"Cat And Mouse Game" In The 63Rd Issue Of Shenzhen Regulation: St. Stephen'S Financial Fraud Ended In Delisting

Fake gold is plated with real gold, if it's real gold, it's not.

On June 10, 2021, after the Shenzhen Stock Exchange Company * ST stetai was decided to terminate its listing in accordance with laws and regulations, its shares officially entered the delisting consolidation period. It is a foregone conclusion that this "new Delong" company will withdraw from the capital market stage. Behind this is the fact that * St. Steiner was deeply involved in financial fraud, resulting in losses for six consecutive years, and the "miscarriage" of its seventh annual report, which put him on the road of major illegal compulsory delisting and financial delisting. After careful analysis, we can find that the delisting of * ST is closely related to the series of capital operations in the past and the serial scams caused by it.

Past life and present life: disaster of acquisition

*The origin of St. Stewart's financial fraud starts with the famous plan of purchasing assets through private placement.

At the end of 2012, * ST st st disclosed its plan for private offering of shares. It planned to issue 314 million shares to six specific investors, raising a total of 1.5 billion yuan, to purchase 100% equity of Wuhan Wutong Silicon Valley paradise Investment Co., Ltd. the main asset of the company is 100% equity of Steyr motors, namely Jiangsu Steyr, and the controlling shareholder is changed to Yingda steel structure, The actual controller was changed to Feng Wenjie, and the main business was changed to power system R & D, manufacturing, assembly and sales.

According to the media reports at that time, St. Stephanie was regarded as an important platform for the capital operation of the "new Delong system" after Tang Wanxin was released from prison, and the hidden actual controller behind the specific investors was questioned. The mode of "using M & a funds to complete overseas acquisition + directional additional issuance to purchase assets" adopted in the non-public offering was recognized by the market as a classic case of bypassing restructuring and backdoor. At the same time, the company's share price has been booming under the stimulation of high performance commitment.

A lie needs countless lies to cover up. The original intention of Tang Wanxin and others to carry out a series of dazzling capital operation is not to let the company deeply cultivate its main business development and seek huge profits.

*In the acquisition plan, Yingda steel structure, the controlling shareholder of St steeI, made a high performance commitment of 1.18 billion yuan in three years. Due to the fact that Jiangsu Steyr's core business "diesel engine localization and mass production" has not been realized, the annual performance commitment is not up to standard, the cumulative achievement rate is less than 16%, and the performance compensation is overdue for many times.

In order to reduce the amount of performance compensation and maintain the company's listing status, Tang Wanxin and others planned to implement two technology licensing transactions in 2014 and 2016. In hindsight, although the familiar "ways" and simple "operation" made the company achieve satisfactory "effect", it not only paid less performance compensation, but also successfully made profits in 2014 and 2016, avoiding the suspension of listing of shares. At the same time, it also foreshadows the situation of compulsory delisting of the company.

However, in sharp contrast to the company's performance, the suspected "financial investors" of xindelong group who participated in the non-public offering at the beginning were able to make a substantial profit and wait for the opportunity to clear their positions. In the half year after the share restriction was lifted in 2017, the book profit of the remaining stocks was RMB 1.5 billion.

Back in 2019, * ST Steyr was warned of delisting risk due to two consecutive years of losses in 2017 and 2018, and once again stood on the precipice of suspension of listing. The company disclosed the announcement of debt exemption on January 3, 2020. As long as the company can repay part of the principal before March 31, 2020, the debt exemption income can be included in the non operating income in 2019, so as to realize turning loss into profit in 2019. In the end, the company failed to achieve its wish, and the result of suspension of listing was gloomy.

Perhaps it was the sweet taste of the previous two technology licensing transfers. After the suspension of listing, the company held the banner of "technology licensing" for the third time, in an attempt to avoid delisting. Maybe it was the new horse with the old saddle. Although the technology license version 3.0 directly copied and pasted the previous two transactions, it failed to complete the relevant review procedures by the end of 2020 due to the flaws in the review process.

Just when people think it's time to stop, the company disclosed the "performance forecast 2020" on January 30, 2021, and sent the company to the "safe harbor" in 2020, which realized the product sales revenue of 77.25 million yuan in December. However, the end of the story has already been solved at the beginning. At the last moment, the company gave up the disclosure of the 2020 annual report within the statutory time limit for the reason that it could not reach an agreement with the annual audit accountant, and went to the final delisting without any suspense.

The regulatory game in details

When sorting out the regulatory process of * ST in recent nine years, the reporter found that there were dozens of regulatory inquiry letters in total, which showed that the company was undoubtedly a "frequent customer" of regulatory authorities.

As soon as the plan for non-public offering was launched in 2012, the inquiry immediately followed, focusing on many problems, such as the huge difference between the business situation and performance commitment of Jiangsu Steyr, the performance commitment far higher than the profit forecast, the abnormal value-added evaluation, only one of the six non-public offering investors undertook the performance compensation commitment, and the confirmation of the controlling shareholder was questionable. However, various abnormal regulatory concerns are the root cause of many rounds of financial fraud in the future. The doubt of the actual controller of the company has been confirmed in the "decision on administrative punishment" issued by the CSRC.

*During the implementation of two financial fraud cases from 2014 to 2016, the company may be addicted to the exquisite tricks of self directing and self acting, but it still has not escaped the attention and tracking of the regulatory authorities. From 2014 to 2017, the exchange continuously questioned the authenticity of relevant transactions through the combination of "letter of concern + inquiry letter of semi annual report + inquiry letter of annual report". For example, how a technology with a gross profit rate of - 2.03% can be sold at a high price of RMB 100 million and RMB 200 million. The main business of the company that has transferred diesel engine technology has nothing to do with engine manufacturing, and the license period is as long as 7 years and 10 years respectively, However, they were all recognized as the current income in the year when the contract was signed, and various doubts gradually pierced the veil of falsification and whitewashing. In fact, no matter the above abnormal transactions, debt exemption at the beginning of 2020 and technology licensing and sales at the end of 2020, the daily regulatory inquiry plays a role in making the market understand and understand more clearly. Every "profound interpretation" makes the company's doubtful points hidden.

Finally, the CSRC filed a case and investigated the company, and made a decision on administrative punishment, exposing the illegal facts of the company's bad deeds one by one.

The reporter found that * ST Steyr seems to be a "habitual offender" in violation of regulations. During the period, the CSRC and the CSRC made one administrative penalty, four regulatory measures and seven regulatory concerns on issues such as false records in periodic reports, failure to fulfill performance commitments, repeated changes in performance forecasts, non-standard financial accounting, and non-standard use of raised funds. Due to the failure to fulfill the performance commitment, correction of accounting errors, violation of performance pre notice, failure to make up the flow of raised funds on time, violation of new regulations on reduction of holdings, violation of equity changes and other matters, the exchange has made two public reprimands, one notice of criticism and eight regulatory letters to the company and relevant responsible persons. In addition, the company failed to disclose the annual report of 2020 and the first quarter report of 2021 within the statutory time limit, and the disciplinary procedure was initiated immediately.

In awe: capital market is not a playground of "capital game"

Recently, Yi Huiman, chairman of the China Securities Regulatory Commission, pointed out in his speech at the 7th general meeting of the China Securities Association that good corporate governance is the micro foundation for any company's stability and long-term development. It is necessary to put the foothold of corporate governance on the correct operation behavior and effective risk prevention, further optimize the equity structure, clarify the qualification of shareholders, and standardize the behavior of shareholders, The shareholders should not be absent, misplaced or offside.

Looking back on the history of the capital market of St. Stephanie, it seems that the non-public offering plan in 2012 has doomed to a dismal ending today. The original intention of the new capital's entry and the injection of new target assets is not to increase the investment in scientific research and enhance the gold content of listed companies with the increase of funds. Instead, they become the chips of the capital game. They use capital tools to seek huge improper interests for individuals on behalf of illegal means and trampling on the interests of listed companies and small and medium-sized equity. With the continuous improvement of the regulatory system, the "new Delong system" behavior of manipulating the company's performance and stock price only relying on capital operation or even financial fraud has become unsustainable.

Listed companies, directors, supervisors, controlling shareholders and actual controllers should always be in awe. Practice has proved that all behaviors against laws, regulations and market rules, not fearing risks and harming investors will be punished by law and market and pay a heavy price. Respecting the rule of law, abiding by the rules, and abiding by the law are the insurmountable bottom line. The mainstream logic that should be followed is to revere the specialty, highlight the main business, and refine the specialty. Only by taking the road of steady compliance and focusing on the main business can we smooth down the rough road and seize a seat in the complex competition pattern.

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