The performance growth caused by a covid-19 epidemic has led to continuous disputes over Shanghai Kehua Bio-Engineering Co.Ltd(002022) (002022) acquisition of the equity of Xi’an Tianlong Technology Co., Ltd. and Suzhou Tianlong Biotechnology Co., Ltd. (hereinafter collectively referred to as “Tianlong company”). On December 27, Shanghai Kehua Bio-Engineering Co.Ltd(002022) disclosed that Tianlong company said it was unable to cooperate with the company’s pre-trial accounting statements and subsequent audit. In July this year, Peng niancai, Li Ming and other counterparties applied for arbitration and asked Shanghai Kehua Bio-Engineering Co.Ltd(002022) to pay the remaining investment price totaling 10.504 billion yuan. Due to the high amount involved, the arbitration case has attracted wide attention in the market. On December 27, Shanghai Kehua Bio-Engineering Co.Ltd(002022) said that the arbitration case has not been heard yet.
Tianlong company does not cooperate with the audit
On December 27, Shanghai Kehua Bio-Engineering Co.Ltd(002022) suddenly exploded, saying that Tianlong company, the holding subsidiary of the company, made it clear that it was unable to cooperate with the company’s pre-trial accounting statements and subsequent audit.
According to the announcement, Li Ming, the director and general manager of Tianlong company, sent the audit response letter to the chairman, President and chief financial officer of Shanghai Kehua Bio-Engineering Co.Ltd(002022) by email on December 25. Tianlong company cooperated with Peng niancai, Li Ming, Miao Baogang The arbitration case between Xi’an Yujing Tongyi enterprise management partnership (limited partnership) resulted in the freezing of 62% equity of Tianlong company held by Shanghai Kehua Bio-Engineering Co.Ltd(002022) . Xi’an Weiyang District People’s court has ruled to prohibit Shanghai Kehua Bio-Engineering Co.Ltd(002022) from exercising all shareholder rights of 62% equity of Xi’an Tianlong, and there is a risk of leakage of business secrets in opening financial data to Shanghai Kehua Bio-Engineering Co.Ltd(002022) , It clearly indicates that it is unable to cooperate with Shanghai Kehua Bio-Engineering Co.Ltd(002022) pre-trial accounting statements and subsequent audit.
In this regard, Shanghai Kehua Bio-Engineering Co.Ltd(002022) said that the so-called “reasons” put forward by Tianlong company in the audit response letter are completely lack of factual and legal basis. The company expresses its strongest indignation and condemnation against Li Ming and some other directors and senior managers of Tianlong company for ignoring the rules of the securities market and the requirements of the company’s standardized operation and ignoring the interests of listed companies and their minority shareholders.
The announcement shows that the board of directors of Tianlong company deliberated and adopted the proposal on requiring cooperation with the annual audit of listed companies on December 27. Shanghai Kehua Bio-Engineering Co.Ltd(002022) the directors, senior managers, chief financial officer, financial department and relevant parties of Tianlong company will be required to fully implement the resolutions of the board of directors.
It is understood that on June 8, 2018, Shanghai Kehua Bio-Engineering Co.Ltd(002022) signed the investment agreement with Peng niancai, Li Ming, Miao Baogang and Xi’an Yujing Tongyi enterprise management partnership (limited partnership), which agreed that Shanghai Kehua Bio-Engineering Co.Ltd(002022) would increase capital to Tianlong company in cash and acquire 62% equity of Tianlong company. Tianlong company became a Shanghai Kehua Bio-Engineering Co.Ltd(002022) holding subsidiary.
For company related issues, the reporter of Beijing Business Daily called the Shanghai Kehua Bio-Engineering Co.Ltd(002022) Secretary Office for an interview, but no one answered the other phone.
involving 10.5 billion arbitration cases
In fact, some directors and executives of Tianlong company have long had disputes with Shanghai Kehua Bio-Engineering Co.Ltd(002022) and also involved an arbitration case involving an amount of 10.5 billion yuan.
It is understood that Shanghai Kehua Bio-Engineering Co.Ltd(002022) announced on July 14 that the company received the notice on arbitration of dispute arbitration case and its attachment arbitration application from Shanghai International Economic and Trade Arbitration Commission on July 13. The applicants Peng niancai, Li Ming, Miao Baogang and Xi’an Yujing Tongyi enterprise management partnership (limited partnership) required Shanghai Kehua Bio-Engineering Co.Ltd(002022) to pay a total of 10.504 billion yuan of the remaining investment price.
The matter originated from the investment agreement signed by Shanghai Kehua Bio-Engineering Co.Ltd(002022) and Li Ming and other counterparties. According to the investment agreement, the acquisition of all equity of Tianlong company is completed in two stages. The first stage is that Shanghai Kehua Bio-Engineering Co.Ltd(002022) obtains 62% equity of Tianlong company at a consideration of 554 million yuan; The second stage is Shanghai Kehua Bio-Engineering Co.Ltd(002022) to complete the acquisition of the remaining 38% equity in 2021 at the equity value calculated according to the net profit of Tianlong company in 2020. With regard to the transfer of 38% equity of Tianlong company in the second stage, the investment agreement stipulates that the overall valuation of Tianlong company shall be the higher of the following, RMB 900 million or the audited net profit of Tianlong company in 2020 multiplied by 25 times.
However, unexpectedly, due to the covid-19 epidemic, the performance of Tianlong company increased. In 2020, the net profit after deducting non-profit was 1.106 billion yuan, Shanghai Kehua Bio-Engineering Co.Ltd(002022) it was difficult to pay the high remaining investment price, which triggered a series of subsequent disputes.
Lou Xiaoyun, a lawyer of Zhejiang Xinzhuan law firm, said in an interview with the Beijing Business Daily that it is reasonable for Shanghai Kehua Bio-Engineering Co.Ltd(002022) to defend on the ground of change of circumstances, but how the court will decide is still unknown.
In response to the above arbitration matters, on November 27, Shanghai Kehua Bio-Engineering Co.Ltd(002022) said that as of the disclosure date of this announcement, Shanghai International Economic and Trade Arbitration Commission had twice arranged a hearing to hear the arbitration case, which had to be cancelled due to the reasons of Li Ming and other arbitration applicants, so that the arbitration case has not been heard so far.
Shanghai Kehua Bio-Engineering Co.Ltd(002022) believes that, on the one hand, the arbitration applicant took advantage of its management of Tianlong company to treat negatively, postpone or even refuse to cooperate with the audit institution entrusted by the company in the normal annual audit of Tianlong company, on the other hand, it delayed the trial procedure of this arbitration case on the grounds that the financial operation data of Tianlong company is an important fact of this arbitration case, which has yet to be formed, Its essential purpose is to make this arbitration case in a “protracted” state and exert pressure on the company in a disguised form.
(Beijing business daily)
