On the first day of the year of the tiger, due to the illegal guarantee of the holding subsidiary, Super Telecom Co.Ltd(603322) was suddenly “hooded”. Subsequently, its securities abbreviation was changed to “St chaoxun”, causing an uproar in the market.
Shandong Xinchao Energy Corporation Limited(600777) also reported that it was involved in illegal guarantee on February 8. It could not solve the problem or was “hooded” within one month. Zoje Resources Investment Co.Ltd(002021) , Dea General Aviation Holding Co.Ltd(002260) two companies are also involved, and have recently issued delisting risk tips.
Illegal guarantee is related to the vital interests of investors, which is destined to become the focus of the market and attract extensive discussion in the industry.
for the first time since last year,
more than 40% of the disaster caused illegal guarantee
In recent years, illegal guarantee has become one of the important “culprits” leading to the company’s “hat”.
According to the comprehensive data and relevant announcements of the reporter of Securities Daily, since 2021, as of February 16, 2022, 10 of the 24 ST companies that have been “warned of other risks” for the first time have been “hooded” in whole or in part due to illegal guarantees, accounting for 42%. In terms of types, listed companies mainly provide illegal guarantees for controlling shareholders and related parties, and there is also the phenomenon of illegal guarantees with subsidiaries as the main body.
Gao Peijie, a lawyer at Beijing Jingshi law firm, said that the reason why illegal guarantees often occur in controlling shareholders and related parties is mainly due to two reasons: on the one hand, the controlling shareholders or actual controllers of listed companies have the appearance of rights, which makes creditors have trust interests in the authenticity of guarantees; On the other hand, the controlling shareholders or actual controllers of listed companies are mostly the legal representatives or members of the board of directors of the company, which is convenient for misappropriating the company’s seal and signing the guarantee agreement.
“In recent years, in many cases, illegal guarantee has gradually developed into a means for major shareholders and related parties to empty out listed companies. Driven by vested interests, listed companies indirectly occupy the funds of listed companies through listed company guarantee.” Yan Kaiwen, chief strategic analyst of Huaxin securities, told the reporter of Securities Daily.
Among the above 10 ST companies, when stating the reasons for the occupation of funds and illegal guarantee by the controlling shareholders and related parties, some companies focused on the bad external situation and tried their best to describe that the controlling shareholders were forced to take risks due to business obstacles and financing difficulties, implying “extenuating”.
For example, some companies said that in 2019, due to the increasing downward pressure of the global economy and the continuous strengthening of China’s deleveraging policy, the company’s controlling shareholders and their related parties had a liquidity crisis, so that non operating funds of the company were used to repay its financing loans, interest, working capital turnover, etc.
In addition, when replying to the regulatory work letter, the company said frankly that in recent years, under the financial market environment of “deleveraging and deleveraging”, the controlling shareholders have encountered unprecedented financing problems, the scale of bank loans has been compressed, the stock pledge rate is too high, the repayment pressure has increased, and it is difficult to transfer funds in a short time. In order to avoid systemic risks affecting listed companies, Forced by helplessness, there should be acute short-term illegal occupation.
However, industry experts said that the argument based on financing difficulties was obviously untenable.
“Operational difficulties cannot be an excuse for the perpetrator to break the law. Since the external guarantee of listed companies is likely to cause significant losses to the company and damage the interests of shareholders, comprehensive and detailed provisions have been made in both laws and regulations and listing rules.” Fan Jian, an associate professor at the Law School of Shanghai University of Finance and economics, told the Securities Daily.
“black box” operation causes great damage
experts suggest maintaining the high-pressure supervision situation
Compared with financial fraud, fund occupation and other violations, illegal guarantee is more hidden. At the same time, it often hollows out listed companies in the form of “drawer agreement” instead of conventional decision-making procedures.
“Illegal guarantee occurs frequently, and the core reason lies in its high concealment.” Chen Li, chief economist of Chuancai securities and director of the Research Institute, told the reporter of Securities Daily that the distinctive feature of this behavior is that it is deliberately committed knowing the violation. After “insiders” exert influence, it is implemented by bypassing the company’s normal decision-making procedures. The information disclosure departments of listed companies mostly refuse to disclose on the grounds of ignorance, which makes the violation guarantee very hidden. In addition, the illegal guarantee for commercial bank loans is now turning to non bank institutions such as microfinance companies, and the guarantee subject is also sinking from listed companies to their holding subsidiaries, which makes the concealment of illegal guarantee more prominent.
Some market participants said that when the highly hidden illegal guarantee was uncovered, it had a great impact on listed companies, which was reflected in the decline of share prices in the secondary market. From the past situation, as long as the illegal guarantee is taken, even if the guarantee liability is lifted in time, the funds will choose to “vote with their feet”. Three of the above-mentioned 10 ST companies said that the illegal guarantee problem had been “solved” when they were implemented the “other risk warning”, but they still could not escape the “Curse” of the daily limit of share price.
The main reason is that illegal guarantee does great harm to all parties in the market. Chen Li said that in the illegal guarantee, if the debtor cannot repay in time, the listed company as the guarantor may have to perform the guarantee responsibility, and its main account will often be sealed up or frozen; In the joint and several liability guarantee, the creditor can skip the debtor and directly require the listed company to perform its obligations. At this point, the illegal guarantee information was forced to be disclosed, but the damage to the rights and interests of listed companies and minority shareholders has been formed. Even if listed companies try their best to recover, the result is difficult to predict.
Kevin Yan said that the illegal guarantee behavior of listed companies will bring risks to the company’s daily production and operation. At the same time, it will damage the corporate governance structure and the credibility of information disclosure in the capital market. In addition, the stock price fluctuation in the secondary market caused by illegal guarantee also seriously damages the interests of small and medium-sized investors.
For how to prevent the occurrence of illegal guarantee and avoid “black box operation”, Chen Li said that the regulatory authorities need to maintain a high pressure on illegal guarantee, urge listed companies to strengthen the disclosure of guarantee information, and fully reveal the reasons for external guarantee and the investment direction of guaranteed debt funds. In the process of supervision, we should pay close attention to the “clues” of relevant violations, find problems in time and strengthen investigation.
Fan Jian believes that listed companies should strictly abide by laws and regulations, establish an effective internal control mechanism, ensure the legitimacy and compliance of guarantees, strengthen the management of holding subsidiaries, and recover the losses caused by illegal guarantees from the responsible entities.
