A well-known listed company has been locked in and delisted! The husband and wife of the actual controller have been arrested! In one and a half years, they have cashed out more than 1 billion yuan, and they have used 92 accounts to manipulate the company's stock price......
On December 13, the share price of *ST Bolong (hereinafter referred to as "Bobaolong"), known as "the first share of A-share clothing design", closed at 0.63 yuan / share, which has been lower than 1 yuan / share for 11 consecutive trading days, and even if the remaining 9 trading days can not return to "1 yuan" even if the daily limit is realized, the stock has locked in advance "1 yuan delisting".
It is worth noting that Baibaolong previously announced that he received the "Arrest Notice" issued by the Jieyang Municipal Public Security Bureau provided by the families of the actual controllers Chen Weixiong and Chen Nana, and learned that with the approval of the Jieyang Municipal People's Procuratorate, Chen Weixiong and Chen Nana have been arrested on June 19, 2023 on suspicion of fraudulent issuance of shares, illegal disclosure, and non-disclosure of important information.
Chen Nana, Chen Weixiong Image source: Visual China (data map)
Lock in "$1 delisting" in advance
He has been fined for financial fraud for many years
So far, the closing price of the stock has fallen below par value for 11 consecutive trading days. According to the regulations of the exchange, if the daily closing price of the company's shares is lower than 1 yuan per share for 20 consecutive trading days, the exchange will terminate the listing and trading of its shares.
According to the reporter's calculations, based on the closing price of 0.63 yuan / share on December 13, even if the daily limit is achieved for the remaining 9 trading days, the share price of Bobaolong cannot return to 1 yuan, so the stock has locked in advance "1 yuan delisting".
According to the Securities Times, Kaiyuan Securities believes that the rule design of "1 yuan delisting" can make those listed companies whose fundamentals continue to deteriorate through investors "voting with their feet" to keep their stock prices below 1 yuan, and even for some companies with very low stock prices, they can also lock in delisting in advance before 20 trading days, so as to help investors make investment judgments in advance.
At the opening of the market on the 14th, *ST Bolong's share price continued to fall, and as of the end of the press report, it was 0.6 yuan per share.
In March 2021, the company was investigated by the China Securities Regulatory Commission. In response to this investigation, in April 2022, the company received the "Administrative Penalty Decision" issued by the China Securities Regulatory Commission. According to the decision, the company committed a number of illegal acts, including false records in the prospectus of the initial public offering of shares, the report on the issuance of non-public shares in 2016 and the listing announcement and periodic report, and the failure to truthfully disclose "other non-current assets" in the annual reports from 2017 to 2019 In the 2018 annual report, the use of raised funds was not truthfully disclosed, and from 2018 to 2020, there were cases where the external guarantee failed to fulfill the approval procedures and information disclosure obligations.
Based on the above-mentioned violations, Bai Baolong was ordered to make corrections, given a warning and fined 10 million yuan, and Chen Weixiong and Chen Nana were given warnings and fined 5 million yuan respectively and banned from the market for life.
In September 2022, the company announced that because the company and related parties were subject to administrative penalties by the China Securities Regulatory Commission, dozens of investors filed a lawsuit against the company, requesting that the listed company be ordered to compensate for various economic losses. According to the progress of the lawsuit disclosed in January this year, the Guangdong Intermediate People's Court ruled in the first instance that the company should pay 2.273 million yuan in investment losses to 43 investors including Yu Fang. According to the latest 2022 annual report, Pabaolong was involved in a total of 15 securities misrepresentation cases, most of which were not executed.
Some securities misrepresentation cases Image source: Screenshot of the 2022 annual report
In addition, the company was also investigated and reprimanded for failing to disclose periodic reports on time and inaccurate performance forecasts. Moreover, because the company's audited net assets attributable to shareholders of listed companies in 2022 are negative, the company's stock trading has been subject to a delisting risk warning.
On August 31, Shenzhen Shifan Garment Co., Ltd., a creditor of Baibaolong, applied to the Jieyang Intermediate People's Court for reorganization and pre-reorganization of the company. As of September 5, 2023, Shifan Apparel received a notice from the Jieyang Intermediate People's Court that the application submitted did not meet the requirements. There is significant uncertainty as to whether the company will carry out reorganization and pre-reorganization in the future.
The actual controller cashed out more than 1 billion yuan in a year and a half
On October 27, 2020, Baibaolong Company issued the "Pre-disclosure Announcement on the Reduction of Shares by Controlling Shareholders", stating that Chen Weixiong and Chen Nana plan to reduce their holdings by no more than 6.46 million shares (including 1.64 million shares of Chen Weixiong and 4.82 million shares of Chen Nana). ), accounting for 1.2% of the company's total share capital, the reason for the reduction is the shareholders' own capital needs.
According to Wind statistics, from March 2019 to September 2020, the "Chen family", the actual controller of Baibaolong, increased its holdings by 1 time and reduced its holdings 81 times, with an average monthly average of more than 4 reductions, with a total of 57.3047 million shares and a reduction amount of 742 million yuan.
Up to now, Chen Weixiong and Chen Nana hold less than 25% of the company's shares together, compared with more than 57% of the shares held by the two in the early days of listing, more than half of the shares have been reduced.
In response to the intensive reduction of the controlling shareholder's holdings, the staff of Bobaolong said at that time, "This is the personal capital needs of the controlling shareholder, they are a highly controlled family business, mainly this year's reduction of a part, of which, the two agreement transfers accounted for 10%, and the introduction of two strategic investors is also to optimize the company's equity structure." Choice terminal data also shows that the main reductions in Baibaolong's shares are Chen Changxiong, Chen Nana and Chen Qiuming. According to the prospectus information, Chen Weixiong and Chen Nana, shareholders of Baibaolong, are husband and wife, Chen Qiuming and Chen Weixiong are father and son, and Chen Changxiong and Chen Nana are father and daughter.
In addition, Chen Weixiong and Chen Nana transferred 10% of the company's shares at a discount of nearly 400 million yuan.
According to the announcement of Baibaolong, on June 2, 2020, Chen Weixiong and Chen Nana signed the "Share Transfer Agreement" with Zheshang Wealth (Beijing) Investment Fund Management Co., Ltd. - Zheshang Investment Hexu No. 1 Private Securities Investment Fund to transfer 26.9 million shares of Baibaolong, accounting for 5% of the total share capital, at a price of 6.705 yuan per share, with a total price of about 180 million yuan.
On July 27 of that year, Baibaolong issued another announcement, saying that its controlling shareholder planned to transfer 26.9 million shares of 5% of its shares to Pinrun FOF Pinren Phase 2 Private Securities Investment Fund (hereinafter referred to as "Pinren Phase 2"), and the fund manager of Pinren Phase 2 was Zhejiang Pinrun Investment Management Co., Ltd. (hereinafter referred to as "Pinrun Investment"). According to the announcement, the transfer price is 7.46 yuan per share, and the total price is about 200 million yuan.
Stock price manipulation details exposed:
used 92 accounts and lost 12 million in less than 1 year
It is worth noting that, according to the details disclosed on the official website of the China Securities Regulatory Commission, Chen Nana controlled 9 bank accounts including "Chen Moujun" through Baibaolong, and paid 83 million yuan to 9 bank accounts including "Guo Mouying" controlled by Yang Jie and Zheng Hui, jointly manipulating "Baibaolong". In order to carry out manipulative behavior, Yang Jie and Zheng Hui used 92 securities accounts (hereinafter referred to as the account group) such as "Cao Moufeng" to conduct securities transactions.
From July 6, 2018 to May 31, 2019, Yang Jie and others controlled the use of account groups, concentrated their capital advantages and shareholding advantages, continuously traded and reversed "Bobaolong", and repeatedly affected the stock trading price and trading volume by means of intraday and tail market pulling, resulting in obvious abnormalities in the stock price during the period, constituting manipulation of the securities market.
The manipulation period totaled 219 trading days, and the account group traded for a total of 218 trading days.
Among them, July 6, 2018 to October 10, 2018 is the stage of opening positions and pulling up, and October 11, 2018 to May 31, 2019 is the stage of maintaining the stock price. During the manipulation period, a total of 130 million shares were bought at auction, with a purchase transaction amount of 2.096 billion yuan, and 115 trading days ranked first in buying transactions, accounting for 52.75% of the trading days of the account group. A total of 109 million shares were sold at auction, with a turnover of 1.784 billion yuan.
The China Securities Regulatory Commission pointed out that during the manipulation period, there were 200 trading days on which the account group accounted for more than 5% of the outstanding share capital of "Bobaolong", and the highest shareholding ratio reached 13.22%, and the account group had obvious advantages in capital and shareholding.
Especially from July 6 to October 10, 2018, the account group had obvious characteristics of pulling up, and subscribed for a large number of shares at a price not lower than the market ask price or market price, and the total number of shares held quickly increased from 3.72 million shares to 37.79 million shares.
During the manipulation period, there were a total of 49 intraday pull-up behaviors in which the stock price rose by more than 2% and the buying transaction accounted for more than 30% during the period, and there were a total of 8 periods when the stock price rose by more than 2% and the buying transaction accounted for more than 30% during the period.
During the investigation, the CSRC's penalty decision set out two obvious operational circumstances:
From 14:47:35 to 14:50:06 on August 2, 2018, the account group subscribed for 849,500 shares, and the stock price increased by 12.36% during the period.
From 9:49:16 to 10:11:01 on August 7, 2018, the account group subscribed for 716,700 shares, and the stock price increased by 2.88%. After 14:30, the account group will apply for a large amount again. Between 14:30 and 15:00, the account group subscribed for 1,015,900 shares, and the stock price rose by 5.27%.
In addition, during the manipulation period, there were 141 trading days of reversal behavior in the account group, accounting for 64.68% of the trading days of the account group. There were 12 trading days when the inverted volume of the account group accounted for more than 10% of the market auction volume, reaching a maximum of 38.14%.
However, according to the disclosure of the China Securities Regulatory Commission, it is estimated that 92 account groups have lost 12.3496 million yuan......
It used to be the "No. 1 Fashion Design Stock"
Last year, the loss exceeded 800 million
Born in 1978 and 1979 respectively, Chen Weixiong and Chen Nana founded Baibaolong in 2006 and led the company to land on the A-share market in 2015, becoming the first fashion design stock.
According to the prospectus, the design link accounts for about 40% of the profit distribution structure in the value chain of the garment industry, and the company has been committed to realizing the specialization, industrialization and large-scale operation of the garment design business since its establishment, and the main business is positioned in the high value-added design link of the industrial chain. Through the industrialization of design, the company has truly realized the value of "creative design" and formed a unique design industry chain. In the prospectus, the company said that it would "strive to become the most outstanding and competitive clothing design enterprise in the field of international fashion design in mainland China".
However, with the financial fraud confirmed, the actual controller arrested, and the company locked up and delisted, the hope of realizing the original vision of Baibaolong has been slim. According to the 2022 annual report, Baibaolong achieved an operating income of 114 million yuan, a year-on-year decrease of 23.11%, and a net profit loss of more than 800 million yuan.
The company said that the main reasons for the high losses were the impact of the company's own unfavorable factors and the strategic adjustment of major clothing brand customers, the company's sales orders fell sharply, resulting in a sharp decline in the performance of the current clothing business;
In addition to losses, the scale of assets and liquidity of the company are also declining. The total assets at the end of 2022 decreased by 55.00% compared with the end of the previous period, of which current assets decreased by 76.27%, mainly due to the inability to recover some receivables due to the inability to recover credit impairment losses accrued in the current period, and non-current assets decreased by 29.42%, mainly due to the write-off of deferred tax assets recognized in previous years.