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Shenzhen Stock Exchange on Beijing Transtrue Technology Inc(002771)
Special reply to the letter of concern
Kangda FA Yi Zi [2021] No. 2260
To: Beijing Transtrue Technology Inc(002771)
Beijing Kangda law firm is subject to Beijing Transtrue Technology Inc(002771) (hereinafter referred to as ” Beijing Transtrue Technology Inc(002771) ”
Or “the company”) to provide legal services to the company as the company’s perennial legal counsel. According to Shenzhen certificate
Letter of concern about Beijing Transtrue Technology Inc(002771) issued by the stock exchange on August 18, 2021 (public
According to the requirements of the Department’s attention letter [2021] No. 300), the lawyers of the firm checked relevant issues and issued this special report
Reply.
With regard to the issuance of this special reply, our lawyer hereby makes the following statement:
According to the basic facts that have occurred or existed before the issuance date of this special reply, our lawyers
The bank’s effective relevant laws, regulations and normative documents are based on the verification of relevant materials and the opinions of our lawyers
Necessary investigation and verification, and express legal opinions based on the understanding of relevant facts and the law.
The issuance of this special reply is based on the following premise: Beijing Transtrue Technology Inc(002771) all documents and materials provided to our lawyers
And the relevant oral statements are true, accurate, complete and effective, without any falsehood or misleading
Information; The originals of the documents provided and the signatures and seals on them are authentic; Among them, the documents are vice
In case of this or a copy, it shall be ensured that it is consistent with the original or the original; The parties signing the relevant documents have obtained the necessary authorization or performed the necessary approval procedures for the signing of such documents; All facts and documents sufficient to affect the special reply have been disclosed to the exchange without any concealment or major omission. Our lawyers rely on the supporting documents issued by relevant government departments or other units to express their opinions on the facts that are important to the special reply and cannot be supported by independent evidence.
Our lawyers have strictly performed their statutory duties and followed the principles of diligence and good faith. As of the date of issuance of this special reply, they have conducted necessary verification and verification of the facts involved in relevant matters, and issued legal opinions accordingly.
This special reply is only for Beijing Transtrue Technology Inc(002771) the reply to the above concern letter, and shall not be used for any other purpose.
Based on the above situation and in accordance with the recognized business standards, ethics and diligence spirit of the lawyer industry, our lawyers hereby issue the following special reply:
Question: please verify and explain the internal review and decision-making procedures performed in the formulation and revision of the system, whether the setting of relevant processes and authorities in the system does not meet the company’s current actual business management needs and is not operable, and whether the relevant systems conflict with the existing management systems, Whether the relevant management systems violate the company law and the articles of association. Ask a lawyer to check and express clear opinions.
reply:
(i) Internal review and decision-making procedures for the formulation and revision of the system
According to the information provided by the company and verified by our lawyers, on August 12, 2021, Beijing Transtrue Technology Inc(002771) held the 11th meeting of the 4th board of directors, reviewed and approved the financial management system, monetary fund management system and seal management system, and on August 17, 2021, Beijing Transtrue Technology Inc(002771) held the 12th meeting of the 4th board of directors, reviewed and approved the information disclosure management system.
According to the description of internal review and decision-making procedures issued by he Xiaobo, chairman and chief financial officer of the company, and Wang Xiaogang, general manager of the company, “The financial management system and monetary fund management system shall be revised and drafted by the Deputy financial manager arranged by the chief financial officer (because the former chief financial officer leaves office, the chairman of the company shall exercise the responsibilities of the financial director of the company on behalf of the new financial director before he takes office), which shall be finalized after study by the chief financial officer and the general manager, and the chairman agrees to submit them to the board of directors for deliberation; The seal management system shall be revised by the office arranged by the general manager and finalized after study with the chairman, who agrees to submit it to the board of directors for deliberation; The information disclosure management system shall be revised by the board secretary office arranged by the chairman and finalized after consulting the perennial legal adviser, and submitted to the board of directors for deliberation with the consent of the chairman.
The lawyers of the firm noted that the Secretary of the board of directors of the company once appointed a securities representative to consult with the lawyers of the firm on the revision of the information disclosure management system. The lawyers of the firm’s identification of “major events” in Article 28 of the revised information disclosure management system is inconsistent with that of “major events” in Article 7 of the company’s internal reporting system of major information; In case of inconsistency between the determination of “insider” in Article 61 of the revised information disclosure management system and the determination of “insider” in Article 8 of the company’s insider registration management system, the opinions put forward to the company on the simultaneous revision of relevant systems were not accepted by the company.
According to the reply issued by Ma ya, director and deputy general manager of the company, “The proposal of information disclosure management system was put forward in the wechat group of the president’s office at 18:05 on August 14, but the directors were required to put forward modification opinions at 24:00 on the same day in order to issue the notice of the board of directors. In less than 6 hours, the directors could not conduct careful review”.
（2） Whether the setting of relevant processes and authorities in the system does not meet the current actual business management needs of the company and is not operable
According to the chairman of the company The reply note issued by he Xiaobo, chief financial officer, “from 2018 to 2020, the overall growth rate of the company’s industry slowed down, especially since the outbreak of covid-19 epidemic in 2019, the company’s operating revenue continued to decline, and the period expenses (sales expenses, management expenses, financial expenses) The proportion of operating income showed an upward trend, and the net profit and return on net assets also fell sharply. In 2021, the operation of the company has not been effectively improved. The operating revenue has decreased by 7.88% compared with the same period in 2020, and the proportion of three expenses in the operating revenue has reached 15.77%, an increase of 2.07 percentage points compared with the same period in 2020, the highest value since 2019. The decline of operating revenue and the rise of period expenses led to a loss in the first half of 2021. Based on the operation status of the above-mentioned company, in order to avoid the continuous deterioration of the company’s operation, realize the turnaround of the company’s performance in the second half of 2021, and lay a good foundation for the company’s subsequent development, the company held the 11th meeting of the Fourth Board of directors on August 13, 2021 and considered and adopted the revised
<财务管理制度>
The motion of the. Compared with the original financial management system, the revised financial management system adopts more strict and prudent management in terms of approval level and approval amount, which is conducive to the effective control and fine management of the company’s expenses and the improvement of the company’s operation level “.
According to the reply note issued by Wang Xiaogang, general manager of the company “After the former chief financial officer of the company resigned, the chairman of the board of directors acted as the chief financial officer. On June 25, 2021, the general manager of the company appointed a new deputy general financial officer to assist the chief financial officer. After the deputy general financial officer was in place, he failed to substantially intervene in the company’s financial work, failed to go through the company’s approval process, and failed to perform his duties normally before the meeting of the board of directors. The management has reason to doubt the company’s financial affairs There is a risk of getting out of control. At the same time, the company’s official seal was kept by the person in charge of the multimedia section authorized by the chairman, but it has not been returned since the chairman and the seal management department have urged for many times. If the company’s official seal is not used properly, it may cause losses to the company. In view of the possible out of control situation of the company at present, in order to maintain the stability of the company in a specific period, strict internal control shall be carried out in a specific period to protect the interests of shareholders and small and medium-sized investors. Through careful judgment and discussion, the management of the company has found that the relevant processes and authority settings basically meet the current actual business management needs of the company, and play a role in stabilizing the company in special periods and ensuring the smooth operation of the company’s business. According to the actual situation and development needs, the company will further revise and improve various systems, especially the improvement of processes and authorities, so as to meet the actual development needs of the company’s business.
According to the reply issued by Ma ya, director and deputy general manager of the company, (1) “Revised seal management system” It is required that the paper approval process shall prevail and shall be approved by the General Manager / Chairman, which not only changes the previous practice of approval through the OA system, but also improves the level of approval and adds multi-level approval arrangements, which does not meet the actual business needs and is not operable, which will seriously affect the orderly and efficient development of the company’s business activities. “; (2) “The revision of the financial management system reduces the financial management level and increases the management cost, which is inconsistent with the actual business needs of the company, which will seriously restrict the normal business development of the company.”; (3) “The original intention of formulating the monetary fund management system is not to optimize the company’s management system, but to return the fund use right of the company, subsidiaries and branches to the chairman and / or general manager, excessively squeeze the fund use right of subsidiaries, and seriously restrict the business development of subsidiaries.”; （4） “The above seal, financial management, use of monetary funds, information disclosure management and other systems involve core issues such as the company’s daily operation and management and investors’ right to know. Before the system is revised, the necessity and rationality of the revision should be carefully evaluated, and opinions should be collected, investigated and discussed in all business lines and departments of the company. The above work is not carried out in this revision, and Unscientific management mode “.
At the same time, The reply issued by Maya pointed out that “(1) the company’s main business has not changed in the past two years, but is still multimedia video system construction and service business and data center system construction and service business. The existing management mode is an effective operation mode gradually formed by the company’s management team after years of exploration and practice. (2) From the perspective of the company’s operation and management, the company has always implemented the approval processes such as seal management, financial management and various expenses. Senior executives appointed by the controlling shareholders are set up at the corresponding nodes for approval, so there is no risk that the management of the company’s controlling shareholders is out of control. (3) From the perspective of operating income, the company’s performance has declined slightly in recent two years. In 2020, it is mainly affected by the epidemic. The decline in operating income in the first half of 2021 is mainly due to the uncertainty of the implementation and acceptance progress of large projects. Although the performance has declined slightly, the company’s operation is stable and good, In the first half of 2021, the amount of newly signed contracts and projects under construction increased in a large proportion compared with the same period of the previous year. (4) From the perspective of period cost, in the first half of 2020, affected by covid-19 epidemic, market activities decreased, and travel, office and other expenses decreased directly. At the same time, the state also gave strong support for social security relief. On the whole, the cost of the company was at a low level compared with the same period in recent years. In 2021, the company actively expanded new business and increased qualification construction. The business scale was expanded compared with that of the previous year. Various expenses were continuously invested in strict accordance with the annual budget. At the same time, the state resumed social security payment. Therefore, the overall expenses increased compared with the same period of the previous year. However, based on the difference of the same period decline in the proportion of income, the proportion of expenses was relatively reflected in a certain increase, However, the overall expenditure is reasonable and controllable relative to the business scale. ”
As for the background of the system revision, the reply issued by Maya pointed out that “the system revision is based on the fact that the current controlling shareholder of the company, Suzhou Longyue Holding Co., Ltd. (hereinafter referred to as” Longyue holding “) is unable to pay the share transfer payment and perform the overall transaction arrangement to the founding shareholders Wang Guohong, Hu Xiaozhou, Maya, Chen Ruiliang and Wu Lan (hereinafter collectively referred to as” old shareholders “) on schedule, The background of the relevant litigation. “; “In the past two years, the company’s main business is still the multimedia video system construction and service business and data center system construction and service business operated and managed by the founding shareholders. Under the above background, Longyue holdings plans to interfere with the company’s original business and the functions and powers of middle managers by modifying the company’s internal management system through the board of directors, which limits the company’s business vitality and affects the company The normal operation of the company has caused interference to the stable and orderly operation of the company “.
The lawyers of the firm have noticed that there are great differences within the company’s management, between the management and the business department over the content of the system revision; According to the information provided by the company and the replies issued by the company’s directors and senior managers, there is no work record of consultation with the company’s business departments and subsidiaries before the system revision.
In conclusion, our lawyers believe that the amendments to the system were proposed by the directors and senior executives designated by Longyue holdings, and there is no work record of negotiation with the company’s business departments and subsidiaries, which extends the contradiction between the company’s shareholders to the company’s internal management, and has caused confusion in the company’s internal management to a certain extent; The establishment of various systems, processes and authorities is deliberated and approved by the board of directors, which is in line with the provisions of the company law and the articles of association. However, such amendments have caused conflicts among the relevant business departments of the company, and there is a risk of non operability and non implementation before the dispute between the company’s shareholders is resolved.
（3） Is there any contradiction or conflict between relevant systems and existing management systems
After verification, there are contradictions and conflicts between the revised seal management system and information disclosure management system and the existing management system of the company, as follows:
(1) Article 18 of the seal management system “the seal of the board of supervisors shall be managed and used by the Secretary of the board of directors.” And Article 2 “chairman of the board of supervisors” of the rules of procedure of the board of supervisors
