Since this year, the “zero tolerance” law enforcement of regulators has been further implemented, and the regulation of violations of listed companies has become more and more strict. Letters of supervision, inquiry and concern have become an effective way for regulators to prompt whether listed companies violate regulations.
However, some listed companies evade relevant questions for various reasons, “delayed reply” is a common trick.
According to the announcement of listed companies on cnchao.com, the reporter of Securities Daily had 1028 announcements on replying to the inquiries of regulatory authorities as of February 18. Among them, there are 214 delayed replies. If estimated according to 29 trading days, the daily average is 7.
What kind of company is procrastination common? What’s the mystery behind this?
ST company delayed reply to the main force
The reporter of Securities Daily found that most of the companies that issued the delayed reply announcement were ST companies, and most of the questions required to reply were related to the company’s performance. According to datayes of Tonglian data, ST companies accounted for about 40% of the listed companies that delayed reply.
In this regard, pan Helin, executive director of the Digital Economy Research Institute of Zhongnan University of economics and law, told the Securities Daily, “most ST companies do not have the value of shell resources, the company’s operation is difficult to make a breakthrough, and there are many internal problems, which may be an important factor leading to the serious delay of Reply of ST company.”
From the data, most of the performance of ST company is not ideal, and even the main business continues to suffer losses.
Take Jinzhou Cihang Group Co.Ltd(000587) as an example, the company’s net profit after deduction in the first three quarters of 2018, 2019, 2020 and 2021 showed losses of RMB 2.881 billion, RMB 6.276 billion, RMB 3.793 billion and RMB 578 million respectively. According to the performance forecast for 2021 released by the company, the company expects a net profit loss of 2.67 billion yuan to 2.77 billion yuan after deducting non-profit in 2021.
In the case of continuous losses in the main business, Jinzhou Cihang Group Co.Ltd(000587) delayed again and again after receiving the attention letter from the Shenzhen Stock Exchange on January 30, and has not made relevant reply so far. According to the letter of concern, the Shenzhen Stock Exchange questioned the data disclosed in Jinzhou Cihang Group Co.Ltd(000587) 2021 annual performance forecast and asked the company to explain whether it has the primary responsibility to sell goods to customers and whether there is a situation where the total amount method replaces the net amount method to recognize revenue. In addition, the company only achieved an operating revenue of 37 million yuan in the first half of 2021, while the company expects to achieve an operating revenue of 130 million yuan to 160 million yuan in 2021. Therefore, the Shenzhen stock exchange requires the company to explain the reason and rationality that the operating revenue is mainly concentrated in the third and fourth quarters in combination with the actual sales quantity and price of various products such as gold and jewelry in each quarter.
Up to now, nearly 20 days have passed since the release time of the above concern letter, but Jinzhou Cihang Group Co.Ltd(000587) has not made relevant reply, and two delayed reply announcements have been issued during this period.
Liu Shengyu, managing partner of Gaohe investment, said in an interview with the reporter of Securities Daily, “The reason why ST company has become the main force of delayed reply has a lot to do with the company’s operation and fundamentals. ST companies need to face short-term operation pressure; there are more or less problems in corporate governance or other operation and management. For example, some ST companies facing delisting are understaffed and can only be represented by the chairman of the company.”
Take Misho Ecology & Landscape Co.Ltd(300495) which was delayed for nearly five months as an example. From January 2021 to now, Misho Ecology & Landscape Co.Ltd(300495) has received 12 inquiry letters and attention letters, but adopted the “squeezing toothpaste” reply method. For example, for the inquiry letter on the company’s semi annual report, the company delayed 18 times before replying successively. In fact, Misho Ecology & Landscape Co.Ltd(300495) is indeed full of problems. The company not only has the problem of inaccurate financial statements for five consecutive years, but also has a large-scale loss of directors and supervisors.
It is understood that since April 23, 2021, seven directors, one supervisor, the chief financial officer, the Secretary of the board of directors, as well as several deputy general managers and securities representatives have resigned successively.
A certified public accountant told the reporter of Securities Daily, “Inquiries involving annual report or semi annual report data generally require listed companies to reply within one week, which is synchronized with the reply of accounting firms. For the questions raised by the regulatory authorities, the company should be ready soon. If the delay in reply is too long, it can basically indicate that the relevant companies do have problems.”
In addition, Wang Zhibin, a lawyer from Shanghai Minglun law firm, said, “When inquiring, the exchange will comprehensively consider the complexity of relevant matters, and then specify the response time limit, which shall be regarded as a reasonable time limit for the company to respond. If the company fails to respond within this reasonable time limit, it means that there is another secret about the relevant matters or the company’s senior management is not diligent in their daily work. In either case, the investor should make a new judgment Cut off the investment value of the stock. “
delayed reply disturbs investment expectations
According to the requirements of the measures for the administration of information disclosure of listed companies, listed companies shall disclose information “truthfully, accurately, completely and timely”. Hu Qimu, chief researcher of Sinosteel Economic Research Institute, told the Securities Daily that generally speaking, the inquiry letter should be replied within 7 days, otherwise it would violate the “timely” provisions.
The reporter further combed the announcement and found that “the company carefully analyzed the problems involved and implemented them one by one, but the reply to relevant problems needs to be further improved” has become a high-frequency sentence in the deferred reply letter. It can be seen that “being further verified, supplemented and improved” has become the main reason for the delayed reply.
In this regard, pan Helin said, “the statement of ‘reply to be improved’ is an excuse in itself. Generally, when the reply letter involves major information of the company, it will affect its stock price, so it is suspected of deliberately delaying the reply. At this time, the regulator needs to issue a supervision letter to protect the rights and interests of investors. If the company has reasonable reasons, it should explain the specific reasons for the delay.”
Hu Qimu told the reporter of Securities Daily, “the problems raised by the regulatory authorities are often highly concerned by the market. The relevant replies of listed companies will inevitably affect market expectations and investor decisions.”
Liu Shengyu told reporters, “the delayed reply of a listed company, especially when it involves key issues, will affect the judgment of investors on the enterprise. Under the registration system, investors rely more on public information to analyze and judge the long-term value and fundamentals of the enterprise. If the delayed reply, it will certainly have an impact on investment expectations.”
strengthen the supervision of delayed reply
How should we deal with the “procrastination” of listed companies?
Xu Feng, a lawyer at Shanghai Jiucheng law firm, told the Securities Daily, “listed companies themselves need to be in awe of supervision, reply to inquiry letters in strict accordance with requirements, and protect investors’ right to know.”
During the interview with the reporter of Securities Daily, many people in the industry said that the regulatory letter, inquiry letter and concern letter were delayed by the listed company, and the key doubtful issues were ignored, which would seriously hurt the investors’ right to know.
“If it is really difficult to reply, you can apply to the exchange for delayed reply, but if you frequently apply for delayed reply, you may be deliberately covering up the problem and creating time for the company to cover up illegal acts. This will have a great impact on investors’ investment decisions and the right to know.” Lawyer Xu Feng said.
For how to deal with the problem of long-term delayed reply of listed companies, Xu Feng believes that “the exchange carries out self-discipline supervision. If it still does not reply after repeated urging, it can be directly handed over to the CSRC for investigation as long as it has the relevant clues of violation, rather than passively waiting for the reply of relevant companies.”
In the view of lawyers, in order to solve the problem of too long delayed reply of listed companies, regulators need to strengthen the crackdown; In the view of the industry, it also needs to rely on the auxiliary supervision of intermediaries.
Jiang Han, a senior researcher at Pangu think tank, told the Securities Daily, “listed companies can’t solve the problems raised in the inquiry letter in a short time, so it’s meaningless to choose to delay. Intermediaries also need to urge listed companies to reply to the inquiry as soon as possible.”
“The delayed reply is the right protection direction concerned by investors at present.” Jiang Han suggested that investors should also strengthen their awareness of safeguarding their rights and take the initiative to collect evidence.
