Continuous financial fraud, attempt to avoid delisting, and bad nature of violations... Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) due to major illegal compulsory delisting, it will be officially separated from the A-share market.
On March 22, the Shanghai Stock Exchange decided to terminate the listing of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) bafter deducting the falsely increased operating income, the actual operating income of the company in three consecutive fiscal years in 2018, 2019 and 2020 was less than RMB 10 million, and the financial and accounting report of 2020 was issued with qualified audit report. At the same time, the company evaded delisting in a bad nature. According to the facts identified in the administrative punishment decision of the CSRC, the company finally touched on major illegal compulsory delisting, and became the first A-share compulsory delisting company in 2022.
The Shanghai Stock Exchange said that investors who have suffered losses due to illegal information disclosure such as false statements in Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) may actively seek compensation from the company and its annual audit institution Shenzhen Tangtang accounting firm through judicial channels, and may entrust the investor protection institution to participate in the litigation as a representative. Subsequently, the company's shares will enter the delisting consolidation period on March 30. There is no price limit on the first day of the consolidation period, and the trading will be delisted after 15 trading days.
How did Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) come to a dead end step by step after nearly 23 years of A-share listing? The reporter of Shanghai Securities News found that the Rome wasn't built in a day. For many years, it has been empty shell, frequently "wearing stars and hats", many years of financial fraud, rough and harsh means and malicious avoidance of delisting. Under the high-pressure situation of "zero tolerance" in current supervision, the outcome of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) delisting seems to have been doomed.
consecutive years of financial fraud with rough forms and bad means
On March 2, 2022, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) announced the receipt of the decision on administrative punishment (hereinafter referred to as the decision) of the CSRC. According to the decision, there are false records in the annual reports of the company in 2018 and 2019, including falsely increasing the operating revenue of 2018 by 133854 million yuan, accounting for 100% of the disclosed operating revenue of the current year; The falsely increased operating income in 2019 was 5.7236 million yuan, accounting for 55.13% of the disclosed operating income in the current year. After retroactive adjustment, the operating income of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) 2018 and 2019 was RMB 0 and RMB 4.6586 million. In other words, almost all the so-called business income of the company comes from fraud.
The reporter consulted the decision on administrative punishment and found that the amount of fraud by the company seems to be low, but its means are very simple and rough.
For example, the funds used to sign trade contracts circulate between the actual controller and his friends to confirm the income. For another example, property income is recognized when property services are not provided and there is no property management cost. Specifically, in 2018, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) signed an iron concentrate sales contract with Axin commerce and trade, and signed an iron concentrate purchase contract with Sibei investment on the same day. Based on this, the company recognized an operating revenue of 133854 million yuan. The actual controller of Axin commerce and trade and the shareholder of Sibei investment are he, a good friend of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) actual controller Huang Wei. It is verified that the company has not obtained the control right of relevant commodities in the process of trade business, and the relevant funds form a closed loop among the company, suppliers and customers. The relevant sales contracts do not have commercial substance and do not meet the conditions for revenue recognition in the accounting standards. In 2019, the company signed a sales contract with Mr. He's Axin trading and Sibei investment again, falsely increasing the operating revenue by 2.2166 million yuan.
Moreover, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) in 2019, a new way of counterfeiting was added, and the property management income of 2.297 million yuan was recognized through sun company dingshengyuan under the condition that it did not actually provide property management services, did not confirm the cost of property services, and did not actually obtain cash inflow. Even during the audit in 2020, the company also signed a rent credit agreement with the relevant parties, falsely increasing the operating income by 1.3 million yuan when the relevant parties did not actually lease the real estate, manage the sublease or receive the Sublease Rent, and the relevant debts were not offset.
The reporter further found that the number of employees of the company corresponding to the financial year of fraud is only more than a dozen. The limited resources determine the single and rough way of fraud, which also reflects the subjective malignancy and bad circumstances of the company's "creating conditions and fraud" to avoid delisting.
tighten the system and "old cases" cannot escape the law
So, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) this time was delisted due to major illegal delisting. What circumstances are applicable to major illegal delisting?
The reporter consulted the relevant rules and interviewed market experts and learned that the delisting system newly revised and implemented in December 2020 specifically includes five major illegal delisting situations of securities, namely, fraudulent issuance of initial listing, fraudulent issuance of reorganization listing, annual report fraud to avoid delisting, the quantitative index of major financial fraud delisting of "fraud amount + fraud proportion" and other situations recognized by the exchange. These five situations focus on whether illegal acts affect the listing status of the company's shares.
Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) is the case of triggering "annual report fraud to avoid delisting". According to the illegal facts found out by the CSRC, the actual operating income of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) 2018 and 2019 was less than 10 million yuan. Meanwhile, the company's operating income in 2020 was 3.4587 million yuan. The actual operating income of the company has been less than 10 million yuan for three consecutive fiscal years, and the financial and accounting report of 2020 has been issued with qualified audit report.
The above capital market experts told reporters that for the financial fraud before the new regulations came into effect, the supervision has tightened the loophole of the system in advance. According to the relevant provisions of the Listing Rules of Shanghai Stock Exchange (revised in December 2020) issued by Shanghai Stock Exchange, after the new delisting comes into effect, the company that receives the prior notice of administrative punishment from the CSRC and may involve major illegal compulsory delisting shall be determined according to the facts determined in the subsequent decision on administrative punishment, If the company's financial indicators for any consecutive year from 2015 to 2020 actually touch the situation of major illegal compulsory delisting stipulated in the original measures for the implementation of major illegal compulsory delisting of listed companies, the Shanghai Stock Exchange will implement major illegal compulsory delisting of its shares.
This means that similar to Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) such financial fraud that occurred before the new regulations came into effect but was found after the new regulations came into effect, the applicable conditions have also been delineated to apply the "old standard" to avoid the "vacuum" of the rules. Experts further pointed out that the transition period arrangement of the new delisting regulations is to lock in the companies that evaded the termination of listing indicators at that time through financial fraud. The companies that should have delisted but did not delist, on the one hand, reflect the return to the original facts, on the other hand, also reflect the severe crackdown on financial fraud. Therefore, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) because the revenue is less than 10 million yuan for three consecutive years, it no longer meets the listing conditions at that time.
There is no doubt that it has touched on major illegal delisting.
Market experts said frankly that financial fraud is an act that seriously disrupts the market order and causes serious damage to investor confidence and information disclosure order. Whether companies that "enter" the capital market through financial fraud, or companies that "fall behind" after listing but still "rely on" the capital market, they are all destroyers of the overall ecological environment of the market. Companies like Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) such as these have concealed the fact that they have touched the financial delisting index and should terminate the listing. Regardless of the amount and proportion of financial fraud, they should not continue to maintain the listing status.
listed for nearly 23 years
With the announcement of termination of listing, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) will also end the suspension and enter the delisting consolidation period, waiting to be delisted. For this year's shell company with chaotic governance, this outcome is not surprising.
It is understood that Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) formerly known as Chongqing Siwei porcelain Co., Ltd., was listed on Shanghai Stock Exchange on September 23, 1999. In the nearly 23 years of listing, the company has been in the state of "wearing stars and hats" for many years. Especially in 2014, the company also known as " ST guochuang" was deeply involved in the "Youdao illegal fund-raising case", broke out huge debts, and then "accelerated the decline".
By February 2015, due to the huge debts of the company at that time, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) was applied for bankruptcy reorganization in the hope of replicating the "St reorganization model" with high success rate at that time. At that time, Huang Wei (the current actual controller of the company) took over Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) . However, because the core issue involved in the reorganization, that is, debt confirmation, has triggered disputes and disputes, there has been an unprecedented retrial of the reorganization case by the court. It is also because of the major uncertainty of the reorganization that the trading of the company's shares has been suspended for a long time. In this process, Huang Weitong further increased the shareholding ratio by subscribing for shares converted from reorganization. In June 2020, the court ruled to reject the applicant's appeal against the reorganization case, and the risk of uncertainty in reorganization was eliminated. In the same year, the company failed to disclose the 2019 annual report within the statutory time limit, touched the normative delisting index, and the trading of shares was resumed as of June 30, 2020.
In recent years, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) has always been the state of empty shell of its main business, with chaotic corporate governance and frequent violations of laws and regulations. In terms of business, the company mainly relies on sporadic trade business and rental income of investment real estate to maintain its operation. It is a typical shell company, and there are major uncertainties in its sustainable operation ability. In terms of corporate governance, the company's internal control failed, and there were a large number of violations in the early stage. If the periodic report was not disclosed within the statutory time limit, there were situations such as occupation of non operating funds and illegal guarantee, which were subject to disciplinary sanctions by the exchange and administrative penalties by the CSRC for many times. At present, Huang Wei, the actual controller of the company, has been banned from the market, and the public security department has also filed a criminal investigation on the company and its actual controllers suspected of illegal disclosure and non disclosure of important information.
The end of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) listing was announced with the decision of the CSRC. The company's financial fraud is facing major illegal delisting, which is not without signs. The company has sounded the "alarm" many times in the early stage.
On January 18, 2021, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) was filed for investigation by the CSRC. According to statistics, as of March 2, 2022, when the company received the decision on administrative punishment, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) issued 18 risk warning announcements that the company's shares may touch major illegal compulsory delisting and be terminated from listing. In the announcement, the company frequently prompted the risk of major illegal compulsory delisting, and the risk that the shares will be suspended and terminated within 15 trading days after receiving the relevant administrative punishment decision. This time, the company received the relevant decision, which touched on major illegal delisting, which can be said to be expected.
"delisting" cannot be "exempted" and investors can actively protect their rights
Although Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) faces delisting, the relevant responsible person will never be "exempted" for this.
Legal experts told reporters that in the delisting process of listed companies, investors can rationally claim shareholders' rights through legal channels. The current system provides a variety of ways to protect the rights of small and medium-sized investors.
First, shareholders can take measures to safeguard shareholders' rights according to the actual situation. On January 21, 2022, the Supreme People's court and China Securities Regulatory Commission jointly issued the notice on the application of the provisions of the Supreme People's Court on the trial of civil compensation cases for misrepresentation infringement in the securities market. The judicial adjudication of civil compensation cases for misrepresentation in securities has entered a new era, which has also greatly improved the efficiency of safeguarding the rights of small and medium-sized investors.
According to the administrative punishment decision of the CSRC, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) and Shenzhen Tangtang accounting firm have illegal information disclosure acts such as false statements, and investors who suffer losses can seek civil relief or compensation through judicial channels on the grounds that they have been infringed by false statements. When filing securities civil compensation litigation such as false statements, the investor protection institution may be entrusted to participate in the litigation as a representative. At present, the relevant investors corresponding to companies with multiple financial fraud have been compensated.
For example, in April 2021, more than 50000 investors initiated a class action against Kangmei pharmaceutical through the CSI small and medium-sized Investor Service Center (hereinafter referred to as the "investment service center"). In December 2021, the Investment Service Center announced that the first special representative's lawsuit would be executed, and 52037 investors of Kangmei pharmaceutical would be paid about 2.459 billion yuan in cash, debt to equity swap, trust usufruct and other ways.
Second, after the termination of listing, the shareholders of the company can still exercise their rights according to law. It is normal market behavior for listed companies to be terminated from listing. After the company's listing is terminated, although its shares are not traded on the Shanghai Stock Exchange, its assets, liabilities, operation, profit and loss and other conditions do not change, and it can still operate normally. According to the provisions of the company law, after the termination of listing, the shareholders of the company still enjoy the rights of shareholders such as the right to know the company and the right to vote, and the rights enjoyed by shareholders will not change. After the listing is terminated, the shareholders of the company can still transfer their shares in accordance with the regulations.
delisting normalization high delisting risk of multiple companies
Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) will the delisting bell ring deter a group of high-risk companies on the verge of delisting? In the momentum of delisting normalization, the answer is self-evident.
At present, in addition to Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) , Xin Jiang Ready Health Industry Co.Ltd(600090) also received the notice of administrative punishment from the CSRC for financial fraud. According to relevant facts, the company is also likely to be terminated from listing after receiving the decision. Combined with relevant cases, it is not difficult to see that under the high-pressure situation of "zero tolerance" for financial fraud, malicious avoidance of delisting and other acts by all regulatory parties, the living space of such acts will continue to be compressed.
In addition to major illegal compulsory delisting companies, it is expected that a number of financial delisting companies will appear this year. In January 2022, January 2022, January 2022, January 2022, January 2022, January 2022, January 2022, January 2022, after the Shanghai Board Companies in the Shanghai stock market released the performance pre notice. After the performance pre notice of the performance notice from the companies in the Shanghai board of the Shanghai board of the Shanghai board of the Shanghai board of the Shanghai board of the Shanghai stock market in the January of January, January 2022, January 2022022, January 2022022, January 202202202following the January January 2022, January 202following the January 202202january January, January 202202202202202following the January 202following the release of the performance pre notice from the performance notice of the companies in the Shanghai board of the Shanghai board of the Shanghai board of the main board of the Shanghai board of the Shanghai board of the first year of January, and the Poten Environment Group Co.Ltd(603603) Poten Environment Group Co.Ltd(603603) Chunghsin Technology Group Co.Ltd(603996) 0399 Chunghsin Technology Group Co.Ltd(603996) Chunghsin Technology Group Co.Ltd(603996) Chunghsin Technology Group Co.Ltd(603996) Duzhe Publishing&Media Co.Ltd(603999) 96 financialcompulsory delisting, in addition, many companies have been questioned to avoid delisting suspicion, and the same risk is high.
Since the implementation of the new delisting regulations, the normalized delisting mechanism is gradually taking shape, and the concept of "retreat as much as possible" is gradually fully recognized, and a new market ecology of entry and exit and survival of the fittest is gradually being constructed. Experts suggest that the export of the capital market is becoming more and more smooth, and investors should adjust their investment philosophy in time and abandon the trend of "frying small and poor", otherwise they are likely to face heavy losses.
The reporter noted that in the early stage, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) after receiving the advance notice of administrative punishment and making it clear that it is likely to touch major illegal compulsory delisting, the stock price still rose by the limit for several trading days, and some capital speculation psychology still exists. Once it becomes the "last successor", these investors will also face huge losses. At a time when the normalization of delisting is accelerating, investors should uphold the concept of value investment and stay away from companies with delisting risks.
