The Post-80S Chairman Reduced His Holdings And Cashed In 461 Million Yuan, Suspected Of Insider Trading, And The Stock Price Fell Sharply. Jinke Culture Was Exposed

Jinke culture (300459. SZ), whose chairman was put on file for investigation, fell 12.18% at the opening of December 22 and closed down 9.92% to 3.18 yuan / share.

On the evening of the previous day, Jinke culture announced that it was learned that Wang Jian, chairman of the board of directors, was suspected of insider trading due to the reduction of shares of the company from November 2019 to March 2020, and was investigated by the CSRC.

Jinke culture stressed that this investigation is aimed at Wang Jian's personal investigation and has nothing to do with the company. The investigation will not affect his normal performance of duties in the company and the company's production and operation activities.

On the morning of December 22, the 21st century economic report called Jinke culture and securities affairs department, and the staff said, "we don't know what kind of insider trading is involved in" (Wang Jian). This is a personal investigation. "Ultimately, it depends on the investigation results of the CSRC and the corresponding punishment decisions.

According to the above-mentioned securities affairs department, "as chairman of the board, Wang Jian will still preside over the work of the general meeting of shareholders.". The general meeting of shareholders mentioned by this person is the fifth extraordinary general meeting of shareholders in 2020 to be held by Jinke culture on December 24.

The chairman of the board of directors is suspected of insider trading and cashing 461 million

According to public information, Wang Jian, the chairman of the board born in 1988, graduated from a university with technical qualifications of software designer, network engineer and system analyst of the Ministry of industry and information technology. Hangzhou zhexin Information Technology Co., Ltd. was founded in May 2010 as executive director and manager. Since October 2014, he has been the chairman and general manager of Hangzhou zhexin Information Technology Co., Ltd.

On September 14, 2015, Zhejiang Jinke, which had been listed for only four months, suspended trading and planned for major asset restructuring. At the end of December of that year, Zhejiang Jinke acquired 100% equity of Hangzhou zhexin Information Technology Co., Ltd. jointly held by Wang Jian and other 9 participants with a price of 2.9 billion yuan (issuing shares and paying cash), and included mobile game assets under its management.

Wang Jian obtained 285 million shares of Jinke culture due to his participation in the non-public offering and conversion of capital reserve to share capital. The lock-in period is 36 months from the end of the issue.

At the same time, Wang Jian began to perform his duties in Listed Companies: from August 2016 to June 2020, he served as the director and general manager of Jinke culture, and since June 2019, he has been the chairman of Jinke culture.

As soon as the lock-in period was over, Wang Jian, who had only two days as chairman of the board, opened the mode of reducing holdings.

On June 19, 2019, Jinke culture announced that Wang Jian intends to reduce his holding of no more than 2% of the company's shares in the next six months. The reason for the reduction is to repay the financing funds of stock pledge, so as to reduce the proportion of stock pledge. At that time, Wang Jian held 17.85% shares of listed companies.

According to the statistics of 21st century economic report, during the five months from November 2019 to March 2020 suspected of insider trading, Wang Jian reduced his holdings nine times. According to the number of shares reduced and the average price of reduction, the total cash realized was about 461 million yuan.

Three possible consequences of the chairman being investigated

Although Jinke Culture said that "this investigation is aimed at Wang Jian and has nothing to do with the company", the staff of the Securities Affairs Department of Jinke culture also made it clear that Chairman Wang Jian would attend and preside over the general meeting of shareholders to be held on December 24, but legal professionals have different views on this.

On December 22, Li Jian, a lawyer from Zhejiang Yufeng law firm, told the 21st century economic report that the chairman of a listed company was investigated by the China Securities Regulatory Commission (CSRC) for being suspected of insider trading during his term of office. The statement that "the investigation is targeted at individuals and has nothing to do with the company" is difficult to convince.

Li Jian further pointed out that "referring to past cases, there may be three possibilities for follow-up development. One is that the securities regulatory department only investigates the case that the chairman of the board of directors is suspected of insider trading; the other is that the securities regulatory department then carries out a case investigation on the suspected information disclosure violations of listed companies. The typical case is that Yang Huaijin, chairman of Hairun PV, was punished by the CSRC for being suspected of insider trading, and the CSRC will punish Hairun PV Third, if the illegal circumstances of insider trading are serious, the parties may be investigated for criminal responsibility of the crime of insider trading. "

Li Jian believes that the announcement disclosed that "the reduction of shares of the company during the period from November 2019 to March 2020 is suspected of insider trading", in which the time point of March 2020 is very important. "If insider trading occurs before March 1, 2020, it shall be punished according to the old securities law; if the insider trading continues after March 1, 2020, it shall be punished according to the new securities law. If it is punished according to the new securities law, the illegal cost will be greatly increased, and the fine will be changed from 1-5 times of the illegal income to 1-10 times of the illegal income. If there are no illegal gains, the fine imposed shall be increased from 30000 yuan to 600000 yuan to 500000 yuan to 5000000 yuan. "

"During the investigation period of the CSRC, it can be considered that he (Wang Jian) can perform his duties normally. After the completion of the investigation, if it only involves illegal reduction, it is nothing more than confiscating the illegal income and returning it to the company in accordance with the provisions of the company law. If insider trading is involved, it shall be subject to administrative punishment or transferred to the public security organ for criminal responsibility. " On December 22, Yu Jiong of Shanghai Gongyi law firm also told the 21st century economic report.

Illegal reduction in financial reporting sensitive period?

Jinke culture announcement clearly states that Wang Jian, chairman of the board, is suspected of insider trading from November 2019 to March 2020. What kind of undisclosed information is Wang Jian most likely to use to reduce his holdings and cash out?

According to the statistics of 21st century economic report, there are 50 announcements in this period, one of which is the most critical one, which is related to the performance forecast of Jinke culture in 2019.

On February 28, this year, Jinke culture released its 2019 performance express, with an estimated performance loss of 2.399 billion yuan. It pointed out that the main reason was the company's expected goodwill impairment and other asset impairment.

Five months later, the Shenzhen Stock Exchange issued a public notice of criticism to Wang Jian on July 17 this year, which revealed the mystery.

Within the first ten days of the release of the above performance express, Wang Jian reduced 11.2413 million shares of Jinke culture stock by means of centralized bidding due to compulsory closing positions, accounting for 0.32% of the total equity of Jinke culture, involving an amount of 48.23 million yuan.

In this regard, the Shenzhen Stock Exchange pointed out that "the above reduction occurred within 10 days before the disclosure of Jinke culture's performance express in 2019". Wang Jian's above-mentioned behavior violated the provisions of articles 1.4 and 3.1.11 of the Listing Rules of GEM stocks (revised in November 2018) and article 3.8.17 of the guidelines for the operation of the rules for listed companies on the gem (revised in 2015). In view of the above facts and circumstances, the Shenzhen Stock Exchange issued a notice of criticism to Wang Jian, which was recorded in the integrity file of the listed company.

This is not the first time that Wang Jian has been exposed to illegal reduction of holdings during the financial reporting sensitive period.

On June 15, this year, a notice disclosed by Jinke culture clearly stated that Wang Jian disclosed the reduction plan on January 13, 2020, and his plan to reduce the company's shares by centralized bidding trading in the next six months after 15 trading days from the disclosure date of the reduction announcement, accounting for 2% of the total share capital of the company. As of the disclosure date of the announcement, Wang Jian has reduced his holding of 53054692 shares, and the reduction plan has not been completed. In this equity change, some of Wang Jian's reduction behavior does not conform to the "Shenzhen Stock Exchange GEM Listing Rules" and other provisions.

Moreover, on February 4 at the beginning of this year, the Shenzhen Stock Exchange also issued a supervision letter to Wang Jian, pointing out that during the period from August 15 to August 27, 2019, and from October 16 to October 21, 2019, the total amount involved was about 57.99 million yuan due to the compulsory closing position and centralized bidding. The above reduction occurred within 30 days before the disclosure of Jinke culture's half annual report and the third quarter report in 2019, constituting a sensitive period transaction.

Jinke culture hidden thunder to be eliminated

Jinke culture's performance loss in 2019 is remarkable.

On March 5, this year, the Shenzhen stock exchange sent an inquiry letter to Jinke culture, asking the company "whether there is a situation of profit adjustment through the provision for large amount of asset impairment".

By April 29, 2020, Tianjian certified public accountants, as the audit institution of annual report, issued qualified opinions on the annual report of Jinke culture in 2019, mainly involving "funds occupied by related parties", "provision for impairment of IP copyright of intangible assets", "provision for impairment of long-term equity investment and accuracy of fair value of other equity instruments".

From 2018 to April 2020, Jinke culture was occupied by the controlling shareholder Jinke Holding Group Co., Ltd. and its related parties for non operating purposes. The balance of occupation at the end of each period was 211 million yuan, 1.55 billion yuan and 1.67 billion yuan respectively.

Although the above occupied principal and interest have been returned, Tianjian certified public accountants pointed out that "sufficient and appropriate audit evidence has not been obtained to confirm whether the amount of funds occupied by related parties of Jinke Culture Co., Ltd. is accurate, and sufficient and appropriate audit evidence has not been obtained to judge the recoverability of the funds illegally occupied by Jinke culture company."

In addition, Jinke culture's provision for impairment of IP copyright of intangible assets in 2019 is 239806700 yuan, including IP copyright purchased in 2019 (original value of 113.6816 million yuan).

Tianjian certified public accountants believes that "in addition to the brief description of impairment provided by the company, we are unable to carry out further audit procedures to obtain sufficient and appropriate audit evidence to judge the accuracy and rationality of the provision for impairment of IP copyright of intangible assets."

The audit opinion issued by Tianjian certified public accountants shows that there are hidden worries about the financial health of Jinke culture.

The style of Jinke culture is also intriguing.

On December 9, Jinke Culture issued an announcement to change the audit institution from Tianjian to Lixin.

In this regard, on December 14, the Shenzhen Stock Exchange also issued a letter of concern, asking Jinke culture to explain one by one the progress in solving the issues involved in the qualified opinions in the 2019 annual audit report and whether the impact on the company's financial report has been eliminated; it is important to disclose the reasons for the new appointment of Lixin Accounting firm and whether the impact of the company's and Tianjian's qualified opinions on the financial report of 2019 is eliminated Big controversy, etc.

At this time, Jinke culture also changed its financial director.

On October 23 this year, Wang Jian, who was also the financial director of Jinke culture in August 2019, resigned for personal reasons, and Qin Haijuan was appointed as the new financial director. The term of office is from the date of deliberation and approval by the board of directors to July 7, 2023.

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