outburst! Gree Electric Supervisors reduced their holdings in violation of the law and supervised the operation

Source: China Fund News

On the evening of January 18, Gree Electric Appliance announced that due to the illegal reduction of supervisor Duan Xiufeng, it received a regulatory letter from the Shenzhen Stock Exchange.

According to the regulatory letter, on December 27, 2021, Duan Xiufeng reduced his holdings by 149,200 shares, reaching the upper limit of 25% of his shares per year, but did not disclose the reduction plan 15 trading days in advance as required, and the cash amount was 5.4568 million yuan. Gree Electric Appliances fell by 40% in 2021, and looking back, Duan Xiufeng sold at a low point. In the past 2019 and 2020, Duan Xiufeng also stepped on the upper limit of regulatory regulations to reduce holdings.

This is not the first time that the directors and supervisors of Gree Electric Appliances have reduced their holdings in violation of the law, in July 2017, The director of Gree Electric Appliances Xu Spontaneously bought the company's shares and sold them in less than 6 months, cashing out more than 13 million yuan, constituting a violation of short-term trading, and the income generated was 2.83 million yuan that was collected by the company according to regulations. Xu spontaneously received a regulatory warning letter from the Shenzhen Stock Exchange for this purpose, and Xu spontaneously resigned three months later.

Supervisors reduced their holdings at a low level in violation of regulations

According to the announcement, Duan Xiufeng, as a supervisor of Gree Electric Appliances, reduced his holdings in a total of 149175 shares through centralized bidding on December 27, 2021, accounting for 0.0025% of the company's total share capital, involving an amount of 5.4568 million yuan. Duan Xiufeng did not pre-disclose the reduction plan in the fifteen trading days before the reduction.

Duan Xiufeng's above conduct violated Articles 1.4 and 3.1.8 of the Rules Governing the Listing of Stocks (2020 Revision) of the Shenzhen Stock Exchange, Articles 1.2 and 3.8.1 of the Guidelines for the Standardized Operation of Listed Companies (Revised in 2020), and Article 13 of the Detailed Rules for the Implementation of the Reduction of Shares by Shareholders, Directors, Supervisors and Senior Management of Listed Companies. To this end, the Shenzhen Stock Exchange issued a regulatory letter to it.

According to the 2021 semi-annual report of Gree Electric Appliances, The 149,100 shares that Duan Xiufeng reduced this time were locked shares by executives, and they immediately cashed out just after being lifted, and just stepped on the upper limit of 25% of the shares held by the regulator every year. According to data from the Shenzhen Stock Exchange, Duan Xiufeng also reduced his holdings in 2019 and 2020 under the pressure of the regulatory ceiling.

In hindsight, Duan Xiufeng's reduction was actually sold at a low level, and the average price of his reduction was only 36.57 yuan per share, which was basically the low price of Gree Electric Appliances in the past three years. In the past 2021, despite spending tens of billions of yuan to buy back, the stock price of Gree Electric Appliances still fell and fell endlessly, falling by 40% throughout the year, and even the shares pledged by the largest shareholder, Hillhouse Capital, had a "margin call".

According to public information, Duan Xiufeng, 58 years old, graduated from The Party School of Shandong in 1999, and has served as deputy general manager and general manager of Shandong Gree Marketing Co., Ltd., general manager of Shandong Shengshi Xinxing Gree Trading Co., Ltd., and has been a supervisor of the company since January 2019.

Due to the high popularity of Gree Electric Appliances and the relatively large number of shareholders, the punishment has been discussed by netizens. Some say, "No fines?" "Knowingly committing a crime, it must be punished", some said that "the 37 yuan reduction is a manifestation of the lack of confidence of insiders in the company.".

As of the third quarter of 2021, Gree Electric Appliances has 887,900 shareholders, ranking 8th among more than 4,700 companies in the two cities.

Directors have also illegally reduced their holdings

Resigned after being punished by supervision

This is not the first time that Gree Electric Appliances has experienced a reduction in illegal holdings by directors and supervisors.

In July 2017, Gree Electric Appliances also received a decision on administrative supervision measures from the Shenzhen Stock Exchange, showing that the company's then-director Xu spontaneously bought shares and sold them illegally, making a profit of nearly 3 million yuan.

Specifically, Xu Has served as a director of Gree Electric Appliances since June 2015. On November 24, 2016, it purchased 575,300 shares of Gree Electric Appliances through the centralized auction transaction of the exchange, with an average transaction price of 26.39 yuan per share and a transaction amount of 15.1822 million yuan. On May 22, 2017, it once again sold 400825 shares of Gree Electric Appliances through the centralized auction transaction of the exchange, with an average transaction price of 33.45 yuan per share and a transaction amount of 13.4076 million yuan.

As a director of Gree Electric Appliances, Xu Spontaneous sold the shares of Gree Electric Appliances held by him less than 6 months after the purchase, which violated the provisions of Article 47 of the Securities Law, and the Shenzhen Stock Exchange took regulatory measures to issue a warning letter to him. The income of 2.8298 million yuan generated by Xu Zizi due to this short-term transaction was taken over by the company.

Three months later, Xu spontaneously resigned.

Gree Electric Announced on October 27, 2017 that the Board of Directors of the Company received a written resignation report submitted by Director Xu Spontaneously on October 26, 2017. Xu Zizi "applied for resignation as a director of the 10th board of directors of the company for personal reasons, and apologized for his unfamiliarity with securities-related laws and regulations and the adverse impact on the company".

Since the end of last year, the stock price of Gree Electric Appliances has rebounded slightly. On January 18, Gree Electric Rose 1.71% to 39.21 yuan. (Reporter: Nanshen Source: China Fund News)