After Tus Environmental Science And Technology Development Co.Ltd(000826) (000826. SZ) issued 14 delayed reply announcements, the Shenzhen Stock Exchange issued an ultimatum on the first trading day of the year of the tiger. If it does not reply to the letter of concern on whether it is suspected of serious false increase of assets and financial fraud in October last year, it will implement delisting risk warning.
After being investigated by the media such as Huaxia times and securities times for suspected financial fraud, the special investigation team at the level of Tus Environmental Science And Technology Development Co.Ltd(000826) shareholders also disappeared after publishing the first investigation results.
Now waiting for this delayed public reply announcement is not only the impatient shareholders, the major shareholders who deny fraud, but also the restructuring party City Development Environment Co.Ltd(000885) (000885. SZ) disclosed a year ago.
The reporter of Huaxia times called Tus Environmental Science And Technology Development Co.Ltd(000826) securities affairs department. The other party said that it was organizing relevant personnel to reply to the contents of the two attention letters. The specific time was subject to the time disclosed by the company.
ultimatum issued by Shenzhen Stock Exchange
Tus Environmental Science And Technology Development Co.Ltd(000826) on January 28, after the end of the year of the ox, the stock market issued a low-key performance forecast. It is expected that the net profit loss in 2021 will be 3.8-4.8 billion yuan. The reason for the loss is the provision for asset impairment of suspended projects and projects to be withdrawn; Exit, transfer and dispose of projects with low asset operation efficiency, unsustainable operation and not covered by the company’s overall strategy; For accounts receivable, other receivables, long-term receivables and notes receivable that have substantial obstacles to the recovery of some funds, credit impairment losses shall be accrued.
On February 7, the first trading day after the Spring Festival, Shenzhen Stock Exchange issued a letter of concern to the company, requiring it to list the specific details of asset impairment items, explain whether there is cross period profit adjustment and financial “big bath”, and give a public reply before February 14.
On October 22 last year, the securities times issued a document questioning the serious false increase in the amount of Tus Environmental Science And Technology Development Co.Ltd(000826) 8 projects under construction, and three projects have not even started at all. In this regard, the Shenzhen Stock Exchange issued a letter of concern to Tus Environmental Science And Technology Development Co.Ltd(000826) on the same day, requiring it to conduct self-examination and explain whether multiple projects under construction are suspected of serious false increase of assets and financial fraud.
However, more than three months have passed so far, Tus Environmental Science And Technology Development Co.Ltd(000826) 14 delayed reply announcements have been issued, saying that the workload involved in verification and rectification is large, and the reply has not been submitted.
The Shenzhen Stock Exchange said in this letter of concern: “we remind you that if the company refuses to disclose the material information that should be disclosed in accordance with articles 9.4.1 and 9.4.2 of the stock listing rules (revised in 2022), the exchange may implement delisting risk warning for the company’s stock trading.” This indicates that this letter of concern has been the last Circular of the Shenzhen Stock Exchange.
downgrade credit rating
Investors also seem to have lost patience with Tus Environmental Science And Technology Development Co.Ltd(000826) , from the initial support to the tendency of the company to commit fraud and hope that the regulatory authorities will file a case for investigation.
Although Tus Environmental Science And Technology Development Co.Ltd(000826) has not made an official response to the false increase in profits and financial fraud questioned by the Shenzhen Stock Exchange, its major shareholder tus holdings released the first investigation results in November 2011, saying that the “false increase in construction in progress of RMB 12.7 billion” reported by the securities times was not true, and there was no investigation progress after that. Tus Environmental Science And Technology Development Co.Ltd(000826) told the reporter of Huaxia times that the company was unaware of the progress of shareholders’ work.
On January 18 this year, Tus Environmental Science And Technology Development Co.Ltd(000826) received the decision of Hubei regulatory bureau to order the correction of regulatory measures, and proposed that the company had three problems in violation of laws and regulations. The first was the inaccurate information disclosure. In the reply on July 18 last year, there were differences between the description of the implementation progress of 12 projects under construction and the actual situation.
The second is the inaccurate accounting. The third is that the related parties occupy the assets of the listed company. The office building and dormitory building initially constructed by the company’s Xiangtan project will be continued by the related parties after the suspension, and will be used by the related parties after the completion. Both parties failed to handle the right confirmation, delivery and transfer procedures in time. After the assets of the listed company are occupied, the company fails to fulfill the obligation of disclosure, and the related parties do not provide compensation or pay consideration to the listed company.
This decision reduced the credit rating of Tus Environmental Science And Technology Development Co.Ltd(000826) subject from a + to a -, and the rating outlook remained negative.
restructuring plan pending
From the current decision, the punishment imposed by the regulatory authorities does not involve financial fraud. The reply after three months of “dystocia” will play a vital role in the follow-up regulatory measures. The company’s restructuring party City Development Environment Co.Ltd(000885) may be waiting for this reply.
Since 2018, Tus Environmental Science And Technology Development Co.Ltd(000826) performance has begun to decline significantly. After a continuous sharp decline in net profit in 2018 and 2019, it directly “changed its face” in 2020, with a net profit loss of 1.5 billion yuan.
Tus Environmental Science And Technology Development Co.Ltd(000826) also mentioned many times that due to the influence of industry factors and the overall external financing environment, the company’s overall capital is tightening and the pressure on financial debt repayment is large. At the same time, due to factors such as the turnover rate of accounts receivable of municipal public business, the company’s working capital is in periodic tension.
In January this year, the company announced that City Development Environment Co.Ltd(000885) would absorb and merge Tus Environmental Science And Technology Development Co.Ltd(000826) by means of share exchange, and disclosed the transaction plan. If the reorganization is completed, Tus Environmental Science And Technology Development Co.Ltd(000826) will be delisted.
After media reports questioned the company’s financial fraud, Tus Environmental Science And Technology Development Co.Ltd(000826) controlling shareholder enlightenment holding level information showed that due to the relevant questioning reports, the signing documents of the merger and reorganization audit institution and the special board of directors originally planned to be held on October 22, 2021 were postponed.
At present, it has been more than one year since Tus Environmental Science And Technology Development Co.Ltd(000826) disclosed the restructuring plan, and the restructuring is still in progress. On January 23, Tus Environmental Science And Technology Development Co.Ltd(000826) released the revised trading plan, which said that the financial data need to be adjusted according to the requirements of Hubei securities regulatory bureau, and even major adjustments may be required. If the above situation occurs, it may lead to significant change or even termination of this transaction scheme.
