On January 30, Bank Of China Limited(601988) inter market dealers association (hereinafter referred to as “Dealers Association”) published a notice of self-discipline punishment, informing that Sichuan Languang Development Co.Ltd(600466) (600466. SH), as the issuer of debt financing instruments, had the following two violations:
First, the debt financing instrument “21 Blu ray mtn001” issued by itself is indirectly subscribed with its own funds through asset management products, which distorts the issuing interest rate and destroys the market order.
Second, in the issuance document of “21 Blu ray mtn001”, the commitment that Sichuan Languang Development Co.Ltd(600466) will not directly or indirectly subscribe for debt financing instruments is inconsistent with the actual situation, and the relevant information disclosure is untrue.
“21 Blu ray mtn001” is the first medium-term note of 2021 issued by Sichuan Languang Development Co.Ltd(600466) . It was publicly issued on March 12, 2021. The final successful issuance scale is 1 billion yuan, the fixed coupon rate is 7.2%, and the term is 2 years, that is, it expires on March 11, 2023. China Securities Co.Ltd(601066) securities is the main underwriter and bookkeeper, and China China Minsheng Banking Corp.Ltd(600016) is the joint lead underwriter.
According to the issuance documents, Sichuan Languang Development Co.Ltd(600466) promises that if the effective subscription amount is lower than the basic issuance scale during the issuance process, and it still fails to be solved after raising the interest rate range and bookkeeping and filing again, it will adopt two countermeasures: first, the balance will be underwritten by the lead underwriter China Securities Co.Ltd(601066) securities and China China Minsheng Banking Corp.Ltd(600016) in accordance with the underwriting agreement; Second, the issuance was cancelled.
Meanwhile, as the issuer, Sichuan Languang Development Co.Ltd(600466) also made four commitments, including “our company promises not to subscribe directly or actually funded by the company, but indirectly subscribe for the current debt financing instruments through affiliated companies, asset management products and other means”.
The dealers association determined that Sichuan Languang Development Co.Ltd(600466) had the above two violations, and Sichuan Languang Development Co.Ltd(600466) had the default of multi-term debt financing instruments, which was a situation that should be dealt with severely or aggravated, so it decided to give Sichuan Languang Development Co.Ltd(600466) a serious warning and suspend its business related to debt financing instruments for 18 months; Order them to make comprehensive and in-depth rectification on the problems exposed in this incident; Chi Feng, the then legal representative and President of the company, was warned and identified as an inappropriate candidate for 6 months; Ou Junming, the then financial director of the company, was criticized in a circular.
On July 5, 2021, Sichuan Languang Development Co.Ltd(600466) announced that Chi Feng, then president of Sichuan Languang Development Co.Ltd(600466) , and Ou Junming, chief financial officer, resigned “due to the overall work arrangement of the company”. Chi Feng and Ou Junming resigned from the above positions and continued to serve as directors of the eighth board of directors of the company. At the same time, Yang Wuzheng was appointed as the president (legal representative) and Yang Weiliang as the chief financial officer (Financial Director).
As early as November 9, 2021, Sichuan Languang Development Co.Ltd(600466) received a warning letter from Sichuan regulatory bureau of China Securities Regulatory Commission for violation of the same bond.
Sichuan Securities Regulatory Bureau pointed out that Sichuan Languang Development Co.Ltd(600466) participating in the subscription of “21 Blu ray mtn001” with its own funds violated the provisions of paragraph 1 of Article 2 of the measures for the administration of information disclosure of listed companies (Order No. 40 of the CSRC).
For the punishment of suspending debt financing for 18 months, a bond practitioner said frankly that it had little impact on Sichuan Languang Development Co.Ltd(600466) . “Even if it was not suspended, Blu ray could not raise money (due to the default of multiple bonds).”.
In August 2021, China Securities Co.Ltd(601066) securities announced that the maturity date of “21 Blu ray mtn001” was March 11, 2023. However, due to the failure of the holders’ meeting to form an exemption resolution for cross default, the debt was accelerated to be cashed on July 31, 2021. As of the due payment date, Sichuan Languang Development Co.Ltd(600466) failed to raise sufficient repayment funds as agreed, and “21 Blu ray mtn001” failed to pay the principal and interest in full on schedule, which has constituted a material breach of contract.
Three months later, Sichuan Languang Development Co.Ltd(600466) announced again that “20 Blu ray mtn002” and “20 Blu ray mtn003” could not pay the principal and interest in full on schedule, resulting in material breach of contract. So far, the three domestic bonds constitute a substantial breach of contract, with a total principal amount of 3.5 billion yuan.
On the eve of the dealers association’s notification of violations, Sichuan Languang Development Co.Ltd(600466) disclosed the announcement of performance loss in 2021, received the inquiry letter from the Shanghai Stock Exchange, and was asked to explain the detailed rules and necessity of asset impairment provision, operating loss and asset disposal one by one.
