Many years ago, some important shareholders of A-share listed companies (including controlling shareholders, executives and other shareholders holding more than 5%) pledged their shares in a high proportion, but now it has evolved into a tragedy. According to incomplete statistics by the reporter of Securities Daily, since this year, nearly 40 companies in Shanghai and Shenzhen have prompted important shareholders to “passively reduce their holdings”. The main reason is that the previously Pledged Shares triggered passive liquidation, litigation and other matters.
“The equity pledge of many companies occurred from 2015 to 2016, which is worthy of the high share price of the company, which also buried hidden dangers.” An unnamed investor disclosed to the reporter of Securities Daily.
In this regard, some listed companies admitted that the “passive reduction” may lead to the instability of control, and some investors are worried about whether the information disclosure can be complete and objective in the passive reduction.
pledged equity causes a series of sequelae
According to the public information of Listed Companies in Shanghai and Shenzhen, the reason why important shareholders of listed companies suffered “passive reduction” is mostly related to the previous equity pledge.
For example, Ningbo Sunlight Electrical Appliance Co.Ltd(002473) announced that the company’s shareholder Ningbo Golden Sunshine electric heating technology Co., Ltd. (hereinafter referred to as “Golden Sunshine”) had defaulted in the stock pledge business, and the event of default can be traced back to 2017. Jinyangguang and First Capital Securities Co.Ltd(002797) completed the pledge repurchase of shenglaida shares with an initial transaction amount of 155 million yuan in October 2016. The transaction was postponed for many times and expired on August 30, 2019. In April 2017, the performance guarantee ratio of the above transactions fell below the closing line, First Capital Securities Co.Ltd(002797) according to the agreement, jinyangguang was required to supplement the pledge and collateral, or repurchase in advance. However, Jin Yangguang failed to complete the supplementary pledge, supplementary guarantee or early repurchase, which constituted a breach of contract and foreshadowed the “passive reduction” in the future.
In fact, the case of Ningbo Sunlight Electrical Appliance Co.Ltd(002473) is not an “isolated case”. Huaxun Fangzhou Co.Ltd(000687) also announced a few days ago that the business dispute lawsuit between Wu Guangsheng, the actual controller of the company, and Shenwan Hongyuan Group Co.Ltd(000166) margin trading is still in the enforcement stage. Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) announced that the controlling shareholder of the company, Shantou Chenghai District Humei Battery Co., Ltd., filed a lawsuit with the second intermediate people’s Court of Beijing because 16.5 million Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) shares pledged to Dongxing Securities Corporation Limited(601198) were involved in breach of contract. Recently, Dongxing Securities Corporation Limited(601198) received the notice of assistance in execution from the second intermediate people’s Court of Beijing, requesting Dongxing Securities Corporation Limited(601198) to assist it in selling the Pledged Shares
Bluedon Information Security Technologies Co.Ltd(300297) also announced that Ke Zongqing, the controlling shareholder and actual controller, was ordered by the court to dispose of the 600000 shares pledged to mingrun investment to pay off the relevant debts due to his failure to timely fulfill the obligation to repay the loan and corresponding interest and other expenses of Shenzhen mingrun Investment Co., Ltd. (hereinafter referred to as “mingrun investment”). Ke Zongqing had a passive reduction due to the above ruling, It does not rule out the risk that the company’s shares held by them will continue to be forcibly closed during the communication process.
The above investors told the reporter of Securities Daily that the price of equity pledge is usually 30% to 40% off. If the shareholders of Pledged Shares encounter the continuous decline of the share price of listed companies, they will be very passive. Once the price falls to the closing line, if the pledge cannot be supplemented in time, the closing will be triggered. However, in the actual implementation process, we often encounter the embarrassing situation that the short-term stock price falls too much and cannot be sold after falling below the closing line. “You can’t sell it. It’s a good thing to close your position smoothly. Once you can’t close your position, you can only make a legal auction. The mortgaged funds will lose a lot. Some can get their capital back through legal auction, and some may not even get their capital back.”
passive reduction information disclosure cannot be absent
For the possible risks of pledged equity, some listed companies said that if the relevant shareholders can not take effective measures to resolve them, it may affect the stability of their control.
In addition, in the process of passive reduction, how to protect the right to know of small and medium-sized investors is also the focus of much attention, which requires that the information disclosure of listed companies cannot be absent.
Wang Zhibin, a lawyer from Shanghai Minglun law firm, told the reporter of Securities Daily that according to several provisions on reducing shares held by shareholders and directors, supervisors and senior managers of listed companies, if major shareholders and directors, supervisors and senior managers of listed companies plan to reduce their shares through centralized bidding trading through the exchange, they should report to the stock exchange 15 trading days before the first sale of shares and disclose the reduction plan in advance, It shall be filed by the stock exchange. The contents of the reduction plan of major shareholders, directors, supervisors and senior executives of listed companies shall include but not limited to: the number of shares to be reduced, the source, the reduction time interval, the reduction method, the price interval and the reasons for the reduction. The time interval for reduction shall comply with the provisions of the stock exchange. Within the pre disclosed reduction time range, major shareholders, directors, supervisors and senior managers shall disclose the progress of reduction in accordance with the provisions of the stock exchange; After the implementation of the share reduction plan, the major shareholders, directors, supervisors and senior managers shall report to the stock exchange within two trading days and make an announcement; Within the pre disclosed reduction time interval, if the reduction is not implemented or the reduction plan is not completed, it shall report to the stock exchange within two trading days after the expiration of the reduction time interval and make an announcement.
“The above provisions are also applicable to the passive reduction. However, if the reduced shares are purchased from the secondary market, the listed company and relevant shareholders do not need to make pre disclosure.” Wang Zhibin explained.
