On February 8, China Publishing & Media Holdings Co.Ltd(601949) (601949, SH) announced that its wholly-owned subsidiary China democracy and legal publishing house Co., Ltd. (hereinafter referred to as democracy and legal publishing house) and Beijing Faxuan new era enterprise management consulting center (limited partnership) (hereinafter referred to as Faxuan new era) had dissolved the acquisition agreement on 51% equity of Beijing Faxuan Online Technology Co., Ltd. (hereinafter referred to as Faxuan online company).
The reporter of “daily economic news” noted that what triggered the “return” was a big decline in the performance of the acquisition target in 2021. The audited net profit of the company is far lower than 949 {6019} in 2029, so it is determined that the net profit of the company is far lower than 941} in 2029.
However, there are differences in the payment of termination compensation. The transferor did not recognize the claim that the listed company should pay liquidated damages on the grounds that the epidemic affected the performance.
the performance of the acquisition target fell sharply
In 2019, the Democratic Legal System Publishing House signed an equity acquisition agreement with Faxuan new era to purchase 51% of the equity of Faxuan online company held by Faxuan new era at a price of 214 million yuan. According to the announcement of China Publishing & Media Holdings Co.Ltd(601949) relayed on Faxuan online website, Faxuan online officially became the holding company of China Publishing & Media Holdings Co.Ltd(601949) democracy and legal publishing house, a wholly-owned subsidiary of China Publishing & Media Holdings Co.Ltd(601949) , “realizing indirect M & A and listing”.
According to the announcement, Faxuan online company was established in May 2013, focusing on online law popularization education, Faxuan cloud platform, law popularization media machine, new media operation and audio-visual research and development of law popularization books, and engaged in the research and development and promotion of law learning usage and examination platform for national staff. Its subsidiaries include Beijing renrenlv intelligent Big Data Technology Co., Ltd. and China Beidou (Beijing) Internet of things Technology Co., Ltd
Source: fax online, official account No.
At that time, Faxuan new era promised that from 2019 to 2022, the net profits of Faxuan online company were more than 30 million yuan, 36 million yuan, 43.2 million yuan and 51.84 million yuan respectively.
Two years before the performance commitment, Faxuan online company successfully completed the task. In 2019 and 2020, the audited net profit of Faxuan online company was 31.12 million yuan and 36.73 million yuan respectively, which met the net profit requirements of the promised performance of the acquisition.
However, in 2021, the unaudited net profit of Faxuan online was 4.58 million yuan, a year-on-year decrease of about 88%, and only 11% of the promised net profit. The official account of On-Line Company declared that in order to mobilize the sales work of all the staff, the sales center staff also signed the responsibility for the new year’s business objectives in January 14, 2022.
China Publishing & Media Holdings Co.Ltd(601949) believes that there is great uncertainty in the future business prospect of Faxuan online company. The continued cooperation between the two sides can not maximize the interests, but affect the resource allocation of listed companies, increase governance risks and financial risks, and is not conducive to the capital operation and high-quality development of listed companies.
the parties to the dispute over the payment of liquidated damages will resolve it through litigation
According to the agreement reached by both parties, the previously signed equity acquisition agreement and all related supplementary agreements have been terminated on December 31, 2021, but there are still disputes in terms of compensation.
Democratic Legal Publishing House believes that due to the breach of contract of Faxuan new era and its jointly and severally liable parties, which has caused actual losses, it should compensate for the losses according to the agreed 15% liquidated damages standard, return the corresponding interest and pay its due dividends from 2019 to 2021.
In this regard, Faxuan new era and others do not recognize it. They believe that the inability to complete the performance of gambling is affected by the epidemic, and they should only bear the capital occupation fee of 4%.
Due to the large dispute, all parties agree to solve it through litigation.
In addition, according to the announcement, before Faxuan new era and its joint and several liabilities return all paid equity transfer funds to the democratic and legal publishing house, the democratic and legal publishing house still holds 51% equity of Faxuan online company.
It is worth noting that, therefore, the equity transfer funds previously agreed to be acquired are paid in the next year, and the payment proportions from 2019 to 2022 are 20%, 10%, 10% and 10% respectively. Therefore, the holding subsidiaries of the listed company have not paid all the equity transfer funds. From September 25, 2019 to June 8, 2021, according to the M & a agreement, the Democratic Legal System Publishing House has paid a total equity transfer price of 171 million yuan, and 42.84 million yuan has not been paid.
