On May 19, YueKai securities (830899. NQ) announced that it decided to terminate the application for directional issuance of shares initiated in 2021.
For the reasons for terminating the directional issuance of shares, YueKai Securities said that due to the great changes in the market financing environment, combined with the actual situation of the company, the market environment and other factors, the company plans to adjust and optimize the financing scheme and decides to terminate the directional issuance of shares.
YueKai securities further said that the termination of the directional issuance of shares does not involve the issue of liquidated damages, does not involve the return of subscription money to the subscription object, will not have an adverse impact on the company’s daily operation, and will not damage the interests of the company’s shareholders.
it took nearly one year from the release of the plan to the termination of the application
On June 10, 2021, YueKai securities deliberated and approved the first directional issuance of shares in 2021. According to the proposal, the total amount of funds raised by YueKai securities is expected to be no more than 15 billion yuan, which will be mainly used for the development of business activities such as investment and trading business, credit trading business and asset management business, as well as the repayment of subordinated debt and other debts.
On June 25, 2021, YueKai securities submitted the application documents for directional issuance of shares to the national stock transfer company, and received the letter on self-discipline supervision opinions on directional issuance of shares of YueKai Securities Co., Ltd. from the national stock transfer company on July 29. After examination, the national stock transfer company has no objection to the directional issuance of YueKai securities.
On August 11 of the same year, the application for directional issuance of shares of YueKai securities was accepted by the CSRC. However, on October 20, the CSRC issued the notice of suspension of examination of administrative license application of CSRC to YueKai securities and decided to suspend the examination of the administrative license application.
The Securities Regulatory Commission decided to suspend the investigation of the company’s application for directional issuance of shares. The previous announcement further showed that YueKai securities was suspected of failing to be diligent in the bond underwriting business of Shandong Shengtong Group Co., Ltd. (hereinafter referred to as “Shengtong group”) and was filed for investigation by the CSRC.
By 2022, in the 2021 annual report disclosed on February 24, YueKai securities also said that it would fully implement the capital and share increase in 2022, actively maintain communication with the regulatory authorities, complete the current round of capital and share increase as soon as possible, complete the target of this round of capital increase as soon as possible, and start the next round of capital and share increase as appropriate.
Since then, on April 7, the CSRC issued the notice on resumption of examination of administrative license application of the CSRC to YueKai securities, and decided to resume the examination of its application for administrative license for directional issuance of shares. At present, the above application for directional issuance is still under the examination of the administrative license of the CSRC.
However, YueKai securities actively pressed the fixed increase termination key more than one month after receiving the notice of resumption of examination.
Shengtong debt case storm
In fact, before the review of the fixed increase application was resumed, YueKai securities disclosed two announcements involving the progress of litigation on March 4 and March 22, both of which were related to the Shengtong debt case.
According to the announcement on March 4, the Qingdao intermediate people’s court held that Loken International Investment Management (Beijing) Co., Ltd. (hereinafter referred to as “Loken international”) sued YueKai securities, saying that the fund under its management held 17 Lusheng 01 bonds that could not be cashed at maturity, which was not an economic dispute case but suspected of economic crime, so it ruled to dismiss the prosecution.
However, the announcement on March 22 showed that Loken international appealed the decision of rejecting the prosecution in the first instance, requested to revoke the previous civil ruling of Qingdao intermediate people’s court, and instructed Qingdao intermediate people’s court to continue the trial.
The defendant’s seat at YueKai securities station stems from the fact that the company acts as the lead underwriter of “17 Lusheng 01”, “18 Lusheng 01” and “18 Lusheng 02” of Shengtong group’s non-public issuance of corporate bonds.
From 2013 to 2017, Shengtong group had fictitious purchase and sales business, prepared false financial account sets, and directly modified the audit report, resulting in false records in the prospectus of “17 Lusheng 01”, “18 Lusheng 01” and “18 Lusheng 02” of Shengtong group. YueKai securities failed to exercise due diligence in the process of due diligence, and there were false records in the verification opinions and commitment letter issued by YueKai securities, which also led to the company being filed for investigation by the CSRC.
On September 30, 2021, YueKai securities issued an announcement on the company’s receipt of the notice of filing a case from the CSRC
Previously, on December 23, 2021, YueKai securities was fined and confiscated 7.2 million yuan by the CSRC because the relevant responsible person failed to provide services for Shengtong group to issue corporate bonds diligently.
In addition, in the 2021 annual report, YueKai securities increased its non operating expenses by 168387% year-on-year to 207 million yuan, indicating that it was mainly due to the increase in the expected losses of civil litigation. The outstanding civil litigation disclosed in the annual report includes the Loken international litigation.
Due to the increase in the expected loss of civil litigation, the non operating expenditure of YueKai securities increased by 168387% year-on-year in 2021, which also dragged down the year-on-year decline in the total profit and net profit attributable to the parent company of YueKai securities.
In 2021, YueKai securities achieved an operating revenue of 1.204 billion yuan, an increase of 26.84% year-on-year (compared with the same period of the previous year); The net profit attributable to the shareholders of the listed company was 106 million yuan, a year-on-year decrease of 30.54%.
