“Niusan” high-profile prosecution of listed companies is rare in the capital market, but Dazhong Transportation (Group) Co.Ltd(600611) ( Dazhong Transportation (Group) Co.Ltd(600611) , SH) appeared twice in a month.
On the evening of March 11, Dazhong Transportation (Group) Co.Ltd(600611) announced that it had received a summons from Shanghai Xuhui District People’s court and planned to hold a court session to hear the dispute over shareholders’ right to know filed by the plaintiff. Liu Wei, the company’s A-share shareholder, requested to cancel the relevant proposal because he was dissatisfied with the relevant proposal of the company’s phase I employee stock ownership plan.
According to the announcement on February 19, Lu Shenglin, the company’s B-share shareholder, also filed a lawsuit to invalidate the proposal related to the company’s phase I employee stock ownership plan. The reporter noted that the price of Dazhong Transportation (Group) Co.Ltd(600611) ESOP to purchase the company’s shares was 1.50 yuan / share, while as of the closing on March 11, Dazhong Transportation (Group) Co.Ltd(600611) closed at 3.40 yuan / share. From the disk, when Liu Wei was involved in Dazhong Transportation (Group) Co.Ltd(600611) more than, his shareholding seemed to be in a state of floating loss.
within one month, two “niusan” filed a lawsuit
According to the announcement, in September 2021, Dazhong Transportation (Group) Co.Ltd(600611) held the first extraordinary general meeting of shareholders in 2021, deliberated and passed the “proposal on the first phase of the company’s employee stock ownership plan (Draft) and its summary”, “proposal on the management measures of the company’s first phase of employee Stock Ownership Plan” “Proposal on requesting the general meeting of shareholders to authorize the board of directors to fully handle matters related to the company’s phase I Employee Stock Ownership Plan”.
In this regard, Liu Wei filed a lawsuit and asked for an order to revoke the relevant proposal of Dazhong Transportation (Group) Co.Ltd(600611) above employee stock ownership plan on the grounds of shareholders’ right to know.
According to choice data, by the end of September 2021, Liu Wei held Dazhong Transportation (Group) Co.Ltd(600611) 9459600 shares, accounting for 0.40% of the total share capital of the company, and was the ninth largest shareholder of Dazhong Transportation (Group) Co.Ltd(600611) . At the end of the first quarter of 2017, Liu Wei became the top ten shareholders of Dazhong Transportation (Group) Co.Ltd(600611) with 8.195 million shares (accounting for 0.35% of the total share capital).
It is worth mentioning that more than Niu San and Liu Wei filed a lawsuit. On February 19, Dazhong Transportation (Group) Co.Ltd(600611) issued an announcement, and another shareholder Lu Shenglin filed a lawsuit on the company’s phase I employee stock ownership plan, requesting that the relevant motion be invalidated.
ESOP cost price is about half of the market price
Niusan’s high-profile prosecution of listed companies is rare in the capital market, but Dazhong Transportation (Group) Co.Ltd(600611) twice received litigation, with a gap of only one month. What is the dissatisfaction of this employee stock ownership plan?
The reporter inquired about the previous announcement and found that as of March 1, 2021, the total number of shares repurchased by the company through centralized bidding transaction was 879762 million shares, accounting for about 3.72% of the total share capital of the company, the purchase price range was 3.41 yuan ~ 4.30 yuan / share, the average repurchase price was 3.67 yuan / share, and the total amount paid was 323 million yuan.
The first phase of the company’s employee stock ownership plan mentioned that the purchase price of repurchased shares in the employee stock ownership plan is 1.50 yuan / share. It is worth mentioning that the data show that Dazhong Transportation (Group) Co.Ltd(600611) share price has always exceeded 3 yuan / share in recent three years. This means that employees buy back the company’s shares at nearly half price.
Zheng Peimin, chairman of Rongzheng consulting, who has focused on equity incentives for listed companies for many years, said that in equity incentives, discounted and half price share prices are common, “How else is it called incentive? Incentive is cheap, but there are usually conditions, including how long continuous service, performance evaluation, etc. Dazhong Transportation (Group) Co.Ltd(600611) the employee stock ownership plan is legal and reasonable, which is very common.” Zheng Peimin said.
However, the reporter also noted that in the employee stock ownership plan announced this time, the performance evaluation indicators at the individual level are set, but the performance evaluation objectives at the company level are not set. Zheng Peimin said that this situation is also common in the equity incentive of listed companies. The assessment at the company level is not mandatory by laws and regulations, which is a loophole in the system. However, when the laws and regulations have not been changed, Dazhong Transportation (Group) Co.Ltd(600611) the scheme is still legal, and it is difficult to judge whether it is “reasonable”.
According to the data, from 2018 to 2020, Dazhong Transportation (Group) Co.Ltd(600611) revenue was 3.557 billion yuan, 3.802 billion yuan and 2.639 billion yuan respectively, with a year-on-year increase of 39.02%, 6.90% and – 30.60% respectively. In 2020, the company realized a net profit attributable to shareholders of listed companies of 535 million yuan, a year-on-year decrease of 45.44%.
