hereinafter referred to as Dong Heng Zheng) acquired 16% stake in *ST Busen through judicial auction and became the largest shareholder of the company. Then, because the former Zhao Chunxia team continued to hold the board of directors and board of supervisors, Dongfang Heng was once co operating with other small and medium-sized shareholders in "facing the palace". Until October 2019, Wang Chunjiang was elected chairman of the listed company. Finally, the Zhao Chunxia team completely withdrew.

Related industry insiders told reporters that *ST Busen after experiencing frequent changes in the actual control of the people can be seen as badly injured, not only missed the opportunity for men's clothing business transformation, nor completed the appropriate asset restructuring, in the overall economic situation and the impact of the epidemic situation, that is, the success of the shell, the follow-up operation is still a difficult problem for the new controller.

It is worth mentioning that in the evening of February 23rd, *ST Busen announced that in order to further optimize the industrial structure and ease the pressure on company funds, the company intends to transfer the 10% stake in Beijing Mccauley Technology Co., Ltd. to Yi Lian Hui (Beijing) Technology Co., Ltd., and the share transfer amount is 20 million yuan. The reporter noted that the acquisition time of the stake was at the end of 2018, and no change had been achieved.

According to the announcement, *ST Busen realized its operating income of 284 million yuan in the first three quarters of 2019. The net profit attributable to shareholders of listed companies was 40 million 28 thousand and 300 yuan. In response to the current audit situation and how to improve the follow-up business pressure, today (April 16th), the reporter sent a call to *ST Busen secretaries. Staff said that the company involved in business and other issues, need to send mail through the understanding of the secretaries before answering. Subsequently, the reporter sent a relevant letter to the company's mailbox, but as of press time yet to receive a reply.

As of today's closing, *ST Busen shares reported 8.79 yuan / share, down 3.83%.