On March 1, Zhewen Pictures Group Co.Ltd(601599) announced that the company recently received the notice of filing a case issued by Dongyang Public Security Bureau of Jinhua City, Zhejiang Province. Wu Yi, the legal representative of the subsidiary Zhejiang Tianyi film and Television Co., Ltd. (hereinafter referred to as “Tianyi film and television”) was suspected of taking advantage of his position and was criminally filed for investigation by the public security organ. On February 28, 2022, Wu Yi was arrested with the approval of Dongyang Municipal People’s Procuratorate.
The announcement shows that Wu Yi has been taken compulsory measures by the public security organ and has been officially arrested Zhewen Pictures Group Co.Ltd(601599) therefore, it is considered that the supplementary agreement has actually been unable to be performed, and it is finally decided to cancel the supplementary agreement to the equity transfer agreement signed with Xinyu Shangshan Ruoshui and Wu Yi.
It is understood that on November 6, 2017, Zhewen Pictures Group Co.Ltd(601599) signed an equity transfer agreement with Xinyu Shangshan Ruoshui and Wu Yi, and transferred 45% equity of Tianyi film and television, with a shareholding ratio of 96%. At that time, Xinyu shangshanruoshui and Wu Yi promised that the net profit of Tianyi film and television would not be less than 100 million yuan, 120 million yuan and 150 million yuan from 2017 to 2019. However, since June 2018, Tianyi film and television has experienced a long “cold winter in the industry” and failed to fulfill its performance commitment from 2017 to 2019. In order to revitalize the resources and assets of Tianyi film and television, on November 2, 2020, Zhewen Pictures Group Co.Ltd(601599) signed the supplementary agreement to the equity transfer agreement with Xinyu Shangshan Ruoshui and Wu Yi, agreeing to reset 20212025 as the profit compensation period Zhewen Pictures Group Co.Ltd(601599) said in the announcement that after the termination of the agreement, the company will recover the net profit compensation and loss of performance gambling from Xinyu shangshanruoshui and Wu Yi through litigation, totaling 264 million yuan.
It is worth noting that Zhewen Pictures Group Co.Ltd(601599) has previously accrued losses for this risk event. From January to December 2020, Zhewen Pictures Group Co.Ltd(601599) made a total of 534 million yuan of credit impairment loss and asset impairment loss for Tianyi film and television. In 2021, Zhewen Pictures Group Co.Ltd(601599) film and television sector made impairment provision again Zhewen Pictures Group Co.Ltd(601599) relevant person in charge said that after the loss was withdrawn this time, the potential risks of the company were basically eliminated, which will lay the foundation for the subsequent steady operation and sustained growth of performance. The announcement also said that at present, Zhewen Pictures Group Co.Ltd(601599) has completely taken over the finance and daily operation of Tianyi film and television, and the TV dramas, films, online dramas and other projects planned by Tianyi film and television are basically continuously promoted according to the plan.
