Securities code: 002656 securities abbreviation: Modern Avenue Group Co.Ltd(002656) Announcement No.: 2022-004 Modern Avenue Group Co.Ltd(002656)
Announcement on the receipt of the decision on administrative punishment by the company and relevant parties
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
1、 Basic information
Modern Avenue Group Co.Ltd(002656) (hereinafter referred to as "the company") received the investigation notice of China Securities Regulatory Commission (Yue Cha Zi No. 20006) on March 31, 2020. Because the company is suspected of violating laws and regulations in information disclosure, the China Securities Regulatory Commission decided to file a case for investigation in accordance with the relevant provisions of the securities law of the people's Republic of China. For details, see the announcement on receiving the notice of filing investigation (Announcement No.: 2020-028) disclosed by the company in the designated information disclosure media on April 1, 2020. On December 3, 2021, the company and relevant parties received the advance notice of administrative punishment (Guangdong Zhengjian Zhengjian Zhengzhen Zi [2021] No. 21) issued by Guangdong regulatory bureau of China Securities Regulatory Commission.
On January 17, 2022, the company and relevant parties received the decision on administrative punishment ([2022] No. 1) issued by Guangdong regulatory bureau of China Securities Regulatory Commission.
2、 Contents of prior notice of administrative punishment
Party: Modern Avenue Group Co.Ltd(002656) (hereinafter referred to as modern Avenue), domicile: Huangpu District, Guangzhou City, Guangdong Province.
Lin Yongfei, male, born in October 1968, was the chairman of modern Avenue and Acting Secretary of the board of directors. His address is Conghua District, Guangzhou City, Guangdong Province.
Weng Wuqiang, male, born in December 1975, was the director and general manager of modern Avenue. His address is Sanshan Town, Fuqing City, Fujian Province.
Liu Wenyan, female, born in March 1972, was the financial director and director of modern Avenue, and her address is Yuexiu District, Guangzhou City, Guangdong Province.
In accordance with the relevant provisions of the securities law of the people's Republic of China (hereinafter referred to as the securities law of 2005) amended in 2005 and 2014, our bureau has filed a case for investigation and trial of the illegal acts of information disclosure on modern Avenue, and informed the parties of the facts, reasons and basis of administrative punishment and the rights enjoyed by the parties according to law. The party concerned requests to state, defend and hold a hearing; Liu Wenyan, the party concerned, asked for a statement and defense, but did not apply for a hearing; The other parties did not request a statement, defense or hearing. At the request of the party modern Avenue, our bureau held a hearing and heard the statement and defense of the agent of modern Avenue. The investigation and trial of this case have been concluded.
After investigation, the main facts about the parties' violation of the law are as follows:
1、 The external guarantee is not disclosed in time, and there are major omissions in the disclosure of relevant information in periodic reports
From April 2018 to January 2019, modern Avenue failed to perform the approval procedures as required and provided joint and several guarantees for Lin Yongfei and other related parties in the name of listed companies or subsidiaries. Among them, the amount of illegal external guarantee in the first half of 2018 totaled 219.285 million yuan, accounting for 9.28% of the latest audited net assets; In 2018, the total amount of illegal external guarantee was 319.285 million yuan, accounting for 13.41% of the audited net assets of the current period; In the first half of 2019, the total amount of illegal external guarantee was 469.285 million yuan, accounting for 19.7% of the latest audited net assets.
According to the provisions of item 17, paragraph 2, Article 30 of the measures for the administration of information disclosure of listed companies (Order No. 40 of the CSRC), and with reference to the requirements of 9.11 of the stock listing rules of Shenzhen Stock Exchange, the listed company shall timely disclose the matters providing external guarantees. Modern Avenue did not disclose the major event in time.
According to Item 2 of Article 41 of the standards for the contents and forms of information disclosure by companies offering securities to the public No. 2 - Contents and forms of annual reports (CSRC announcement [2017] No. 17), According to paragraph 2 of Article 39 of the standards for the contents and forms of information disclosure by companies offering securities to the public No. 3 - Contents and forms of semi annual reports (CSRC announcement [2017] No. 18), listed companies shall disclose the provision of major guarantees in their periodic reports. The 2018 semi annual report and 2018 annual report of modern Avenue did not disclose the external guarantee as required. The 2019 semi annual report only disclosed two guarantees, involving a total guarantee amount of RMB 200 million, did not disclose the remaining three guarantees, and there were major omissions in the relevant periodic reports.
2、 Related party transactions of non operating funds occupied by the controlling shareholder are not disclosed in the periodic report
From December 2018 to August 2019, without decision-making approval or authorization procedures, modern Avenue provided the controlling shareholder Guangzhou Ruifeng Group Co., Ltd. (hereinafter referred to as Ruifeng group) with non operating funds of about 246912100 yuan in the form of prepayment, investment prepayment, project prepayment and cash mixed management through accounts of suppliers and franchisees, It is used to repay loans, loans or investments to its subsidiaries, other equity investments, and pay daily expenses or wages of Ruifeng group.
By the end of 2018, the non operating funds occupied by related parties on modern Avenue totaled 150.9983 million yuan, accounting for 6.34% of the audited net assets of the current period; By the end of June 2019, the non operating funds occupied by related parties on modern Avenue totaled 243791000 yuan, accounting for 10.24% of the latest audited net assets. In accordance with the provisions of Articles 31 and 40 of the standards for the contents and forms of information disclosure by companies offering securities to the public No. 2 - Contents and forms of annual reports (CSRC announcement [2017] No. 17), In accordance with Article 38 of the standards for the contents and forms of information disclosure by companies offering securities to the public No. 3 - Contents and forms of semi annual reports (CSRC announcement [2017] No. 18), a listed company shall disclose the related party transactions of non operating funds occupied by related parties in its periodic reports. The 2018 annual report and 2019 semi annual report of modern Avenue did not disclose the related party transactions of non operating funds occupied by the above related parties, and there were major omissions.
3、 Performance of directors, supervisors and senior managers
As the then chairman of modern Avenue, Lin Yongfei acted as the Secretary of the board of directors and was fully responsible for the operation, management and information disclosure of modern Avenue. Lin Yongfei organized relevant personnel to provide external guarantees in the name of modern Avenue and its subsidiaries, and organized and arranged relevant personnel to transfer the funds of the listed company to the controlling shareholders to form the occupation of non operating funds. He did not disclose the provision of external guarantees in time as required, nor disclosed the above-mentioned relevant information in the regular reports as required, and signed to guarantee the 2018 semi annual report, 2018 annual report The 2019 semi annual report is true, accurate and complete.
In addition to committing illegal acts based on the above identity, Lin Yongfei, as the actual controller, instructs to engage in illegal acts of information disclosure.
Weng Wuqiang, as the then director and general manager of modern Avenue, presided over the operation and management of the company and organized the implementation of the resolutions of the board of directors. Weng Wuqiang failed to perform his duties in accordance with the company's regulations, arranged payment approval for a number of funds that did not sign contracts according to Lin Yongfei's instructions, did not follow up the actual use of funds, and did not take measures to regularly clean up and supervise the collection of receivables, resulting in the company's funds being occupied by the controlling shareholders. Weng Wuqiang signed to ensure that the 2018 annual report and the 2019 semi annual report are true, accurate and complete.
Liu Wenyan, as the then chief financial officer and director of modern Avenue, was in charge of the company's financial management. Liu Wenyan failed to perform his duties in accordance with the company's regulations and arranged the payment approval of multiple funds according to Lin Yongfei's instructions. Subsequently, he did not follow up the actual use of funds, nor did he take measures to regularly clean up and supervise the collection of accounts receivable, understand the progress of contract performance, and was aware of the mixed cash management of modern Avenue and Ruifeng group, As a result, the company's funds are occupied by the controlling shareholders. Liu Wenyan signed to ensure that the 2018 annual report and the 2019 semi annual report are true, accurate and complete.
The above illegal facts are proved by relevant company announcements, capital flow of relevant bank accounts, bookkeeping vouchers and original vouchers, situation descriptions, inquiry records and other evidence.
We believe that modern Avenue failed to disclose the related party transactions of external guarantee and non operational occupation of funds by controlling shareholders as required, resulting in major omissions in relevant periodic reports, which is suspected of violating the provisions of articles 63 and 67 of the securities law of 2005, constituting the illegal situation described in paragraph 1 of Article 193 of the securities law of 2005, Lin Yongfei is directly in charge and Weng Wuqiang and Liu Wenyan are directly responsible. Lin Yongfei, the actual controller, instructs to engage in the above-mentioned acts, which constitutes an illegal situation described in paragraph 3 of Article 193 of the securities law of 2005.
The party concerned, modern Avenue, made the following statements and pleadings and requested mitigation of punishment: first, the company did not have subjective intent and illegal conspiracy, and the illegal disclosure of relevant information was caused by Lin Yongfei's personal behavior; Second, after the company became aware of the information disclosure violations involved in the case, it corrected and disclosed these matters, impacts and risks at the first time, and then actively and comprehensively cooperated with the investigation. There was no situation of concealing or interfering with or hindering the investigation, and actively took remedial and corrective measures for rectification, tried its best to reduce the impact on the company, and achieved certain results.
Liu Wenyan, the party concerned, made the following written statements and defense opinions, requesting exemption or mitigation of administrative punishment: first, for the illegal guarantee, he has not yet served as the chief financial officer or director, and the illegal guarantee is an ultra vires act carried out by Lin Yongfei. He did not participate in, did not know or could not know the illegal guarantee, and is not responsible for this act; Second, only part of the non operating fund occupation occurred during his term of office, and the matter was highly hidden. His term of office was short, so it was difficult to understand the specific progress of each business and the essence of the illegal occupation of funds by the controlling shareholders. The rectification of the mixed cash management problem had been organized and completed, and he was not responsible for the behavior; Third, the proportion of funds occupied during his tenure is low, which only plays a secondary role in fund occupation matters, and the organizers, planners, implementers or direct participants of non related matters are severely punished.
After review, our bureau believes that the statements and arguments of the parties are untenable and will not accept them. First, although Lin Yongfei directly organized and directed the decision-making and implementation of illegal guarantee and non operating fund occupation of modern Avenue, modern Avenue, as an information disclosure obligor, did not take necessary and effective control measures, resulting in inaccurate information disclosure and negligence. When determining the punishment range, our bureau has fully considered the subjective state of modern Avenue, the size of fault, the degree of participation, the degree of cooperation in investigation and other factors, which is in line with the principle of excessive punishment. Second, our bureau did not identify Liu Wenyan as the person responsible for the illegal guarantee, but as the chief financial officer and director of modern Avenue, he was responsible for preparing the company's financial statements and in charge of the company's financial management. He failed to pay necessary attention to the actual use of funds after approval and the performance of contract signing and approval, and signed on the financial statements to ensure the authenticity of periodic reports It is accurate and complete, and its opinions on ignorance and non participation cannot be used as an exemption for failure to perform duties diligently. When determining the degree of punishment, our bureau has comprehensively considered its participation in the case, performance of duties and other factors, which is in line with the principle of excessive punishment.
In conclusion, according to the facts, nature, circumstances and degree of social harm of the illegal acts of the parties, and in accordance with the provisions of paragraphs 1 and 3 of Article 193 of the securities law of 2005, our bureau decides:
1、 Give a warning to Modern Avenue Group Co.Ltd(002656) and impose a fine of 400000 yuan; 2、 Lin Yongfei shall be given a warning and fined 600000 yuan, including 200000 yuan as the person in charge directly responsible and 400000 yuan as the actual controller;
3、 Weng Wuqiang and Liu Wenyan were warned and fined 150000 yuan.
The above-mentioned party shall remit the fine to the Bank of deposit of China Securities Regulatory Commission within 15 days from the date of receiving the punishment decision, which shall directly turn it over to the state treasury, and send the copy of the payment voucher marked with the name of the party to our bureau for the record. If a party refuses to accept the punishment decision, he may apply to the China Securities Regulatory Commission for administrative reconsideration within 60 days from the date of receiving the punishment decision, or directly bring an administrative lawsuit to the people's court with jurisdiction within 6 months from the date of receiving the punishment decision. During the period of reconsideration and litigation, the implementation of the above decision shall not be suspended.
3、 Impact on the company and risk tips
1. As of the disclosure date of this announcement, the company's production and operation are normal. According to the determination of the decision on administrative punishment, the company judges that the violations involved in the decision on administrative punishment received this time do not touch the major illegal forced delisting specified in articles 9.5.1, 9.5.2 and 9.5.3 of the Listing Rules of Shenzhen Stock Exchange (revised in 2022).
2. The information disclosure media designated by the company are China Securities Journal, securities times, securities daily and cninfo（ http://www.cn.info.com.cn. ）, the relevant information of the company shall be subject to the announcement published on the above designated information disclosure media. Please pay attention to the relevant announcements of the company, make rational investment and pay attention to investment risks.
It is hereby announced.
Modern Avenue Group Co.Ltd(002656) board of directors January 18, 2022
