In Jiangsu and even the entire East China region, Jiangsu Yancheng Wildlife World (hereinafter referred to as "Yancheng Zoo") is well-known, this national 5A level tourist attraction, receiving millions of tourists every year. Compared with the scenery of Yancheng Zoo, the operator Jiangsu Yancheng Wildlife World Co., Ltd. (hereinafter referred to as "Yancheng Company") and the founder Xu Weiyong have not had a good life in recent years, and have been deeply involved in equity disputes.
In 2012, Yancheng Company, Xu Weiyong and Changzhou investor Wang Lijun signed the Investment Agreement, which provided a 95 million yuan entrusted loan to Yancheng Company through the bank for the construction of Yancheng Circus City project under Yancheng Company. This 95 million yuan is not a simple debt, Wang Lijun "can attack, retreat can be defended", entrusted loan period to collect fixed interest, after maturity can choose whether to convert into the equity of Yancheng Company. In the early stage of investment, both sides had a beautiful vision: Yancheng Company borrowed the Xiamen project to grow rapidly and seek listing!
However, contrary to expectations, the later cooperation between the two sides was not smooth! After the loan matured, Xu Weiyong and Yancheng Company worked hard to repay nearly 130 million yuan of principal and interest and announced the termination of the agreement between the two parties. However, Wang Lijun did not recognize Yancheng Company's unilateral repayment behavior and demanded a debt-to-equity swap. The two sides failed to negotiate many times, and Wang Lijun sued Xu Weiyong and Yancheng Company in a paper complaint, claiming to enjoy 89.59% of the equity of Yancheng Company.
This made Xu Weiyong unacceptable, and there were huge differences between the two sides on the valuation model. However, the Changzhou Intermediate People's Court accepted Wang Lijun's claims in both trials, and Xu Weiyong repeatedly lost the case, most likely losing control of Yancheng Company. At present, Xu Weiyong is still appealing, and the entanglement between the two sides has not yet been resolved.
Financing for listing
In 2012, Xu Weiyong, the founder of Yancheng Zoo, began to plan for listing.
At that time, Yancheng Zoo had been open to the public for 5 years and had become a well-known scenic spot in Jiangsu and even East China. "At that time, we had financing needs and we had the idea of going public." Xu Weiyong told the Securities Times reporter e company reporter that during the pre-listing counseling planning of the securities company, he met Zong Jun, who was working at bank of China International at the time, and then Zong Jun introduced him to The Changzhou investor Wang Lijun, and found Zhang Mingshu, a lawyer who works at Kangda Law Firm, "We hired Zhang Mingshu as the listing legal counsel to be responsible for the drafting of the investment agreement. ”
In September 2012, Yancheng Company, Xu Weiyong and Wang Lijun and other investors signed the "Investment Agreement", stipulating that Wang Lijun and other investors would provide an entrusted loan of 100 million yuan to Yancheng Gong through financial institutions, of which Wang Lijun invested 65 million yuan, with a term of 24 months and an annual interest rate of 12%. The above funds are mainly used by Yancheng Company to invest in the construction of the Xiamen Circus City project.
In November 2012, after the temporary withdrawal of some investors, the parties signed the Supplementary Investment Agreement, stipulating that Wang Lijun's investment amount would be increased to 95 million yuan. At that time, the agreement mentioned that the transfer time was before September 30, 2014, and the transfer price was 22 times the net profit achieved by Yancheng Company and the Xiamen Circus subsidiary project in the first half of 2014. Since then, Wang Lijun has provided entrusted loans totaling 95 million yuan to Yancheng Company in three installments through the account of Changzhou Taiping Communication Technology Co., Ltd. (hereinafter referred to as "Taiping Company") controlled by him.
Plans can't keep up with the changes. Due to the slow progress of land acquisition and demolition by the Government of Jimei District, Xiamen City, the Xiamen Circus City project has not been completed. Wang Lijun agreed to extend the entrusted loan for another six months after maturity, and the two sides signed the latest version of the Investment Agreement in 2014.
According to the 2014 edition of the Investment Agreement, investments are implemented in two phases:
The first stage is "entrusted loan", the investor provides a total of 95 million yuan of entrusted loans to Yancheng Company through financial institutions, with a maturity of 31 March 2015, with an annual interest rate of 12%; the second stage is "debt-to-equity", and the entrusted loan of 100 million yuan provided by the investor is converted into an equity investment in Yancheng Company before the maturity date of the transfer date.
The 2014 edition of the Investment Agreement on the transfer price is consistent with the 2012 Supplementary Investment Agreement, that is, 22 times the net profit achieved in the first half of the year of Changzhou Wildlife World and Xiamen Circus City projects in the first half of 2014 as the transfer price, "if the soft opening and formal operation of the Xiamen Circus City Circus Project as of June 30, 2014 have accumulated less than 6 months, the net profit achieved in the first half of the Xiamen Circus City Project is calculated by 2 times the net profit achieved in the 3 months of the official operation of the Xiamen Circus Project." ”
The struggle between debt-for-equity swaps and repayment of money
As of March 31, 2015, the due date of the entrusted loan transfer, in addition to the circus venues in xiamen Circus City, hotels, commercial streets, museums, zoos, etc., have not started or completed construction. At this time, Xu Weiyong has fallen into a dilemma: the project construction and operation is still in urgent need of money, but Wang Lijun is no longer willing to extend the period.
On March 16, 2015, Yancheng Company received a written reminder from Bank of Jiangsu Changzhou Branch for the first time. The evidence obtained by the securities times and e company reporters shows that on March 16, March 17, and April 4, 2015, after three loans totaling 95 million yuan were due, the Bank of Jiangsu notified Yancheng Company in writing three times that the loans were overdue, asking Yancheng Company to "seize the financing and repay them as soon as possible" and "reduce the overdue loans as soon as possible or return all the loans to eliminate bad records".
On April 17, 2015, Yancheng Company and Wang Lijun held talks, and the minutes of the meeting showed that Yancheng Company and Wang Lijun both agreed to the debt-to-equity swap, and Yancheng Company will actively promote the debt-to-equity swap.
Since then, the valuation model given by Yancheng Company is: the net profit of Yancheng Zoo in the first half of 2014 is 26.25 million yuan, the net profit of the Xiamen Circus City project that has not yet been officially opened is 100 million yuan, multiplied by 22 times is 2.778 billion yuan, and the corresponding shareholding ratio of Wang Lijun's 95 million yuan is 3.42%.
On May 27, 2015, Wang Lijun sent a letter to Yancheng Company, disagreeing with the valuation model given by Yancheng Company, and pointed out that when investing in Yancheng Company in 2012, Yancheng Company expected the net profit of Xiamen Circus Project to be 50 million yuan in the first half of 2014 and 15 million yuan in Yancheng Zoo, calculating the equity ratio after the conversion of shares to 6.64%.
On June 1, 2015, Yancheng Company wrote to Wang Lijun saying that the other party insisted on using the unfulfilled conditions for the transfer of shares in the investment agreement as the basis for the negotiations, which made the problem-solving negotiations lose the basic premise. Yancheng Company also mentioned that because the other party did not extend the entrusted loan as agreed in the agreement after the entrusted loan expired, Yancheng Company caused a bad credit record in the bank credit report, making it impossible for the company to carry out normal credit and borrowing in the bank, "which made the originally relatively tight capital chain worse, making the company unable to operate normally, and the expectation of the IPO became a failure." ”
It was also in this context that the Yancheng Zoo, which was in hot business at that time, even once spread rumors of closure.
On July 11, 2015, Wang Lijun issued a Notice letter on Termination of Entrusted Loans and Debt-to-Equity Swaps to Yancheng Company and Xu Weiyong, requesting Yancheng Company to handle the relevant procedures for converting creditor's rights into equity in accordance with the agreement. However, Xu Weiyong said that Wang Lijun proposed a debt-to-equity swap on the one hand, and on the other hand, he asked for repayment, "In the case of being urged by the bank to repay the loan many times, we had to borrow money and return the principal and interest to him in One Lump Sum in July." The evidence obtained by the reporter shows that as of July 16, 2015, the bank has deducted the principal and interest of the loan of 95 million yuan, and the interest and penalty interest paid by Yancheng Company are 32.5902 million yuan.
On July 17, 2015, Wang Lijun again sent a letter saying that he hoped that Yancheng Company and Xu Weiyong would contact the bank to return the money that had been remitted. Yancheng Company sent a letter to Taiping Company and Wang Lijun on the same day, emphasizing that the loan had been fully repaid on July 16, and the three investment agreements were terminated accordingly, "Yancheng Company no longer accepts any loan from you, nor has the intention to accept investment, if you have any money to the Account of Yancheng Company, it is regarded as unowned property and charges a daily storage fee of one thousandth." ”
Equity battles
After the Bank of Jiangsu withheld the principal and interest of the 95 million yuan loan, Wang Lijun filed a civil lawsuit with the Changzhou Intermediate Court on July 27, 2015, claiming to enjoy 89.59% of the equity of Yancheng Company and taking a series of measures such as preserving the assets of Yancheng Company.
● Wang Lijun believes that according to the financial report published by the "National Enterprise Credit Information Publicity System", the net profit of Yancheng Company in 2014 was 25.64 million yuan, and the net profit in the first half of 2014 was half of it, which was 12.82 million yuan. The Xiamen Circus City project began to sell tickets and perform performances on May 1, 2014, and was less than 6 months old as of June 30, 2014, so the net profit achieved in the first half of 2014 should be calculated as "2 times the net profit achieved in the three months of the official operation of the Xiamen Circus City project", that is, through the net profit from May to July 2014, the net profit achieved in the first half of the year was -8 million yuan. According to the agreement, the transfer price is: (12.82 million yuan - 8 million yuan) ×22 = 106.04 million yuan. Wang Lijun's investment of 95 million yuan corresponds to the shareholding ratio of 89.59%.
Curiously, Zhang Mingshu, the legal adviser of Yancheng Company when it planned to go public, suddenly became Wang Lijun's litigation agent at this time. "He helped me draft an investment agreement and then sued me on behalf of the other side, which was contrary to the professional ethics of a lawyer." Xu Weiyong said that after Yancheng Company complained to the competent authorities, the other party replaced Zhang Mingshu.
A judgment obtained by a reporter from Securities Times E Company shows that Yancheng Company submitted two emails to prove that Zong Jun and Zhang Mingshu participated in the provision and revision of the 2012 Investment Agreement and the amendment of the 2012 Supplementary Investment Agreement. The first model of the 2012 Investment Agreement was provided by Zhang Mingshu and revised by Zong Jun. The second Supplementary Investment Agreement was amended by Zong Jun and Zhang Mingshu.
The judgment also shows that Wang Lijun has no objection to the authenticity of the evidence, and believes that "Zhang Mingshu did provide a model of the first contract and prepared to act as legal counsel for the listing of Yancheng Company, but in the end did not sign a contract with Yancheng Company." ”
It is worth noting that Zong Jun, as the introducer of the cooperation between Yancheng Company and Wang Lijun, became an important witness in the equity dispute between the two sides and made testimony favorable to Wang Lijun. In response to the question about valuation at the trial, Zong Jun said: The original intention of the contract was that the Yancheng Company and the Xiamen Circus City project, regardless of whether the profit was positive or negative, respectively, must go through the final number of the sum of the two, and the party was the amount of net profit agreed in the contract to calculate the net profit of the stock price.
The "China Dinosaur Park", also located in Changzhou, has also planned to go public. According to the prospectus (draft filing) disclosed in December 2017, Tianjin Hongyicheng Science and Technology Development Partnership (Limited Partnership) is the second largest shareholder of China Dinosaur Park. According to the data of Tianyancha, the partners of Hongyi Cheng Technology are Zhang Weijie and Wang Jingyuan. Among them, Zhang Weijie is the vice president of Taiping Company, and Wang Jingyuan is the daughter of Wang Lijun. The director nominated by Hony Cheng Technology to the Dinosaur Park is Zong Jun.
Xu Weiyong also said at the trial that Zong Jun and Wang Lijun are closely related, so his testimony is extremely low in proof, "using Zong Jun's testimony as the main evidence to prove that the other three items other than the circus performance (indoor) are not included in the important fact that the profit basis for determining the transfer price is a major flaw." ”
After trial, the Changzhou Intermediate People's Court held that Yancheng Company unilaterally returned the principal and interest of the loan of 95 million yuan to Taiping Company without Wang Lijun's consent and under the condition that Wang Lijun insisted on debt-to-equity swap, so while the effective judgment in this case confirmed that Wang Lijun had the status of a shareholder of Yancheng Company, Wang Lijun should return it to Yancheng Company. The Changzhou Intermediate People's Court also supported Wang Lijun's claim that Yancheng Company and Xu Weiyong confirm that they held 89.59% of Yancheng's equity.
On August 15, 2017, the Changzhou Intermediate People's Court rendered a first-instance judgment: the defendant Yancheng Company and Xu Weiyong continued to perform the Investment Agreement signed in 2014 and performed the obligation of debt-to-equity conversion; the plaintiff Wang Lijun returned the capital increase of 95 million yuan to Yancheng Company within 15 days from the effective date of the judgment, and enjoyed 89.59% of the equity of Yancheng Company from March 31, 2015, if Wang Lijun did not return the above amount within the time limit, it was deemed that Wang Lijun gave up the transfer of equity; Yancheng Company, Xu Weiyong cooperated with Wang Lijun to complete the debt-to-equity swap procedure within 15 days from the date on which Wang Lijun's 95 million yuan capital increase was returned to Yancheng Company; wang Lijun's other litigation claims were rejected.
Both Yancheng Company and Xu Weiyong appealed to the Jiangsu Provincial High Court, which was subsequently remanded for retrial. The Changzhou Intermediate People's Court accepted the case on April 3, 2019. On July 26, 2021, the Changzhou Intermediate People's Court again ruled in the first instance, still ruling that Wang Lijun would enjoy 89.59% of the equity of Yancheng Company. Yancheng Company was not satisfied with the judgment and appealed again on August 6 this year. The lawsuits between the two sides have been tried several times, and the entanglement has not been resolved so far.
The latest responses from the parties involved
It is worth noting that during the period when Wang Lijun filed a lawsuit to claim 89.59% of the equity, the Taiping Company under his control transferred the 95 million yuan retained in the entrusted loan account in two installments on October 21 and October 28, 2015. Xu Weiyong questioned accordingly, "He has transferred the money and used it, why should he sue us for equity?" At the same time, he said that he could not understand, "Wang Lijun borrowed 95 million yuan, while obtaining an annual interest rate of 12% totaling more than 30 million yuan, how can he obtain high-quality scenic spots worth more than one billion yuan or even billions of yuan?" ”
The reporter of Securities Times E Company noted that during the trial, Wang Lijun held that the agreement under this case is a private equity investment contract, the purpose of which is to give the investor the right to choose to convert the debt into equity at a certain point in time. In this case, since the outcome of the VAM was unfavorable to the financier, the various remarks made by the defendant on the Internet also confirmed the true meaning of the two parties to sign the private equity investment contract, "First, the purpose of the contract is private equity investment, and the other is to include the VAM mechanism." Lack of experience and lack of understanding of how capital markets operate cannot be used as a justification for non-performance of contracts. ”
Wang Lijun stressed that it was the plaintiff's 95 million yuan to pay the first purchase price for the Xiamen Circus City project, and the defendant obtained the first land for the Xiamen Circus City project, and then mortgaged the land, obtained a bank loan, and rolled forward, so that it was possible to promote the Xiamen Circus City project to today's level, "However, after the defendant saw that the Xiamen Circus City project had today's scale and value, it was unwilling to transfer shares to the plaintiff according to the agreed proportion at that time, which was the cause of this case, and the defendant lacked integrity. ”
In response to the equity entanglement between the two sides, the reporter of the Securities Times E Company called Wang Lijun for an interview. "Xu Weiyong talked a lot, he felt that he was wronged, he felt that it was my fault." Wang Lijun said that the two sides not only signed an agreement, but also had many correspondence, "The repayment is his own repayment, and this matter between us and the bank collection are two different things." ”
Wang Lijun denied Xu Weiyong's claim that Wang Lijun, Zong Jun, and Zhang Mingshu had "set up a bureau", "I simply can't set up a bureau, I took 95 million yuan and gave him three years, he developed, and said I set up a bureau? Wang Lijun stressed that Xu Weiyong's words are all one-sided words, "I believe that people are doing the sky to see, and I believe that black is not white." ”
After that, the reporter called Zong Jun and Zhang Mingshu separately, hoping to conduct interviews on topics such as the drafting process of the Investment Agreement. Zhang Mingshu responded on the phone, "This matter (time) is too long, I can't remember, you find the person." Then he hung up the phone. Another key figure, Zong Jun, never answered the phone or replied to the reporter's interview text message.
The performance of operating projects has declined due to the epidemic
The equity dispute has not been resolved, and the core assets competed by the two parties are currently operating?
At present, Yancheng Company mainly has two major operating entities: Yancheng Zoo and Xiamen Lingling International Circus City. Among them, Xiamen Lingling International Circus City was promoted as the world's first and the world's largest international circus tourism complex. According to the introduction of the official website, the project covers an area of 350 acres, with a total investment of 1.8 billion yuan, mainly composed of Lingling International Circus Theater, Lingling Animal Kingdom, Lingling Hotel and other parts.
The securities times and e company reporter noted that the court judgment showed that the Xiamen Circus City project began to sell tickets and perform performances since May 1, 2014, and calculated the net profit of Xiamen Circus City in the first half of 2014. According to local media reports in Xiamen, in July 2016, Xiamen Lingling International Circus City was officially opened. At that time, the report said, "After half a year of renovation and expansion, Xiamen Lingling Circus Cultural Tourism Resort has gradually developed and improved from a single Xiamen Lingling Grand Theater viewing experience to a diversified tourism system structure, and Xiamen Lingling Animal Kingdom has officially met with the general public and tourists in Xiamen." ”
Xu Weiyong told reporters, "In 2014, in order to attract tourists, it was briefly opened to make up for the loss. The Xiamen Circus City project should actually be officially opened in 2018, that is, the hotel, circus and business are all opened. ”
According to the operating data provided by Yancheng Company, in 2019, Xiamen Lingling International Circus City achieved operating income of 154 million yuan and profit of park and hotel -5.53 million yuan. However, after 2020, due to the impact of the epidemic, the operating income fell to 109 million yuan, and the profit of the park and hotel was -29 million yuan. From January to October 2021, it was still trapped by the epidemic, achieving operating income of 89.41 million yuan and profit of the park and hotel - 13.95 million yuan.
●The operation of Yancheng Zoo has been relatively stable. The operating data provided by Yancheng Company shows that in 2019, Yancheng Zoo received 1.95 million tourists, achieved operating income of 164 million yuan and profit of 91.66 million yuan. Since 2020, due to the impact of the epidemic, the performance has declined significantly. Among them, in 2020, it received 918,000 tourists, achieved operating income of 78.4 million yuan, and realized profit of 23.78 million yuan. From January to October 2021, it received 921,300 tourists, achieving operating income of 94.04 million yuan and profit of -11.4 million yuan. Xu Weiyong said that the performance of Yancheng Zoo this year was mainly affected by the epidemic in Nanjing and Yangzhou, "the loss is relatively large, but it should be able to ensure that there is no loss throughout the year." ”
"The investment was introduced in that year for the development of the company, but also for the sake of listing. I didn't expect such a big problem, which was my biggest mistake. Xu Weiyong said. How to resolve this equity dispute that has lasted for several years, reporters will continue to pay attention to.