After several twists and turns, the shares of listed companies frozen by the judiciary held by the controlling shareholder Jinhua Investment Holding Group Co., Ltd. (hereinafter referred to as “Jinhua investment”) were finally auctioned successfully.
On January 15, Alibaba trading platform showed that the auction of Ginwa Enterprise (Group) Inc(600080) about 66.8977 million shares held by Jinhua investment was successful.
According to the announcement before Ginwa Enterprise (Group) Inc(600080) , this part of the shares accounted for 17.92% of the total shares of the listed company and 93.63% of the total shares of the listed company held by Jinhua investment. All the above shares have been frozen by the judiciary.
According to the announcement on Ginwa Enterprise (Group) Inc(600080) January 13, on January 12, the Beijing Dongcheng District Court held that the application of Ningxia guanyue Investment Management Co., Ltd. for bankruptcy review of Jinhua investment met the legal provisions, and according to the provisions of the enterprise bankruptcy law of the people’s Republic of China and other regulations, It is decided to transfer the execution case of Jinhua investment as the executee to Shaanxi intermediate people’s Court (the original announcement, suspected as “Xi\’an Intermediate People’s court”) for bankruptcy review.
“If the bankruptcy acceptance time is before and the auction is after, the auction court needs to suspend the auction and transfer it after receiving the bankruptcy acceptance notice. However, if the acceptance notice is not delivered, the auction procedure is no problem.” Dou Fangxu, senior partner of jintiancheng law firm, said in an interview with Securities Daily.
auction twists and turns
Combing the relevant announcements of Ginwa Enterprise (Group) Inc(600080) , the equity auction can be said to be twists and turns.
The reason can be traced back to 2018. On February 11, 2018, Jinhua investment provided pledge guarantee with Ginwa Enterprise (Group) Inc(600080) about 66.8977 million shares of restricted tradable shares and applied to Tibet Trust Co., Ltd. (hereinafter referred to as “Tibet trust”) for a trust loan business of RMB 613 million with a loan term of three years.
In January 2021, after Tibet trust’s 613 million yuan loan expired, Jinhua investment failed to return in full on time. Tibet trust applied for Shanghai Oriental notary office to issue the execution certificate, and applied to Xi’an Intermediate Court for execution.
On June 18, 2021, Xi’an Intermediate Court announced that Jinhua investment will hold 66.8977 million shares of Ginwa Enterprise (Group) Inc(600080) by public auction from 10:00 on July 16 to 10:00 on July 17, 2021, accounting for 17.92% of the total shares of Ginwa Enterprise (Group) Inc(600080) . All these shares have been frozen by the judiciary.
However, Jinhua investment believed that there were defects in the execution of the people’s court’s online auction and raised an objection to the execution to Xi\’an Intermediate Court. Since then, Xi\’an Intermediate Court suspended the auction with “the outsider raised a justified objection to the auction property”.
After that, Xi\’an Intermediate Court announced again that the above shares would be auctioned again from 10:00 on August 21 to 10:00 on August 22, 2021. However, shortly after the announcement was issued, Xi\’an intermediate court withdrew the auction announcement again on the grounds that “two cases need to be handled together”.
On August 31, 2021, Ginwa Enterprise (Group) Inc(600080) received the notification letter from the controlling shareholder. Xi\’an Intermediate Court announced for the third time that it would publicly auction Ginwa Enterprise (Group) Inc(600080) shares held by Jinhua investment at 10:00 on September 30, 2021. However, one hour before the auction, Xi\’an Intermediate Court urgently stopped the auction on the grounds that “outsiders put forward justified objections to the auction property”.
Until December 6, 2021, Xi’an Intermediate Court announced that the above shares would be auctioned again from 10:00 on January 14 to 10:00 on January 15, 2022. On January 15, 2022, the shares were won by Wu Xinjin and Xiong Junyan of Jiangxi Xinyu Xingpeng Tongchuang enterprise management partnership (limited partnership), with the highest bid price of 534 million yuan.
farewell Ginwa Enterprise (Group) Inc(600080) or a foregone conclusion
“From the current situation, the Dongcheng District Court of Beijing made the ruling on January 12. Considering the actual delivery time, including the impact of epidemic and other factors, Xi\’an Intermediate People’s court is likely not to have received it. If this is the case, the auction procedure is legal.” Dou Fangxu said.
According to the announcement of Ginwa Enterprise (Group) Inc(600080) on January 13, as of the announcement date, Jinhua investment held 71447654 shares of the company’s non tradable shares, accounting for 19.14% of the total shares of the listed company, which have been fully pledged and waiting to be frozen.
This means that after the successful auction, there is little Ginwa Enterprise (Group) Inc(600080) held by Jinhua investment, and if the bankruptcy application is executed, the remaining equity will also be changed.
“After applying for bankruptcy enforcement, the equity, share capital and related rights and interests of the original shareholders in the company may change, and the existing assets and liabilities of the company should be recognized and distributed again.” Tong Tiehan, a finance and taxation expert and distinguished professor of the school of management of Xi\’an Jiaotong University, told the Securities Daily.
“According to the implementation provisions, the income after the equity auction shall be distributed to those who enjoy priority creditor’s rights first. If there is a balance after the distribution, the balance will be regarded as bankruptcy assets.” Dou Fangxu said.
This means that as the current controlling shareholder of Ginwa Enterprise (Group) Inc(600080) , Jinhua investment not only loses the controlling right of the listed company, but also may “bid farewell to” Ginwa Enterprise (Group) Inc(600080) .
Therefore, the actual controller of Ginwa Enterprise (Group) Inc(600080) may reveal the answer.
Since July 2020, after Xing boyue became the second shareholder of Ginwa Enterprise (Group) Inc(600080) through judicial auction, Xing boyue and his concerted actors have continuously increased their holdings through the secondary market, and the share proportion has already exceeded Jinhua investment. However, Xing boyue and his concerted actors have repeatedly claimed not to seek the control of listed companies in their announcements and in the inquiry replies of the exchange.
However, in the equity change report disclosed on Ginwa Enterprise (Group) Inc(600080) August 17, 2021, its statement has changed. It is announced that under the conditions of stable operation of the company, Jinhua investment is still the controlling shareholder of the listed company and Wu Yijian is still the actual controller of the listed company, Xing boyue and his concerted actors will not actively seek control of the listed company.
“The controlling shareholders of listed companies enter bankruptcy proceedings or their shares are auctioned, which means that the company may cause the controlling shareholders to lose equity or even control due to the change of shareholders.” Tong Tiehan said.
Now, with the successful auction of most of the shares of the controlling shareholders and the implementation of the bankruptcy review application, Jinhua investment may soon lose the controlling right of Ginwa Enterprise (Group) Inc(600080) . When the controlling shareholders and actual controllers of Ginwa Enterprise (Group) Inc(600080) change, according to the previous announcement, it will no longer be a breach of commitment for Xing boyue to obtain the control of the company.
