Liu Xiaogan did not expect that it would be so difficult to exit after investing in a new third board company.
Recently, Liu Xiaogan, the actual controller of Nanchang Zhuosheng Industry Co., Ltd. (hereinafter referred to as Nanchang Zhuosheng industry), reported to the reporter of daily economic news that his company participated in the subscription of shares of Jiatai CNC Technology Co., Ltd. (hereinafter referred to as Jiatai CNC, 838053), a company listed on the new third board, and subscribed 10.35 million shares with 89.9415 million yuan.
At that time, Nanchang Zhuosheng industry signed a supplementary agreement with Su yashuai, the actual controller of Jiatai CNC, which agreed that if Jiatai CNC failed to obtain the administrative license acceptance notice of the application document for initial public offering of shares from the CSRC before December 31, 2018, Nanchang Zhuosheng industry had the right to require Su yashuai to repurchase all shares.
Liu Xiaogan said that since then, Jiatai CNC triggered the repurchase terms, and Nanchang Zhuosheng industry signed the share repurchase agreement with Su yashuai, but Su yashuai refused to repurchase. After filing a lawsuit with Quanzhou intermediate people’s Court of Fujian Province (hereinafter referred to as Quanzhou intermediate people’s court), Quanzhou intermediate people’s court ruled in June 2020 that Su yashuai should repay the equity repurchase amount of 89.9415 million yuan and pay interest to Nanchang Zhuosheng industry.
More than a year later, the judgment has not been executed.
Zhongtai Securities Co.Ltd(600918) sponsor Jiatai CNC
Nanchang Zhuosheng industrial investment in Jiatai CNC, a new third board company, began with a friendship among students.
Liu Xiaogan said that a classmate of his EMBA at Peking University worked for the recommendation agency Zhongtai Securities Co.Ltd(600918) of Jiatai CNC. Under the recommendation of this classmate, Nanchang Zhuosheng industry participated in the subscription of Jiatai CNC shares.
On July 5, 2017, Jiatai CNC disclosed the announcement of stock issuance and subscription of Jiatai CNC Technology Co., Ltd. on the information disclosure platform designated by the National SME share transfer system. The stock issuance price is 8.69 yuan / share, the total number of shares to be issued is no more than 50 million, and the total amount of funds raised is expected to be no more than 434.5 million yuan.
Finally, three investors, including Nanchang Zhuosheng industry, successfully subscribed for the new shares of Jiatai CNC. In addition to Nanchang Zhuosheng industry subscribing 10.35 million shares with 89.9415 million yuan, Sichuan Guodong Construction Co., Ltd. (later renamed Rightway Holdings Co.Ltd(600321) ) subscribing 31.07 million shares with 270 million yuan, and Beijing Shengkang Shunda Investment Management Center (limited partnership) subscribing 300000 shares with 2.607 million yuan.
It is understood that Jiatai CNC issued a total of 41.72 million shares, raising 363 million yuan, which did not reach the upper limit of the total number of shares issued.
Liu Xiaogan said that after signing the share subscription agreement with Jiatai CNC, Nanchang Zhuosheng industry and Su yashuai, the actual controller of Jiatai CNC, signed the supplementary agreement between Su yashuai and Nanchang Zhuosheng Industry Co., Ltd. on the share subscription agreement of Jiatai CNC Technology Co., Ltd. for issuing shares in the National SME share transfer system with Jiatai CNC as the target company.
It is agreed in the agreement that Nanchang Zhuosheng industry will increase the capital of Jiatai CNC with RMB 89.9415 million. If Jiatai CNC fails to obtain the administrative license acceptance notice of the application document for initial public offering of shares from the CSRC before December 31, 2018, Nanchang Zhuosheng industry has the right to require Su yashuai to repurchase all shares, The repurchase price is calculated by the investment amount of Nanchang Zhuosheng industry plus the simple interest of 10% of the previous year, and minus the amount of dividends and compensation if the profit value of the target company over the years is not reached.
performance changes after financing
Jiatai CNC Technology Co., Ltd. is a manufacturing enterprise engaged in the R & D, production, sales and service of automatic and intelligent CNC machine tools. At present, it mainly provides customers with all kinds of high-grade CNC machine tools and overall service solutions based on high-speed and precision CNC machining center machine tools. Founded in July 2011, the company is located in Luojiang District, Quanzhou City, Fujian Province, with a registered capital of 371.328 million yuan and the actual controller is Su yashuai.
Jiatai CNC Technology Co., Ltd. has been listed and publicly transferred on the new third board since July 28, 2016. After listing, the company has maintained a high profit level for two consecutive years. The company’s profits in 2016 and 2017 exceeded 100 million yuan, 104 million and 106 million yuan respectively. However, after the financing was completed in 2017, the performance fell sharply. In 2018, the net profit attributable to the parent company was 14 million yuan, a year-on-year decrease of 86.84%. In 2019 and 2020, the loss exceeded 200 million yuan for two consecutive years.
Jiatai CNC disclosed in its 2020 annual report that due to the change of 3C industry manufacturing process, the application of new materials, Sino US friction and other reasons, 5g large-scale application was later than expected, resulting in the slowdown of the overall order of the industry. In the early stage, some customers excessively expanded their production lines in order to receive orders from large manufacturers, so they were unable to deal with industrial restructuring and reshuffle in time, resulting in difficulties in capital turnover and unable to pay according to the time agreed in the contract. Therefore, some customers’ accounts receivable could not be recovered in time. According to the requirements of relevant accounting standards and the principle of prudence, the company made a large amount of bad debts for accounts receivable in 2020, As a result, the company is operating at a loss at this stage.
In addition, in terms of revenue, from 2014 to 2016 before listing, the company’s operating revenue increased from 62.4 million yuan to 765 million yuan. However, since 2017, the revenue has decreased significantly, decreased to 660 million yuan in 2017, decreased to 299 million yuan and 176 million yuan in 2018 and 2019 respectively, and rebounded to 318 million yuan in 2020.
investment exit becomes a difficult problem
Compared with the main board market, the trading of the new third board is not active, and many investors are most worried about how to exit. For example, even if Liu Xiaogan signed a repurchase agreement with Jiatai CNC, the exit road is quite difficult.
Jiatai CNC failed to obtain the administrative license acceptance notice of the application document for initial public offering of shares from the CSRC before December 31, 2018, triggering the conditions for share repurchase in the subscription agreement and supplementary agreement for directional issuance of shares.
On June 14, 2019, Nanchang Zhuosheng industry signed the equity repurchase contract with Su yashuai. The contract agreed that Su yashuai should pay Nanchang Zhuosheng industry equity repurchase amount of 102 million yuan. From January 1, 2019 to the date when all the funds are paid off, Su yashuai will pay Nanchang Zhuosheng industry interest on overdue payment and liquidated damages for overdue payment. The share repurchase price shall be paid in three phases and shall be completed before March 31, 2020.
Liu Xiaogan believes that after repeated demands by Nanchang Zhuosheng industry, Su yashuai has not paid any money, and his failure to pay the equity repurchase payment has constituted a breach of contract. To this end, Nanchang Zhuosheng industry filed a lawsuit with Quanzhou intermediate people’s court and asked Su yashuai to pay the equity repurchase payment.
After trial, Quanzhou intermediate people’s court made a judgment of first instance on June 29, 2020, and Su yashuai shall repay the repurchase amount of 89.9415 million yuan of Nanchang Zhuosheng Industrial Co., Ltd. within the effective date of the judgment, and pay interest and liquidated damages for overdue payment.
However, Liu Xiaogan told reporters that Su yashuai had not executed the effective judgment and had been included in the list of dishonest Executees. The reporter inquired about China executive information disclosure network, and Su yashuai was indeed among them.
On January 29, 2022, the reporter of “daily economic news” called Su yashuai. He told the reporter that he was going through legal procedures at present.
