Easy Visible Supply Chain Management Co.Ltd(600093)
Special note on delisting
1、 Overview of delisting
On July 6, 2021, Easy Visible Supply Chain Management Co.Ltd(600093) (hereinafter referred to as “the company” or “easy to see shares”) was warned of delisting risk by Shanghai Stock Exchange (hereinafter referred to as “Shanghai Stock Exchange”) because the audited ending net assets in 2020 were negative and the financial and accounting report in 2020 was issued without an opinion. The company disclosed the annual report of Easy Visible Supply Chain Management Co.Ltd(600093) 2021 and the audit report of Easy Visible Supply Chain Management Co.Ltd(600093) 2021 (dahuazi [2022] No. 0011868) on April 27, 2022. The audited ending net assets of the company in 2021 were negative and the audit report with no opinion was issued by Dahua Certified Public Accountants (special general partner). According to the relevant provisions of article 9.3.11 of the Listing Rules of Shanghai Stock Exchange (revised in January 2022) (hereinafter referred to as the “Listing Rules”), the listing of the company’s shares will be terminated.
2、 Impact of delisting on the company
According to article 9.3.14 of the listing rules, the Shanghai Stock Exchange will decide whether to terminate the listing of the company’s shares within 15 trading days after the company discloses the 2021 annual report. Up to now, the company has not received the decision of Shanghai Stock Exchange on the delisting of the company’s shares.
According to articles 9.6.1 and 9.6.2 of the listing rules, if the listing of the company’s shares is terminated, the company’s shares will enter the delisting consolidation period and be marked with “delisting” in front of the stock abbreviation from the next trading day after the expiration of 5 trading days after the date when the Shanghai Stock exchange announces the decision to terminate the listing of the company’s shares. The trading period of the delisting consolidation period is 15 trading days. According to article 9.6.10 of the listing rules, the Shanghai Stock Exchange will delist the company’s shares within 5 trading days after the expiration of the delisting consolidation period, and the listing of the company’s shares will be terminated.
According to the provisions of article 9.1.15 of the listing rules, after the listing of the shares of a listed company is terminated, it shall hire a securities company with the qualification of sponsoring securities business to immediately arrange for the shares to be transferred to the National SME share transfer system and other securities trading places for share transfer after the Shanghai stock exchange makes the decision to terminate the listing of its shares, so as to ensure that the shares of the company can be transferred within 45 trading days from the date of delisting.
3、 Other important matters
On April 19, 2022, the company received the advance notice of administrative punishment and market entry ban (punishment Zi [2022] No. 25) (hereinafter referred to as the “notice”) issued by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”). The suspected illegal facts of the company are: there are false records and major omissions in the regular reports from 2015 to 2020; Failed to disclose the 2020 annual report on schedule. According to the matters notified in the notice, the company adopts the retrospective restatement method to correct the important early errors involved, and makes retrospective adjustments to the financial statements from 2016 to 2020. After retroactive restatement, the net profits attributable to the owners of the parent company from 2016 to 2020 were -461 million yuan, – 635 million yuan, – 1472 million yuan, – 1150 million yuan and – 5419 million yuan respectively. According to article 9.5.2 (IV) of the listing rules, the company’s shares may face major illegal forced delisting. The final facts shall be subject to the conclusion of the decision on administrative punishment issued by the CSRC.
4、 Description of the board of directors
(I) reasons for delisting of the company’s shares
1. The commercial substance of some businesses is in doubt, and the company’s shares are subject to delisting risk warning
In 2021, the company encountered unprecedented difficulties in its development. During the preparation of the company’s 2020 annual report, the company’s management noticed that there were doubts about the commercial essence of some businesses and made every effort to promote business verification. On June 20, 2021, the shareholder of the company, Yunnan Jiutian Investment Holding Group Co., Ltd. (hereinafter referred to as “Jiutian group” or “Jiutian holding”) acknowledged the occupation of funds in a letter. Based on the requirements of accounting standards, the actual situation of the company’s assets and the credit of the fund occupier, the company made provision for credit impairment of overdue assets in consideration of accounting prudence, so as to truly and fairly reflect the financial situation of the company. The company incurred large losses in 2020 and its net assets at the end of the period were negative. The company’s financial and accounting report in 2020 was issued with an audit report that could not express an opinion by the accountant, and the internal control audit report with a negative opinion was issued for the internal control in 2020. From July 6, 2021, the company’s shares were subject to delisting risk warning and traded on the risk warning board.
2. Jiutian group and its actual controller conducted false business and falsely increased the performance of easy to see shares
On April 19, 2022, the company received the notice issued by the CSRC. In the early stage, the company’s business management verified the business with doubtful business essence, which was confirmed by the CSRC as a false business instructed and directed by Jiutian group and its controller, thus falsely increasing the company’s performance. There are false records and major omissions in the annual report from 2015 to 2020 disclosed by the company. Leng Tianqing, then chairman, director and general manager of easy to see shares, made decisions, organized and implemented financial fraud, instructed and directed easy to see shares to carry out false business and falsely increased the performance of easy to see shares. He was the person in charge directly responsible for the illegal acts of easy to see shares’ information disclosure; As the controlling shareholder of easy to see shares from 2016 to 2018, Jiutian group did not truthfully disclose the actual controller, and instructed easy to see shares to carry out false business and falsely increase income and profits. According to the notice, Jiutian group and its actual controller directed Yijian shares to falsely increase its income by 56.251 billion yuan from 2015 to 2020 through falsely increasing bank deposits, notes receivable, fictitious supply chain payment, prepayment business, false factoring business, false trade business and other means; During the period from 2015 to 2019, the inflated profit was 4.237 billion yuan. After deducting the inflated profit, it is easy to see that the shares suffered losses for three consecutive years from 2018 to 2020, which is significantly different from the annual report data audited and issued standard opinions in the early stage of the company.
3. The related debts have not been paid off, and the net assets of the company are negative, which is difficult to reverse
The company has sent letters to Jiutian group many times to urge it to fulfill its obligation of capital occupation repayment. Up to now, Jiutian group has not replied to the time, nature, route and amount of funds occupied, the company has not received any repayment from Jiutian group, the uncollected situation of large amount of receivables has not been effectively improved, and the net assets of the company at the end of 2021 are negative. At present, the company’s shares touch the situation of financial compulsory delisting, and the company’s shares are facing delisting, for which Jiutian group and its actual controllers bear the main responsibility that cannot be shirked.
(II) work carried out by the board of directors to resolve delisting risks
Since 2021, the company and its subsidiaries have been involved in a number of lawsuits, assets and bank accounts have been sealed up and frozen, asset quality has deteriorated seriously, and liquidity difficulties have occurred.
In the face of the difficult situation, the board of directors of the company led the management to actively respond, unite the cadres and workers to rally, overcome various difficulties, strive to ensure the basic operation of the company, carry out business according to law, actively cooperate with the investigation and investigation work of the competent authorities, and find out the illegal facts. Main working conditions:
1. Strengthen the collection of creditor’s rights and improve the company’s financial situation
The company set up a working group to collect overdue arrears, and set up multiple collection teams for each overdue arrears project to actively collect overdue arrears. According to different collection objects, formulate collection plans and take various means to protect the legitimate rights and interests of the company. During the reporting period, the collection of some overdue debts of the company achieved phased results.
In view of the self confessed capital occupation of Jiutian holdings, the company protected the legitimate rights and interests of the company and shareholders through various means, established a special liquidation team, and the company hired accountants and lawyers to jointly conduct special verification on the assets and capital occupation of Jiutian holdings. The company actively cooperates with the investigation and investigation work of the competent authority, submits the collected information about Jiutian holding assets and other relevant information to the competent authority to assist in the investigation and investigation, and promotes the recovery of related creditor’s rights of Jiutian holding. According to the data collected by the company through self-examination during the process of case filing and investigation with the public security organ, the recoverable asset value of Jiutian group is expected to be about 220 million yuan.
2. Rectify internal control defects and improve corporate governance
In 2021, the company will make overall management, improve the risk control system, improve the communication mechanism, strengthen audit supervision, and continuously improve the level of corporate governance. In terms of rectification of internal control defects, the company formulated rectification objectives and tasks, hired Yunnan Caizhi Certified Public Accountants (general partnership) in the form of public bidding to guide the construction of the company’s internal control system, launched the trial operation of the improved internal system in the fourth quarter of 2021, and carried out in-depth self-examination and rectification from the aspects of internal control system construction, personnel management and internal control implementation. At present, the company has completed the rectification of internal control defects in 2020.
The company has made overall management, improved the risk control system, improved the communication mechanism, strengthened audit supervision, continuously improved the level of corporate governance, continuously optimized the internal control manual, and newly built and revised 44 internal management systems. Through the construction of internal control system, training and learning, combing of internal control defects, improvement of system and process reengineering, the company’s internal control construction has been significantly improved and improved.
3. The management actively performs their duties and promotes business development
In 2021, the company held 21 meetings of the board of directors, 13 meetings of the board of supervisors, 19 special committees and 9 special meetings of the chairman. The corporate governance layer actively participated in the decision-making of the company’s major affairs, strengthened the top-level design, studied and formulated the “14th five year plan” development strategic plan of Yijian Co., Ltd., and adjusted the company’s organizational structure and business structure in view of the problems existing in the early stage, such as weak business foundation, outstanding problems left over by history, lack of effective business model, low marketization of scientific and technological patent achievements and weak marketization personnel.
The company adjusted its business structure, withdrew from high-risk business, concentrated resources to expand high-quality customers, controlled business risks, ensured the authenticity of business background and improved asset quality. The company issued various business project management measures, clarified the key points of risk prevention, comprehensively combed and standardized the business approval and fund payment processes, standardized the contract review process, and carried out various business activities according to law.
4. Cooperate with the audit work to ensure the timely disclosure of the annual report
In December 2021, the company appointed Dahua Certified Public Accountants (special general partnership) as the auditor of the company’s financial statements and internal control in 2021. The company actively cooperates with the audit institution to carry out the annual audit work, holds many communication meetings, communicates the audit focus and work plan, and discloses the company’s regular reports on time.
On April 19, 2022, the company received the notice. Due to the short time interval between the receipt of the notice and the disclosure of the 2021 annual report and the many years involved in the correction of accounting errors, it brought great challenges to the timely disclosure of the company’s annual report. However, the company took the initiative to timely communicate with the annual audit accounting firm on the correction of accounting errors, adjustment of default interest, provision of impairment The retroactive adjustment of the previous financial report and other matters were fully communicated, and the announcement on the correction of 2021 annual performance forecast was disclosed on April 21. The company convened the board of directors in time and disclosed the 2021 annual report of the company and the announcement on the correction of accounting errors in the early stage of the company on April 27.
5. Strive for the support of shareholders and alleviate the pressure of operation
The company actively communicates with shareholders, strives for development support from major shareholders, promotes the settlement of overdue creditor’s rights, resolves the risk of due payment of financial liabilities, and makes every legal means to safeguard the rights and interests of the company and shareholders. Yunnan Industrial Investment Holding Group Co., Ltd. (hereinafter referred to as “Yunnan Industrial Investment Group”), the controlling shareholder of the company, has repeatedly resolved the risk of debt repayment for the company and its subsidiaries, helped the company alleviate the pressure of just exchange and capital and supported the development of the company and its subsidiaries by providing loans, guarantees and asset mortgages.
(III) focus of follow-up work
According to the relevant provisions of the listing rules, the listing of the company’s shares may be terminated by the Shanghai Stock Exchange. Although the company has many historical problems, freshness and liquidity risks, its development is facing great challenges. However, the board of directors of the company will still lead the company’s management and all employees to objectively face the problems left over by history, sum up experience and lessons, correct the source, establish confidence and courage, rise to difficulties, turn danger into opportunity, actively take measures, continuously improve working methods, properly understand risks, adhere to carry out various operation and management work in accordance with laws and regulations, diligently and responsibly, fully mobilize effective resources and improve the situation of the company, Promote the company into a correct development track to effectively safeguard the interests of the company and all shareholders.
5、 Investor protection arrangements
(I) delisting transaction arrangement
If the listing of the company’s shares is terminated, the company’s shares will enter the delisting consolidation period and be marked with “delisting” in front of the stock abbreviation from the next trading day after the expiration of 5 trading days after the date when the Shanghai Stock Exchange announces the decision to terminate the listing of the company’s shares. The trading period of the delisting consolidation period is 15 trading days. The Shanghai Stock Exchange will delist the company’s shares within 5 trading days after the expiration of the delisting consolidation period, and the listing of the company’s shares will be terminated.
(II) direction after delisting
According to article 9.1.15 of the listing rules, the company shall immediately arrange matters related to the transfer of shares into the National SME share transfer system for listing and transfer after the Shanghai stock exchange makes the decision to terminate the listing of the company’s shares, so as to ensure that the company’s shares can be listed and transferred within 45 trading days from the date of delisting.
(III) application for re listing
According to article 10.2.1 of the listing rules, after the listing of the shares of a listed company is terminated, if the circumstances of termination of listing (excluding the circumstances of termination of trading) have been eliminated and the following conditions are met at the same time, it may apply to the Shanghai stock exchange for re listing:
(1) The total share capital of the company shall not be less than RMB 50 million;
(2) The shares held by public shareholders account for more than 25% of the total shares of the company; If the total share capital of the company exceeds 400 million yuan, the shares held by public shareholders account for more than 10% of the total shares of the company;
(3) The company and its controlling shareholders and actual controllers have not committed any criminal crime of embezzlement, bribery, misappropriation of property, misappropriation of property or undermining the order of the socialist market economy in the past three years;
(4) The net profit of the last three fiscal years is positive and has accumulated more than 30 million yuan. The net profit is calculated based on the lower one before and after deducting non recurring profits and losses;
(5) The net cash flow from operating activities in the last three fiscal years has exceeded the people’s Bank of China
