Printing And Dyeing Giant *ST Entered The Delisting And Finishing Period.

Dressed in Fujian's "100 key enterprises", one of the three major printing and dyeing enterprises in Fujian, and the "*ST first share" and other dazzling names of the public, and with the recent decline in performance, executives suspected of using the letter to mislead the anticipation, two years cash in 1 billion 400 million yuan, the chairman suspected of contract fraud and misappropriation of funds, so that the company of the top of the rings is gradually falling down, step by step toward the end of the delisting.

Delisting way

In May 18th, *ST announced the announcement on the termination of the company's stock market. The Shenzhen Stock Exchange announced in May 17th that it had decided to terminate the *ST public and stock listing. In May 27th, the *ST public entered the delisting and finishing period, and the Shenzhen stock exchange delisted the company's shares on the next day after the expiration of the delisting period.

After the company's stock is terminated, it will be pferred to the share pfer system of the small and medium-sized enterprises in the whole country for share pfer.

Announcement information shows that *ST and the net profit of audited 3 consecutive accounting years in 2015, 2016 and 2017 were negative, and the company's shares were suspended from May 15, 2018.

The 2018 annual report disclosed by the company shows that the net profit attributable to the owners of the parent company in 2018 is -5.73 billion, and the net assets attributable to the parent company owner are -11.03 billion yuan.

*ST joined the A stock market in October 2006. The main business of the company is the development, production and sale of medium and top grade cotton casual wear fabrics.

Founded in 1993, its predecessor is Fujian Putian Hua Lun welfare printing and dyeing Co., Ltd.

Since *ST and its listing, it has set a peak net profit of 84 million 560 thousand yuan in 2010, but its performance has started to decline since then.

Relevant data show that from 2010 to 2014, the net profit attributable to the company was 84 million 560 thousand yuan, 68 million 720 thousand yuan, 41 million 470 thousand yuan, 42 million 90 thousand yuan and 13 million 340 thousand yuan respectively.

With the continuous decline of performance, *ST and its first loss since listing in 2015, continued losses in the next few years failed to achieve profitability.

Relevant data show that from 2015 to 2018, the net profit attributable to the company was -1.47 billion yuan, -1.99 billion yuan, -10.4 billion yuan and -5.73 billion yuan respectively.

The criteria for withdrawal of A share companies due to performance factors are to suspend the listing for 3 consecutive years (temporarily retaining the code and qualification). If they continue to lose money in the next 6 months, they will be faced with delisting.

In May 15, 2018, *ST and the 3 consecutive years of losses were suspended, and the fourth year loss road finally reached the end of the delisting.

At the beginning of May 2019, Shanghai and Shenzhen Stock Exchange issued the overall analysis report of the annual report of Listed Companies in 2018, all of which emphasized the delisting system.

The Shenzhen Stock Exchange said that the delisting system is a basic system for the capital market to achieve the survival of the fittest and orderly advance and retreat.

In order to further improve the quality of listed companies and optimize the market ecosystem, the withdrawal of Listed Companies in recent years has been gradually marketization, legalization and normalization.

The Shanghai Stock Exchange said that we should further implement the delisting system, dredge the export channels of capital markets, and speed up the clearing of inferior enterprises such as major illegal companies, zombie enterprises and shell companies, so as to promote the ecological purification of the market.

The fall of "the first stock of Putian"

Now *ST has gone to the stage of delisting and has a glorious history. It once held an indispensable position in Putian. It is known as "the first stock of Putian".

*ST and the founder of Xu Jin and his son Xu Jiancheng took over as chairman of the company in 2011. When the stock market soared in 2011, *ST and its market capitalization were once 20 billion yuan, and the sons and daughters of Xu Jiancheng and Xu Jiancheng were worth billions of dollars.

In 2010, *ST and the original textile printing and dyeing industry began to decline. In 2011, when Xu Jiancheng, 31, became the helmsman of the company, he did not continue to support and carry forward his original business. Instead, he made a diversified development and stepped into the steel industry.

However, after the outbreak of the Shanghai steel trade incident in 2012, a series of credit crises were triggered, and *ST's hidden troubles gradually exposed.

Or in order to stabilize the stock price, *ST and others turned to the new energy industry to seek development, and relied on the concept of new energy in 2016 to bring the stock price back to a high level of 30 yuan / share.

Although the new concept of new energy helps *ST and its stock price rise, it has failed to save the fall of "Putian's first stock".

In July 2012, *ST announced a framework agreement to acquire the controlling stake in Xiamen Silk Trading Co., Ltd. from the Xiamen Huangyan Trading Co., Ltd. through holding shares and increasing capital, thus holding ABA Minfeng Lithium Industry Co., Ltd. (hereinafter referred to as "Min Feng lithium industry") and Shenzhen Tianjiao Technology Development Co., Ltd., the most important asset of Minfeng lithium industry is Barkam's Jin Xin mining, known as "China's first lithium mine".

In the pfer of shares in Fujian Feng Li holding company, Xu Jiancheng used capital operation to shift shares again and again to avoid liability, and refused to pay the remaining funds of the contract, which further led to *ST's dilemma.

Before the suspension of listing and suspension in May 2018, *ST and its stock price were fixed at 3.92 yuan / share, up from the high level of 2016 June, and the cumulative decline has exceeded 85% during the period. Compared with the market value of nearly 20 billion yuan at the peak, it has only 2 billion 490 million yuan left.

Holding more than 60 thousand shareholders of the stock is facing a feather.

It is worth noting that according to public information, *ST and the actual controller Xu Jinhe, Xu Jiancheng and his son from March 18, 2015 to April 28, 2017, the total holdings of *ST holdings and shares nearly 20 times, a total cash of about 1 billion 400 million yuan.

Some investors questioned: "Xu's father and son already had plans to make a run after cash."

In addition, since 2013, Xu Jinhe and Xu Jiancheng have been listed in the list of "dishonest executors" more than 20 times, and the foreign debts that have not been paid up to have been as high as 1 billion 300 million yuan. *ST Zhonghe has also repeatedly boarded the blacklist of blackmail.

The chairman is suspected of fraud.

In May 2017, *ST and Xu Jiancheng, chairman of the board, were arrested on suspicion of contract fraud. At that time, *ST and many of them had been issued a non-standard audit opinion for 18 consecutive years due to the loss of their Cape stars and their annual reports. They suffered directly from the 18 limit, creating the biggest fall in the year.

In August 16, 2017, Xu Jin submitted the "letter of notification" that he plans to pfer his own and Xu Jiancheng's controlling rights to the public and shares in the near future through the pfer of shares and voting rights, so as to repay all debts that he himself and he has built.

In September 26, 2017, *ST received the notice of investigation by the China Securities Regulatory Commission on Xu Jiancheng, chairman of the company. The Commission decided to investigate Xu Jiancheng because of suspected illegal disclosure of information.

In May 30, 2018, the Fujian Securities Regulatory Commission issued the decision on administrative penalty that there was a false record of *ST's public and some periodic reports in 2016 and 2017. At the same time, it did not disclose in a timely manner the important contracts that failed to repay the debts that were due to maturity, the major assets were sealed up, the equity of the subsidiaries pferred, and the chairman of the company Xu Jiancheng was coercive measures by the judiciary.

Administrative penalties provide strong evidence for investors to prove that companies have false records, misleading statements or major omissions.

Any investor who buys and holds *ST shares and shares between March 22, 2017 and May 11, 2017 has the qualification to claim compensation from the company for investment losses.

Song Yixin, deputy director of Shanghai Han Lian law firm and vice president of the Shanghai law society's Financial Law Research Association, told lawyers in the China Times reporter that at present, hundreds of claim cases have been received from *ST public and stock rights claims. At the stage of filing, the company's delisting does not affect investors' rights to litigation. Investors with rights and interests can sue to court and recover losses through legal means.

In April 18, 2019, Xu completed the case of suspected contract fraud and misappropriation of funds in public hearing in Wenchuan County People's Court of Sichuan province.

Xu Jiancheng was prosecuted by the prosecution for alleged contractual fraud, involving an amount of about 300 million yuan. He suspected of misappropriating the mining rights of his Barkam Jin Xin Mining Co., Ltd. (hereinafter referred to as Jin Xin mining), to lend 200 million yuan to the China financial trust, which was used to pay the personal repayment bond to the second intermediate people's Court of Beijing.

*ST and the two main businesses, the traditional textile and dyeing plates are flagging, and are seeking to gradually sell off.

The new energy sector, the core assets of Minfeng lithium industry, Jin Xin mining's external financing 200 million in 2015, the cost up to 17%/ years, there has also been overdue breach of contract, mining rights are applied for implementation auction.

In May 2018, *ST and once introduced the Xingye mining industry (4.910, -0.01, -0.20%) to grant this default claim and provide funds, but because the upper level stake of Jin Xin mining was frozen by law, it could not be pushed forward.

Mo Hongbin and *ST resigned frequently. In July 2017, vice president of the company resigned to the board of directors for personal reasons. In September 30, 2017, Zhu Fuhui, the independent director of the company, suggested that he was unable to perform his duties because of his busy personal work. In September 30, 2017, he resigned as director, vice president and Secretary of the board for personal health reasons. In November 2, 2017, vice president Zhang Ziyi submitted his resignation report for personal reasons.

In August 10, 2018, Zhu Xiaopin resigned from the company's board of directors and board of auditors for personal reasons.