Shanghai Kehua Bio-Engineering Co.Ltd(002022) (002022. SZ) the audit of the 2021 annual report has encountered significant obstacles. According to the disclosure of the listed company on December 27, in the face of the company’s request to cooperate with the annual audit accountant for relevant audit, the company’s holding subsidiaries Xi’an Tianlong Technology Co., Ltd. and Suzhou Tianlong Biotechnology Co., Ltd. (hereinafter referred to as Tianlong Technology) said they could not cooperate. In this regard, the listed company said: “the strongest indignation and condemnation.”
In terms of performance volume, Tianlong technology is the core subsidiary of Shanghai Kehua Bio-Engineering Co.Ltd(002022) . Behind the Tianlong technology’s attack, it stems from the dispute between some of its shareholders and Shanghai Kehua Bio-Engineering Co.Ltd(002022) over the company’s equity M & A. Previously, the minority shareholders of Tianlong technology filed an arbitration and claimed 10 billion from the listed company.
The subsidiary refused to cooperate with the annual review
Shanghai Kehua Bio-Engineering Co.Ltd(002022) announcement: according to the audit requirements of the annual audit institution of the company, Lixin Certified Public Accountants (hereinafter referred to as the audit communication letter), the company sent the letter of cooperation in audit to Tianlong technology and its directors, supervisors and chief financial officer on December 16 and 17, respectively. The company mentioned in the letter that Lixin intends to carry out remote audit on Tianlong technology first and then carry out on-site audit. Therefore, we hope that all shareholders, directors and senior managers of Tianlong technology will actively perform their respective responsibilities and obligations to ensure that Tianlong technology provides financial data and relevant information on time, And cooperate with Lixin to complete the audit of Tianlong technology’s financial report in 2021 on time.
In response to the above request, Li Ming, director and general manager of Tianlong technology, replied to the chairman, President and chief financial officer of Shanghai Kehua Bio-Engineering Co.Ltd(002022) by e-mail on December 25, making it clear that he could not cooperate with Shanghai Kehua Bio-Engineering Co.Ltd(002022) pre-trial accounting statements and subsequent audit work.
Qixinbao shows that at present, the equity ratio of Xi’an Tianlong and Suzhou Tianlong held by Shanghai Kehua Bio-Engineering Co.Ltd(002022) is 62%, and they are the controlling shareholders of the company. Why was the controlling shareholder “made difficult” by the executives of the subsidiary?
Li Ming seems to have his confidence. In his reply, he said that Shanghai Kehua Bio-Engineering Co.Ltd(002022) has frozen 62% equity of Tianlong technology, and Xi’an Weiyang District People’s Court (hereinafter referred to as Weiyang District Court) has ruled to prohibit Shanghai Kehua Bio-Engineering Co.Ltd(002022) from exercising all shareholders’ rights of 62% equity of Xi’an Tianlong; Li Ming also believes that there is a risk of disclosure of trade secrets when opening financial data to Shanghai Kehua Bio-Engineering Co.Ltd(002022) .
As for Li Ming’s reply, Shanghai Kehua Bio-Engineering Co.Ltd(002022) refuted it in the announcement. Listed companies said that the so-called “reasons” put forward by Tianlong technology are completely lack of factual and legal basis; At the same time, the listed company also said that it expressed its strongest indignation and condemnation for the behavior of some directors and senior executives of Tianlong technology, such as Li Ming, who ignored the rules of the securities market and the requirements of the company’s standardized operation and ignored the interests of the listed company and its minority shareholders. In the view of listed companies, Tianlong technology, as its holding subsidiary, should be audited by the audit institution entrusted by the company.
ten billion arbitration case behind the dispute
In fact, behind this audit dispute is the continuation of the dispute between Shanghai Kehua Bio-Engineering Co.Ltd(002022) and minority shareholders of Tianlong technology.
In retrospect, Shanghai Kehua Bio-Engineering Co.Ltd(002022) spent 554 million yuan to acquire 62% equity of Xi’an Tianlong and Suzhou Tianlong in 2018. The counterparties are Peng niancai, Li Ming, Miao Baogang and Xi’an Yujing Tongyi enterprise management partnership (limited partnership) (hereinafter referred to as Xi’an Yujing). According to the announcement, Tianlong technology is in a leading position among Chinese manufacturers in terms of nucleic acid extraction instruments, reagents and PCR instruments.
After entering the listed company system, the performance of Tianlong technology has increased greatly. In 2019, Tianlong technology realized a net profit of nearly 90 million yuan. In 2020, the performance of Tianlong technology further broke out, and the net profit deducted in that year was as high as 1.106 billion yuan.
For Shanghai Kehua Bio-Engineering Co.Ltd(002022) , the outbreak of Tianlong technology’s performance was good, but the bad thing was: the listed company had agreed with Peng niancai and Li Ming that Peng niancai and Li Ming had the right to require the listed company to transfer all the equity of Tianlong technology held by them in 2021; At that time, the overall valuation of Tianlong technology will be RMB 900 million, and the non net profit of Tianlong technology in 2020 will be deducted × 25 times, whichever is higher.
According to the deduction of 25 times of non net profit of Tianlong technology in 2020, its 100% equity valuation reached RMB 27.65 billion. If this valuation is used to acquire the remaining 38% equity of Tianlong technology, Shanghai Kehua Bio-Engineering Co.Ltd(002022) it will cost 10.504 billion yuan. In the opinion of the listed company, the core products of Tianlong technology belong to the anti epidemic necessities for covid-19 nucleic acid detection, and the performance outbreak is unpredictable. It is unfair for the listed company to continue to perform the “further investment” clause under the investment agreement.
A “10 billion arbitration” came to the surface.
In mid July this year, Shanghai Kehua Bio-Engineering Co.Ltd(002022) suddenly announced that Peng niancai, Li Ming, Miao Baogang and Xi’an Yujing applied to Shanghai International Economic and Trade Arbitration Commission for arbitration on the disputes caused by the investment agreement signed with the company and were accepted. Peng niancai and Li Ming requested the Arbitration Commission to award the listed company to pay the remaining investment price of 10.504 billion yuan.
At the end of July, Weiyang District Court made a relevant ruling to freeze Shanghai Kehua Bio-Engineering Co.Ltd(002022) corresponding deposits and 62% equity of Xi’an Tianlong and Suzhou Tianlong held by the company. In mid August, Weiyang District Court ruled that before the arbitration award of Shanghai International Economic and Trade Arbitration Commission came into force, Shanghai Kehua Bio-Engineering Co.Ltd(002022) it was prohibited to exercise the shareholder rights of Tianlong technology. The listed company immediately said that it had submitted the application for preservation reconsideration. On August 30, Shanghai Kehua Bio-Engineering Co.Ltd(002022) announced that it had filed an arbitration counterclaim with the Shanghai International Economic and Trade Arbitration Commission for the above arbitration case and was accepted. The listed company requests a ruling to remove the “further investment” clause. In October, the reconsideration request of Shanghai Kehua Bio-Engineering Co.Ltd(002022) was rejected by the Weiyang District Court.
In the announcement on the evening of the 27th, Shanghai Kehua Bio-Engineering Co.Ltd(002022) revealed that the Shanghai International Economic and Trade Arbitration Commission had twice arranged for the hearing of the above arbitration cases, which had to be cancelled due to the reasons of the arbitration applicant, so that the arbitration case has not been heard so far. “Its essential purpose is to make this arbitration case in a state of ‘long delay’ and exert pressure on the company in a disguised form.” Listed companies said.
(Daily Economic News)
