Due to the non-compliance of net capital, Shanghai old futures company was ordered to rectify again.
According to the latest news on the official website of Shanghai Securities Regulatory Bureau, the net capital of Dongfang futures on December 20, 2021 was 26.15 million yuan, which was lower than the risk supervision index of “net capital not less than 30 million yuan” required by the measures for the management of risk supervision indicators of futures companies (Order No. 131 of the CSRC).
The regulatory documents pointed out that due to the company’s continuous losses and operational risks, which affected the sustainable operation of the futures company, Dongfang futures was ordered to make corrections before January 18, 2022, so as to make the company’s net capital regulatory indicators meet the specified standards.
the reporter found that Oriental futures was issued regulatory measures for “bad money” at least three times.
has been ordered to rectify
Founded in 1993, Dongfang futures, with a registered capital of 45 million yuan, is one of the earliest futures companies in China. Its business scope is commodity futures brokerage.
Tianyancha shows that China copper Shanghai Copper Co., Ltd. (hereinafter referred to as “China copper Shanghai copper”) and Shanghai Yayuan Investment Management Co., Ltd. (hereinafter referred to as “Shanghai Yayuan”) hold 75% and 25% of their shares respectively.
the reporter noted that in April 2020 and June 2021, the company was required to rectify by Shanghai Securities Regulatory Bureau because its net capital did not meet the standard.
in addition to poor management, the old futures company has had continuous problems in the past two years.
In May 2020, the regulatory document issued by Shanghai Securities Regulatory Bureau on Dongfang futures showed that the company dismissed the chief risk officer on April 10, 2020 only according to the requirements of Shanghai Yayuan, the shareholder of the company, without the resolution of the board of directors, in violation of the articles of association and chaotic corporate governance, which may affect the sustainable operation of the futures company. The relevant appointment and removal conditions and reasons were not reported to Shanghai Securities Regulatory Bureau, and there was no justified reason to dismiss the chief risk officer. The above acts violated the measures for the supervision and administration of futures companies (Order No. 155 of the CSRC) and other relevant provisions, and the company was ordered to make corrections before May 31, 2020.
After only five months, Dongfang futures was issued regulatory measures again due to the “out of control” behavior of internal control.
In October 2020, Dongfang futures passed relevant resolutions at the second interim Board of directors in 2019 to dismiss Zhao Yan as general manager, elect Xu Yanhao as chairman, Yang Quan as general manager and Zhao Yuanzhen as deputy general manager. However, the company failed to report the appointment and removal of relevant personnel to Shanghai Securities Regulatory Bureau as required, and Zhao Yan still actually performed the post of general manager until the regulatory department issued the regulatory documents, and other relevant personnel failed to actually perform their duties.
At the same time, Wang Yuejin, the former chairman of the company, was removed from the post of director by the resolution of the fourth shareholders’ meeting of the company on November 1, 2019, so he no longer served as the chairman. According to the articles of association, Xu Yanhao, the new chairman, should serve as the legal representative. However, the company failed to handle the company change registration of the legal representative in accordance with the provisions of the articles of association, affecting the normal performance of duties of relevant personnel.
For the above behavior, Shanghai Securities Regulatory Bureau believes that the governance of Oriental futures is not perfect and the internal control is chaotic. Due to violation of relevant regulations, the company was ordered to take corrective regulatory measures.
In addition to the non-compliance of personnel appointment and removal, in September 2020, the company was ordered to rectify due to the failure to establish information technology compliance and risk management system and relevant mechanisms, the failure to establish disaster backup center, the failure to set up internal IT audit posts and other violations.
Earlier, in January 2020, due to the delay in changing the term according to the articles of association, Shanghai Securities Regulatory Bureau launched a “heavy blow” on Oriental Futures: from January 16, 2020, the new account opening business of Oriental futures brokerage will be suspended; From January 16, 2020, the approval of all new business applications of Dongfang futures will be suspended.
or related to shareholder “infighting”
Behind the repeated “roll call” by the regulatory authorities, is it just because of “poor money” or other fishy things?
According to the official website of Dongfang futures, at the beginning of the establishment of the company, China Nonferrous Metals Industry and Trade Group Corporation and China Nonferrous Metals Industry East China supply and marketing company each held 50% equity and invested 5 million yuan.
After a series of equity changes and capital increase by shareholders, in November 2015, the shareholder of the company was changed to Chinalco Shanghai copper, with a capital contribution of 22.5 million yuan and a shareholding ratio of 75%; Shanghai Yingyu Investment Management Co., Ltd. invested 7.5 million yuan, with a shareholding ratio of 25%. In August 2018, the name of “Shanghai Yingyu Investment Management Co., Ltd.” was changed to “Shanghai Yayuan”. Shanghai Yayuan was a wholly-owned subsidiary of Yushang group.
As early as 2019, due to the dispute over the cancellation of the company’s resolution, the shareholder Shanghai Yayuan and Dongfang futures went to court. Behind the debate, there is no way around the core control dispute of the company.
it still needs to start six years ago.
According to the China referee document network, in August 2016, Shanghai Yayuan signed the Shanghai property rights trading contract with Chinalco Shanghai copper. Shanghai Yayuan invested 57.7129 million yuan to acquire 65% equity of Dongfang futures held by Chinalco Shanghai copper, but the CSRC did not approve the above equity change. Therefore, Shanghai Yayuan requested Chinalco Shanghai copper to return the equity transfer money and relevant expenses, and filed an arbitration with Shanghai Arbitration Commission in October 2019.
In November 2019, Dongfang futures held the fourth extraordinary shareholders’ meeting in 2019, The meeting deliberated and adopted several resolutions, such as “agreeing to transfer 65% of the defendant’s equity held by Chinalco Shanghai copper, determining the transferee and transfer price through online bidding for this listing transaction”, “authorizing Xu Yanhao as the operator to handle the industrial and commercial change registration procedures and related matters related to this share transfer within the scope of the resolution of the shareholders’ meeting”.
Shanghai Yayuan, who was dissatisfied with the resolution, sent Oriental futures to court with a petition. Generally speaking, there are two controversial points between the two sides: first, whether Chinalco Shanghai copper has the voting right of its equity; Second, whether the convening procedures and voting methods of the shareholders’ meeting violate laws, administrative regulations or the articles of association, or whether the contents of the resolution violate the articles of association.
The plaintiff Shanghai Yayuan believes that Chinalco Shanghai copper has received 65% equity transfer payment from Shanghai Yayuan for many years, and Shanghai Yayuan should actually hold 90% equity of Dongfang futures; Accordingly, Chalco Shanghai copper has transferred all the authority of futures operation and management of Dongfang futures to Yushang group since August 2014, and then transferred it to Shanghai Yayuan in January 2016, and has signed the handover document so far; During the operation of Oriental futures, Shanghai Yayuan has invested more than 80 million yuan in operation to ensure the continued legal and effective futures operation qualification of Oriental futures.
However, the defendant Dongfang futures argued that the relevant resolutions did not violate laws, administrative regulations and the articles of association in the convening procedures, the contents of the resolutions did not contradict the objective facts, and there was no content that “the resolutions of the extraordinary shareholders’ meeting shall not make resolutions on matters not listed in the notice”.
Meanwhile, Dongfang futures believes that Shanghai Yayuan has filed an arbitration on the equity transfer dispute with Chinalco Shanghai copper, and requesting Chinalco Shanghai copper to return the equity transfer money is not to confirm the qualification of shareholders. Chinalco Shanghai copper legally holds 75% of the shareholders of Dongfang futures, with voting rights.
As for the dispute points between the two parties, the court held that although the topics of the relevant meeting included the transfer of equity, the content was that Chinalco Shanghai copper transferred its 75% equity of the defendant, and the actual result of the resolution was that Chinalco Shanghai copper transferred its 65% equity of the defendant, the proportion of Chinalco Shanghai copper transferred its equity changed, and the content of this part of the notice was inconsistent with the content of the resolution, And sufficient to cause substantial impact.
Meanwhile, the transfer method and price determination method involved in the resolution are also attached to the subject matter of equity transfer and cannot be voted separately. Therefore, the resolution shall be revoked in its entirety.
With regard to the resolution of “authorizing Xu Yanhao as the handler to handle the industrial and commercial change registration procedures and related matters related to the equity transfer within the scope of the resolution of the shareholders’ meeting”, the court held that the authorized personnel are completely different from those specified in the meeting notice, and the change of the content is a substantive change, which should be an unannounced matter for shareholders. The above resolution has voted on matters not notified, which violates the provisions of the articles of association and shall be revoked.
Based on the above reasons, the court finally ruled to revoke the resolution of the fourth extraordinary shareholders’ meeting in 2019 made by the defendant Dongfang futures on November 1, 2019, which “agreed that the shareholder Chinalco Shanghai copper transferred 65% of the equity of the company held by it. The transferee and transfer price were determined through online bidding in this listing transaction”, And the resolution of “authorizing Xu Yanhao as the handler to handle the industrial and commercial change registration procedures and related matters related to the equity transfer within the scope of the resolution of the shareholders’ meeting”.
the reporter learned from informed sources that the reason why Dongfang futures failed to complete the capital increase was related to the “internal struggle” between shareholders. The intervention of regulatory authorities will help the company solve the internal governance problems as soon as possible. In recent years, the regulatory authorities have continuously increased the supervision of the futures industry, and the supervision of the compliance of futures companies is not only a single supervision of the corporate governance structure.
(Shanghai Securities News)
