A series of equity transfer issues before the company’s listing are particularly worthy of attention.
Editor’s note: This article is from the micro-channel public number “IPO knew” (ID: ipozaozhidao) , Author: Stone Jin.
Ruixing management, relevant investors and intermediaries will be severely punished.
According to the exclusive information of the company’s intelligence expert “Financial Graffiti”, shortly after Ruixing self-disclosed financial fraud, the US Securities and Exchange Commission (SEC) has sent a letter to the China Securities Regulatory Commission to cooperate with the CSRC on both sides Communicate the investigation of Ruixing Coffee.
The Chinese side ’s actions on the Ruixing incident also lasted for the past three weeks.
At the press conference of the State Council Office held on the morning of April 22, Cao Yu, vice chairman of the China Banking and Insurance Regulatory Commission, responded to the “Ruixing Coffee Financial Fraud Event”: “The Ruixing Coffee Financial Fraud Event is of a bad nature The lessons are profound. The China Banking and Insurance Regulatory Commission will resolutely support and actively cooperate with the competent authorities to severely punish according to law. “
This is not the first time domestic regulatory authorities have spoken about the “Ruixing incident”. On April 3, the second day after Ruixing exposed its false increase of RMB 2.2 billion in revenue, the China Securities Regulatory Commission issued a statement saying, “It strongly condemns financial fraud. No matter where it is listed, listed companies should be strict. Comply with the laws and rules of the relevant market, and fulfill the obligation of information disclosure truthfully and completely. “
In the past three weeks, led by the International Department of the China Securities Regulatory Commission, and in conjunction with multiple departments, a lot of investigation work has been done on the “Ruixing Incident”. According to people familiar with the matter, the punishment plan is still under discussion, and the punishment may exceed the market imagination.
Informed sources said that combating financial fraud is the top priority of the relevant departments, and will further strengthen the supervision of listed companies and the penalties for financial fraud.
Strict investigation and strict judgment are inevitable Undoubtedly, the official used the extremely harsh wording for “Ruixing Incident” twice in a row, which also reflected from one side that both the China Securities Regulatory Commission and the China Insurance Regulatory Commission were extremely dissatisfied with the fraudulent acts of Ruixing Coffee. The above statement will only be a prelude to further investigation and corresponding punishment in the future.
It is worth noting that the aforementioned statement of the China Securities Regulatory Commission clearly mentioned that “Ruixing Coffee is registered in the Cayman Islands, is registered by an overseas regulatory agency to issue securities and is listed on the NASDAQ stock market in the United States.”
In other words, even though Ruixing Coffee is legally an overseas company, as an enterprise operating in China and almost entirely operated by a Chinese team, it must be subject to the supervision of the China Securities Regulatory Commission.
This also indicates that no matter whether it is listed on the stock market, whether it is listed on the A share or overseas, as long as it operates in the country, once there are acts of counterfeiting and deceiving investors, strict management, strict investigation and strict judgment are also in place. Can not escape.
Is there a survivor?
Here we have to talk about a topic that has been hotly discussed for a long time-does Liu Jian, chief operating officer of Ruixing Coffee, do the financial fraud of up to 2.2 billion yuan? I believe almost everyone is skeptical.
Core management such as Lu Zhengyao and Qian Zhiya, the two major shareholders of Dazheng Capital and Joy Capital, and several intermediaries, what role do they play? Do you really know nothing?
The signs of the past half month indicate that the impact of the Ruixing incident is continuing to ferment.
On April 9, the British “Financial Times” reported that Lu Zhengyao considered resigning from the post of chairman of Shenzhou Car Rental to prove that the group is independent of Ruixing Coffee; on April 13, Shenzhou UCAR (OC: 838006) announced Allegedly, the major shareholder Lu Zhengyao and other four shareholders held voluntary sales of shares, accounting for 5.8% of the total share capital; on the morning of April 22, information from the Hong Kong Stock Exchange showed that Huaping Investment had completed the car rental of Shenzhou (00699 .HK) First in sharesBatch acquisition, once the second batch of acquisitions is completed, Huaping’s shareholding ratio will increase to 27.22% to become the largest shareholder of car rental in China.
The days of investment institutions are also not very good.
Among them, Joy Capital held a partner meeting at the first moment of the incident to discuss with the legal adviser how to protect the interests of LP. An internal document that has been exposed shows that the No. 2 fund and the Opportunity Fund of Yu Yue Capital invested US $ 33 million and US $ 49 million, respectively, accounting for 10.3% and 15% of the total size of their respective funds.
Obviously, the current book value of this part of the investment is almost negligible, and it can be described as a heavy loss.
As for the big Zheng capital that has cashed out in advance, although the performance of the first phase of the fund will not produce too much loss, it has a great impact on the subsequent fund raising. A senior investor commented on “Financial Graffiti” that Dazheng Capital no longer has the ability to continue to raise funds.
In early March, Reuters reported that the second phase of the US dollar fund of Dazheng Capital will close its first round of accounts at the end of March, raising approximately US $ 2 billion. The total fund size is expected to be US $ 2.5 billion. A recent report in the Wall Street Journal pointed out that the fundraising plan has been blocked.
In addition, the current voice in the VC circle is that the occurrence of this event will cause great difficulties to the US dollar funds that are being raised and the subsequent US dollar funds that are ready to raise funds. After all, Dazheng Capital and Joy Capital There is no shortage of highly influential organizations on the LP list. How to solve the trust crisis of the entire industry has become a top priority.
The aforementioned personages informed the “Financial Graffiti” that Ruixing management, relevant investors and intermediaries will be severely punished.
Reshaping financial norms and market confidence
A realistic background that needs to be pointed out is that the new Securities Law amended at the end of 2019 will be implemented from March 1, 2020. The main changes include the substantial increase in the cost of violating laws and regulations and the improvement of the disclosure system.
For example, “Chapter 13 Article 181” pointed out, “The issuer conceals important facts or fabricates major false content in the securities issuance documents announced by it. If it has already issued securities, the amount of funds raised illegally shall be punishable. A fine of more than 10% and less than double. “This penalty is significantly higher than the fine of up to 5%.
The “Chapter V Article 85” states that “the information disclosure obligor has not disclosed the information as required, or the published securities issuance documents, periodic reports, interim reports and other information disclosure materials have false records and are misleading. Sexual statements or major omissions that cause investors to suffer losses in securities transactions, the obligor of information disclosure shall be liable for compensation; the issuer ’s controlling shareholders, actual controllers, directors, supervisors, senior management and other directly responsible personnel and sponsors Persons, underwriting securities companies and their directly responsible personsWith liability for compensation, except those who can prove that they have no fault. “
The changes in the scope of the rules here have strengthened the timely notification and disclosure obligations of the controlling shareholders and actual controllers. In other words, the actual controller and the individual controlling shareholder will also pay for the false statement instead of being solely responsible in the name of the company.
“Article 95 of Chapter VI” shows that “when investors file lawsuits for securities civil compensation such as false statements, the subject matter of the litigation is of the same type and there are a large number of parties, the representative may be elected according to law. If a lawsuit filed in accordance with the preceding paragraph may have many other investors with the same lawsuit request, the people’s court may issue an announcement explaining the case of the lawsuit request and notify the investor to register with the people’s court within a certain period. The people’s court The judgments and rulings made have effect on the investors who participated in the registration. “
Specifically, once a shareholder wins a lawsuit against a listed company due to financial fraud, other registered shareholders automatically enjoy the same compensation.
As far as Ruixing Coffee is concerned, as long as the minority shareholders win the lawsuit with Ruixing Coffee, other minority shareholders automatically enjoy compensation.
Activity shareholders have taken action. On the afternoon of April 22, Beijing Weinuo Law Firm Yang Zhaoquan revealed to the media that domestic investors had sued Ruixing Coffee and applied for the case to be filed. The indictment has been submitted to the Xiamen Intermediate Court by mail. “In the first batch of 10 cases, a domestic claimant bought it for $ 26.9, and then sold it for $ 6.3, with a loss of more than 70%.”
At the same time, the new “Securities Law” has also written investor protection institutions into law for the first time to give investors more comprehensive and adequate protection.
Therefore, on the positive side, once the Ruixing incident is finally severely punished, it will prove to the global capital market that the Chinese regulators uphold the “fair, just, open and severe penalties for financial fraud” attitude and determination, Build confidence for international investors to continue investing in the Chinese market.