On December 22, City Development Environment Co.Ltd(000885) (hereinafter referred to as ” City Development Environment Co.Ltd(000885) “) announced that Chengfa water affairs Co., Ltd., a wholly-owned subsidiary of the company, issued the public bidding announcement for equipment supply and other services of catering pretreatment and gutter oil treatment system of Chengfa water affairs Co., Ltd. through Zhongyuan bidding and procurement network on November 19, 2021, Open bidding for equipment supply and other services of Chengfa water catering waste pretreatment system. After performing the corresponding qualification examination, review, publicity and other procedures, it is determined that the bid winner is Zhejiang tus Ecological Technology Co., Ltd. (hereinafter referred to as “Zhejiang ecology”), and the bid winning amount is 10.7158 million yuan. As Huang Xinmin, the current general manager of Zhejiang ecology, once served as an executive of the company within 12 months, this transaction constitutes a connected transaction.
Tianyancha information shows that Zhejiang ecosystem Tus Environmental Science And Technology Development Co.Ltd(000826) (hereinafter referred to as ” Tus Environmental Science And Technology Development Co.Ltd(000826) “) is a holding subsidiary. At present, City Development Environment Co.Ltd(000885) is exchanging shares to absorb Tus Environmental Science And Technology Development Co.Ltd(000826) . Since this year, it has issued a number of relevant suggestive announcements. At present, the absorption and merger process is being promoted.
In view of the above, some investors on some interactive platforms are worried about whether this connected transaction will have an impact on City Development Environment Co.Ltd(000885) absorption and merger Tus Environmental Science And Technology Development Co.Ltd(000826) .
In this regard, haoyunduo law firm is responsible for the company’s property rights Wang Kuixing, a lawyer in charge of M & A, told Securities Daily: “From the definition, the term ‘connected transaction’ itself is neutral. At present, China’s relevant laws do not prohibit enterprise entities from conducting connected transactions. The law only prohibits unfair or illegal connected transactions, and whether the enterprise connected transactions are legal or not depends on whether the transactions are fully disclosed and whether they comply with business practices.”
He Miao, chief enterprise management consultant of Zhengzhou siyuxing Enterprise Management Consulting Co., Ltd., also pointed out: “The starting point of the legal system of connected transactions is to prevent the use of connected relationships for benefit transmission and damage the interests of other companies, shareholders or creditors. The party with connected relationships has more information in relevant transactions. In order to avoid damage to other related parties caused by information asymmetry, the law requires related parties to fully disclose the situation of connected relationships 。 Related parties can only have legal compliance after disclosure. Based on this, at least at the level of laws and regulations, City Development Environment Co.Ltd(000885) or affiliated transactions between subsidiaries and Tus Environmental Science And Technology Development Co.Ltd(000826) or its subsidiaries will not hinder their absorption and merger. ”
It is worth mentioning that on December 23, investors asked City Development Environment Co.Ltd(000885) on the interactive platform about the amount of financial support for Tus Environmental Science And Technology Development Co.Ltd(000826) , City Development Environment Co.Ltd(000885) said that at present, the cumulative amount of financial support for Tus Environmental Science And Technology Development Co.Ltd(000826) has been 971 million yuan.
According to the third quarterly report of 2021, as of the end of the reporting period, Tus Environmental Science And Technology Development Co.Ltd(000826) current liabilities were 18.46 billion yuan, and the total liabilities were 23.37 billion yuan. That is to say, at present, City Development Environment Co.Ltd(000885) subsidy accounts for 5.26% of Tus Environmental Science And Technology Development Co.Ltd(000826) current liabilities and 4.15% of total liabilities at the end of the third quarter of this year.
Zhao Hui, stock analyst of Tibet Jinxiu commodity exchange, told reporters: “during the period of absorption and merger, the absorption subject provides financial assistance to the absorbed subject. The main purpose is to meet the actual needs of the absorbed subject in the transition period of absorption and merger, maintain the stability of its production and operation, remove obstacles for absorption and merger and promote the smooth progress of absorption and merger between the two sides.”
(Securities Daily)
