Send money to the ex-wife next door to speculate in stocks! Menova's insider trading shocked "China's good ex-husband"?
Although the lotus root is broken, it is still connected.
Author | Zhang Kaijing
Editor丨Wu Lijuan
Source | Bronco Finance
There was insider trading, and he was praised as a "good ex-husband", Menova (603538. SH) Chairman Yao Chengzhi What did he do?
Recently, the Fujian Securities Regulatory Bureau disclosed an administrative penalty letter, the plot of which is eye-opening, and even some netizens posted on Xueqiu that it can be used as short drama material.
The protagonists of the story are Yao Chengzhi and his ex-wife Zhang Yongji, and the two of them have teamed up to stage a big drama of insider trading. However, the action was a little "unnatural" during the transaction, and the supervision found clues, and finally the incident was exposed, and Zhang Yongji was fined.
So far, Menova has not announced the matter. In this regard, the company said that if it receives a letter from the CSRC, it will be disclosed, and it will not be dealt with if it does not receive the letter, after all, this is the personal behavior of the ex-wife.
In the secondary market, since the disclosure of the penalty letter, the share price of Menova has fallen by 7.35%, and the current market value is 4.1 billion yuan.
How did the two insider trade, and what details did the regulators find?
What is the relationship between Yao Chengzhi and his ex-wife Zhang Yongji now?
Yao Chengzhi and Zhang Yongji can be described as childhood sweethearts, the two are middle school classmates, registered their marriage in July 2000, and have a daughter.
Yao Chengzhi was born in 1974, so he was 26 years old when he got married, or before he founded Menova.
In December 2002, the two parties divorced through court mediation, and the child was awarded to Yao Chengzhi. However, since then, the two sides have not completely severed relations, but have been "severed".
In terms of funds, Yao Chengzhi voluntarily compensated Zhang Yongji 300,000 yuan at the time of the divorce, and after that, Yao Chengzhi claimed that he would pay Zhang Yongji 100,000 yuan a month for living expenses.
This time, during the sensitive period of inside information, Yao Chengzhi still paid Zhang Yongji 25 million yuan on behalf of the intermediary Zhou in the name of divorce compensation. This huge amount of money is also the main source of funds for Zhang Yongji's insider trading in the later period.
In terms of life, during the period involved in the case, in order to take care of Yao Chengzhi, from January 23 to 28 and February 6 to 7, 2021, Zhang Yongji directly lived in the opposite door of Yao Chengzhi's Ningbo residence, which belonged to the property in the name of a wholly-owned subsidiary of Menova.
The care here is not just about dealing with regulatory investigations. On January 26, Zhang Yongji chatted with his sister, mentioning that "one person fried steak one piece, the boss ate well and went to work ('boss' refers to Yao Chengzhi), and burned the two of them twice", "The first time I used the oven, Yao Dong brought it in last night, and he ate three breakfasts, a big steak, an egg, a glass of milk and fruit, and he will eat it dry".
What is inside information?
Menova is a pharmaceutical company engaged in the R&D, production and sales of specialty APIs and finished drugs, with core products covering cardiovascular, central nervous system, gastrointestinal and digestive tract and other therapeutic fields.
In 2019, Menova began to discuss cooperation with Merck, an international pharmaceutical giant. From the initial verbal agreement on the initial cooperation intention, to April 2021, the two sides signed a ten-year strategic cooperation agreement, during which there were multiple rounds of negotiations, which took up to one and a half years.
The regulator determined that the inside information was formed no later than November 20, 2020, which is the day when the Menova commercial negotiators received the general template email for the Strategic Cooperation Agreement sent by Merck. It was made public on April 22, 2021, when Menova issued the relevant information announcement.
Source: Menova official website
The signing of this cooperation agreement has a significant impact on the operating results and future development of Menova.
According to the cooperation agreement, Merck provided a long-term loan of 9 million US dollars to Menova, and according to the information provided by Menova, Merck purchased a total of 9 varieties with a total of about 84 tons/year, accounting for 22% of the total production capacity of Xuancheng Menova and 2.7% of the company's total production capacity, and the project has achieved revenue of 10% of the company's CDMO (new R&D and production outsourcing model) revenue in 2021.
According to the Dongguan Securities Research Report, Menova signed a ten-year CDMO strategic cooperation agreement with Merck, a large multinational pharmaceutical company, in the fields of pet drugs, veterinary drugs and animal health, which reflects Merck's full recognition of the company's R&D technology, production and quality in the field of APIs, and further enhances the company's international competitiveness in the field of CDMO.
How did Zhang Yongji get the news and how did he place an order?
On February 7, 2021, the negotiations between Menova and Merck have reached the final stage, Merck has just sent a general template email to Menova for animal health "Product Quality Agreement", and Menova has also decided to give feedback to Merck before work on February 8 after holding the president's office meeting.
On the same day, Zhang Yongji mentioned in a WeChat conversation with others: "Lao Yao said that according to the current stock price, it will be discounted to me, let me buy it myself, I don't know if it's true or not." ”
Although judging from the dialogue, Zhang Yongji is still a little suspicious of "Lao Yao", but he is very "happy" to buy stocks.
On February 8, Zhang Yongji received 10 million yuan in "divorce compensation", and then transferred 3.74 million yuan to his stock account (60,000 yuan has been deducted and transferred), and bought and traded 49,100 shares of Menova stock, with a transaction amount of 1.4682 million yuan.
On February 9, Zhang Yongji received another 5 million yuan in "divorce compensation". On the same day, he transferred 6.9 million yuan to his stock account and bought and traded 100,000 shares of Menova shares, with a transaction amount of 3.0189 million yuan.
On February 10, Zhang Yongji got the last 10 million yuan of 25 million yuan, transferred 5 million yuan to the stock account on the same day, and bought and traded 245,600 shares of Menova shares, with a turnover of 7.4029 million yuan.
Source: Yiwei View Library
Within three days, Zhang Yongji spent nearly 12 million yuan to buy 394,700 shares of Menova shares.
It is worth mentioning that from this point of view, Zhang Yongji did not use "divorce compensation" to buy stocks. Because according to the regulatory investigation, Zhang Yongji concentrated funds to buy 405,700 shares of Menova shares from February 1 to 10. The side shows that in the first week of February, Zhang Yongji spent 327,800 yuan to buy 11,000 shares of Menova shares.
As mentioned above, Menova held the president's meeting on February 7, and Merck sent the General Template email for the Product Quality Agreement on February 4. In other words, Zhang Yongji may even have learned the relevant inside information before the presidents.
What is the profit or loss of trading?
The timing of Zhang Yongji's purchase coincided with the phased low of Menova's stock price.
From June 2020 to February 5, 2021, Menova's share price halved, and then experienced a period of bottom volatility until the company announced the agreement with Merck, and the stock price "took off" again.
Source: Wind data
During this period of turmoil, Zhang Yongji also contacted Yao Chengzhi through text messages many times.
For example, on March 12, Zhang Yongji said: "If you want to take out a mortgage loan, the stocks are all eaten according to your wishes, and you need to rely on your prompts if you can't earn it."
On March 15, Zhang Yongji said: "I communicated with you in Ningbo last year to buy a house loan... , Invest in stocks, the account is the left hand for the right hand, earn more and less, you can say anything, but you know the current situation, I heard my daughter say that you are in a meeting, don't forget. ”
On March 23, Zhang Yongji also said: "Buying a house loan, buying a house and copying stocks, the account is clearly in front of you, and the stocks are not earning now, and you can still run there after earning this account, you drag me like this, I can't stand it." ”
According to the meaning of these text messages, Zhang Yongji took out a loan to buy a house and wanted to ask Yao Chengzhi for money, although Yao Chengzhi called "divorce compensation", but the funds did not seem to be enough. So the idea of making money by speculating in stocks came into being, but the stock was still fluctuating at the bottom at that time, and Zhang Yongji was a little anxious.
However, in the end, Zhang Yongji still made money. As of November 8, 2022, it sold all the 405,700 shares it bought, with a cumulative profit of 11.0128 million yuan.
How is the supervision detected?
Zhang Yongji once put forward defense opinions: first, the relevant inside information should be formed no earlier than March 15, 2021 (the time when Menova initiated the contract review process internally); second, he was neither an insider of inside information, nor did he illegally obtain inside information, nor did he have a close relationship with the insider, and had no contact with the insider during the sensitive period; and third, the transaction behavior did not coincide with the progress of the inside information.
However, the regulator held that, firstly, there was no improper time for the formation of inside information, and secondly, Zhang Yongji lived opposite Yao Chengzhi during the period involved in the case, and Zhang Yongji's funds for buying stocks mainly came from Yao Chengzhi, so it can be determined that the two parties had a close relationship.
Finally, Zhang Yongji's securities account had sold Neptunus Biotech (000078. SZ), Renhe Pharmaceutical (000650. SZ), but only concentrated on buying Menova stocks, and the scale of trading funds is significantly larger than in the past. It can be seen that the willingness to buy is very strong and the decision is decisive, which is inconsistent with the so-called "long-term trading Xi" and "feelings for Menova".
In the end, the Fujian Supervision Bureau decided: confiscate 11.0128 million yuan of illegal gains from Zhang Yongji and impose a fine of 22.0257 million yuan.
Why only punish Zhang Yongji and not Yao Chengzhi?
It is worth mentioning that the punishment of this supervision only involves Zhang Yongji, and does not involve Yao Chengzhi who is involved behind it.
In this regard, Menova said that the punishment of the chairman depends on whether the China Securities Regulatory Commission or the Shanghai Stock Exchange will give it. "We have not yet received any notification of this. After all, people also came to inquire, but no substantive documents were given. ”
Xia Hailong, a lawyer at Shanghai Shenlun Law Firm, believes that theoretically, the chairman should also be punished, and it is possible that the follow-up results of this investigation have not been fully disclosed.
According to relevant laws and regulations, if a person with inside information about securities or futures trading has been involved in the issuance of securities, securities or futures trading, or other information that has a significant impact on the price of securities or futures trading, expressly or implicitly indicates that others are engaged in the above-mentioned trading activities, and the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not more than five years or short-term detention, and/or a fine of not less than one time but not more than five times the amount of unlawful gains.
In Xia Hailong's view, the relationship between the chairman and his ex-wife and the source of funds have been clearly mentioned in the punishment, so it is unlikely to belong to the situation of "there is no way to prove that the chairman is an insider trader".
The childhood sweetheart of his youth, he can't grow old together, but he can "cooperate" with violations of laws and regulations, what do you think of such a plot?