Zhangzidao (002069. SZ) scallop escape incident ushered in the finale.
According to the Supreme People's Procuratorate, Wu Hougang, the former chairman and president of Zhangzidao, was sentenced to 15 years in prison and fined 920,000 yuan for the crimes of disclosing important information in violation of regulations, fraud, collusion in bidding, and offering bribes to non-state functionaries.
Red Star Capital Bureau noticed that since 2014, Zhangzidao's scallops have repeatedly made headlines, from "scallops ran away" to "scallops starved to death", and the tortuous development not only shocked shareholders, but also attracted investigations by the Securities Regulatory Commission and other institutions.
The Supreme People's Procuratorate disclosed the "Zhangzidao" case
Wu Hougang, the former chairman of Zhangzidao, was sentenced to 15 years
According to Securities Daily and other media reports, on December 28, the Supreme People's Procuratorate held a press conference and released the case of financial prosecution work in 2023, and the case of "Zhangzidao" illegal disclosure of important information was listed.
Screenshot from the video of the Supreme People's Procuratorate
According to public information, Miasma Island is a listed company on the Shenzhen Stock Exchange, mainly engaged in seafood breeding and seedling, marine aquaculture breeding, marine food research and development, processing and sales, cold chain logistics and fishery equipment and other industries.
The case shows that in 2016, in order to avoid being suspended from listing due to losses for three consecutive years, Wu Moumou (referring to Wu Hougang), the former chairman and president of Zhangzidao, instructed the company's personnel to make a false "Record Form for Shellfish Harvesting at the End of the Month", reducing the area of Ezo scallop harvesting to reduce operating costs, and the scallops that no longer exist in some sea areas should be written off instead of being written off, and the non-operating expenses should be falsely reduced.
The "2016 Annual Report" publicly disclosed by Zhangzidao inflated profits by more than 130 million yuan, accounting for 158.11% of the total disclosed profits in the current period.
From the end of 2017 to the beginning of 2018, in order to be able to re-sow scallop seedlings in the concealed areas that had been harvested in 2016 but not recorded, Wu Moumou instructed the company's personnel to set up additional sampling points in the concealed sea area, fabricate false news about the death of scallops, and falsely write off and reduce the value of scallops in the harvested sea area, and the relevant personnel also inflated the fishing area and operating costs to write off the inflated profits in 2016.
The "2017 Annual Report" publicly disclosed by Zhangzidao reduced profits by more than 278 million yuan, accounting for 38.57% of the total disclosed profits in the current period.
From February 2018 to June 2020, Wu Moumou changed the implementation plan of the National Marine Ranch Demonstration Zone Project in the sea area of Dalian Zhangzidao Group without authorization, and instructed others to fabricate false materials to apply for a total of more than 2,400 yuan in national artificial reef construction subsidies. In addition, Wu Moumou and others also had criminal facts such as collusion in bidding, bribery of non-state functionaries, and bribery of non-state functionaries.
In October 2022, the Dalian Intermediate People's Court made a judgment that the defendant Wu Moumou was sentenced to 15 years in prison and fined 920,000 yuan for the crimes of illegal disclosure of important information, fraud, bid-rigging, and bribery to non-state functionaries, and that the other 11 defendants were sentenced to fixed-term imprisonment ranging from 11 years to one year and seven months in prison (some suspended sentences were applied) and fined.
After the verdict was announced, Wu Moumou and five others appealed.
On May 25, 2023, the Liaoning Provincial High People's Court rejected the appeal and upheld the original judgment.
Zhangzidao scallops become a "star" in the stock market
From "Scallops Ran Away" to "Scallops Starved to Death"
Since 2014, Zhangzidao's scallops have become a "star" in the A-share market, first "ran", and then "starved to death", every move has attracted the attention of shareholders, and the tortuous development not only shocked shareholders, but also attracted the CSRC to intervene in the investigation.
In October 2014, Zhangzidao issued an announcement stating that it would conduct sampling of the stock of bottom-sown Ezo scallops in autumn according to the system, and according to the sampling results, it was found that the inventory of bottom-sown Ezo scallops in some sea areas was abnormal, which would cause heavy losses.
At that time, Zhangzidao said that it was judged from various situations that a natural disaster had occurred in its marine ranch, and the main causes of the disaster were the low temperature and temperature change of the cold water mass in the North Yellow Sea, the influence of the cold water mass in the North Yellow Sea and the current front along the coast of southern Liaoning, and changes in nutrients.
"Where did the scallops go" has also become a hot topic among shareholders, and some people even joked that they may go to a warm place to spend the winter.
Red Star Capital Bureau flipped through the financial report and found that Zhangzidao's revenue in 2014 was about 2.662 billion yuan, with a net loss of 1.189 billion yuan.
In 2018, scallops from Zhangzidao reappeared in the public eye. In February of that year, Zhangzidao issued an announcement saying that it had found that the stocks of bottom-sown Ezo scallops in some waters were abnormal.
As for the abnormal inventory, Zhangzidao gave an analysis and judgment at that time: the decrease in precipitation led to a decline in the number of bait organisms of scallops, and the sharp expansion of the breeding scale exacerbated the shortage of bait, coupled with the abnormal sea temperature, resulting in the scallops after the high temperature period became thinner and thinner, the quality became worse and worse, and the scallops that had been starved for a long time did not recover, and finally induced death.
In other words, this wave of scallops did not "run away", but "starved to death", which once again sparked heated discussions among shareholders.
On 9 February 2018, Zhangzidao received the Notice of Investigation from the CSRC. According to the "Investigation Notice", the China Securities Regulatory Commission decided to file a case for investigation against Zhangzidao due to suspected violations of information disclosure laws and regulations.
Just after the CSRC filed an investigation, at the end of March 2019, Zhangzidao released a first-quarter performance forecast, with an expected loss of 40 million yuan to 45 million yuan, and the main factors affecting the performance are related to scallops.
Zhangzidao said that due to the impact of the 2018 marine ranch disaster, the total harvestable resources of Ezo scallops sown at the end of 2016 and 2017 were reduced, and in the short term, due to the decline in the output of marine ranch aquaculture products, the corresponding depreciation and amortization, sea area use and other fixed costs could not be diluted, resulting in an increase in the unit cost of products, affecting the performance of about 9 million yuan in the first quarter of 2019.
The Securities and Futures Commission borrowed Beidou satellites to find scallops
Satellite positioning data is used to restore the actual fishing trajectory
The Red Star Capital Bureau noted that during the investigation, the CSRC also borrowed the Beidou satellite to find scallops from Zhangzi Island.
According to CCTV financial reports, the amount of fishing area in Zhangzidao is provided to financial personnel on a monthly basis by fishing personnel, and there is no objective record for reference on a daily basis, and there is no effective means for financial personnel to verify, and internal control is seriously lacking. But in fact, the sea areas where the Zhangzidao fishing boats went and how long they stayed have long been recorded by the "sky net" composed of dozens of Beidou satellites.
According to the above report, investigators used objective satellite positioning data to restore the actual fishing track map of the Zhangzidao fishing boat. After comparison, it was found that Zhangzidao did not truthfully record the fishing area, and the actual fishing area in 2016 was nearly 140,000 mu more than the book record.
According to CCTV Finance
According to the China Securities Regulatory Commission, Zhangzidao has lost money for two consecutive years in 2014 and 2015, and objectively took advantage of the characteristics of seabed inventory and fishing situation that are difficult to find, investigate and verify, and did not carry forward costs based on the actual fishing area, resulting in serious distortion of financial reports, and in 2016, the profit was disclosed from loss to profit by underrecording costs and non-operating expenses, and in 2017, the sea area that had been harvested in previous years was included in the write-off sea area or the impairment sea area, and the loss was exaggerated.
In addition, Zhangzidao also involved a number of illegal facts such as the untrue disclosure of the "Year-end Inventory Report" and the "Verification Announcement", the untrue disclosure of the autumn test, and the failure to disclose the changes in performance in a timely manner, and the circumstances of the violation were particularly serious, seriously disrupting the order of the securities market, seriously damaging the interests of investors, and having an extremely bad social impact.
In June 2020, the China Securities Regulatory Commission (CSRC) made an administrative penalty and market ban decision on Zhangzidao's illegal information disclosure case, gave a warning to Zhangzidao, and imposed a fine of 600,000 yuan, imposed a fine ranging from 30,000 yuan to 300,000 yuan on 15 responsible personnel, and banned 4 main responsible persons from the market for 5 years to life.
Red Star News reporter Yang Peiwen
Edited by Yu Dongmei
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