Disclosure violations are sued by natural persons, plus food: do not bear financial compensation

On December 7, Jia Jia Food issued an announcement that in the second instance of the case of natural person Chen Yeming v Jia Jia Food Securities Misrepresentation Liability Dispute, the Hunan Provincial Higher People's Court rejected Chen Yeming's appeal and upheld the judgment result of the original judgment. Moreover, Jiajia Food does not bear any financial liability in this case. Previously, Jiajia Food had been administratively punished by the CSRC for illegal disclosure.

It is understood that on October 27, 2020, Jia Jia Food disclosed that Chen Yeming, a natural person, filed a lawsuit with the Intermediate People's Court of Changsha City, Hunan Province, regarding the dispute over the misrepresentation liability of Jia Jia Food Securities, and listed Hunan Excellence Investment Co., Ltd., Yang Zhen, Yang Zijiang, Duan Weiwei, Liu Yongjiao, Peng Jie, and Wang Yanwu as defendants two to eight in turn. Chen Yeming requested an order: Jiajia Food compensated the plaintiff for investment difference losses, commission losses, stamp duty losses and interest totaling 1,1217,699.74 yuan; requested that defendants two to eight be ordered to bear joint and several liquidation liability for the above compensation of Jiajia Food; and the litigation costs of the case were jointly borne by the defendants.

On April 12, 2021, Jiajia Food received the (2020) Xiang 01 Min Chu No. 1810 Civil Judgment rendered by the Changsha Intermediate Court on April 2, 2021, and the Changsha Intermediate Court ruled to reject all the plaintiff's litigation claims, and the case acceptance fee was borne by the plaintiff. On May 24, 2021, Jiajia Food received the Civil Appeal Letter served by the Changsha Intermediate Court. Chen Yeming, a natural person, appealed to the Hunan Provincial Higher People's Court against the first-instance judgment made by the Changsha Intermediate People's Court in a dispute over the company's securities misrepresentation liability.

The (2021) Xiang min zhong No. 910 Civil Judgment rendered by the Higher People's Court of Hunan Province on November 30, 2021, in accordance with the first paragraph of article 170 of the Civil Procedure Law of the People's Republic of China, rendered the following judgment: the appeal is rejected and the original judgment is upheld. The acceptance fee of the second-instance case is 46,864.84 yuan, which is borne by Chen Yeming. The verdict is final.

As for the impact of the incident, JiaJia Food said that in this case, Jia Jia Food did not bear any economic compensation liability, nor did it need to bear the case acceptance fee and other related expenses, which had no impact on the profit of the current period or the profit after the period.

It is worth noting that the natural persons Shen Yangzhong, Xia Zhengbiao, Zhou Mingqiang and Chen Bingzhou also filed a lawsuit against Jiajia Food and Hunan Excellence Investment Co., Ltd. for misrepresentation of jiajia food securities. The four-person lawsuit demanded that the defendant be ordered to compensate the plaintiff for various economic losses, including investment difference losses, commission losses, stamp duty losses and interest losses totaling 121,961.76 yuan.

Shen Meng, executive director of Chanson Capital, believes that the liability for securities misrepresentation generally refers to the information disclosure violations of listed companies, suspected financial fraud, false information and so on.

It is understood that Jiajia Food has been subject to administrative penalties for violating laws and regulations on information disclosure.

On April 28, 2018, Jiajia Food issued the Indicative Announcement on the Company's Illegal Issuance of Commercial Papers, External Guarantees, Capital Occupation, etc., which includes the Company's illegal issuance of commercial acceptance drafts, the matters of illegal external guarantees and the occupation of the Company's funds. On June 6, 2019, Jiajia Food issued an announcement that due to the company's suspected violation of laws and regulations on information disclosure, in accordance with the relevant provisions of the Securities Law of the People's Republic of China, the China Securities Regulatory Commission decided to file a case investigation against the company.

The results of the investigation were released, and the CSRC imposed an administrative penalty on Jiajia. On February 12, 2020, Jiajia Food issued an announcement that it had received the Administrative Penalty Decision from the Hunan Regulatory Bureau of the China Securities Regulatory Commission: Jiajia Food and its controlling shareholder, Hunan Excellence, and related parties had failed to disclose the non-operating capital occupation of the controlling shareholder in a timely manner, failed to disclose the transactions with related parties of the controlling shareholder in accordance with the regulations, and failed to disclose the provision of guarantees for the controlling shareholder in a timely manner. The Hunan Securities Regulatory Bureau decided to give Jiajia Food a warning and impose a fine of 400,000 yuan. The controlling shareholder, Hunan Excellence, was given a warning and fined 400,000 yuan; Yang Zhen, the chairman of Jiajia Food at the time, was given a warning and fined 200,000 yuan.

This article originated from Blue Whale Finance