Original title: The company's public opinion|Zhendong Pharmaceutical's non-operational occupation of listed companies' funds was publicly condemned, and some relevant executives were not suitable to serve as directors, supervisors and senior executives of listed companies for three years
On April 12, the Shenzhen Stock Exchange issued a decision on giving public recognition and other disciplinary sanctions to Shanxi Zhendong Pharmaceutical Co., Ltd. (hereinafter referred to as "Zhendong Pharmaceutical" or "the Company") and related parties. According to the decision, Zhendong Group, the controlling shareholder of Zhendong Pharmaceutical, failed to be honest and trustworthy, abused its controlling position in the company to occupy the funds of the listed company for a long time, seriously damaged the legitimate rights and interests of the listed company and other shareholders, violated the relevant regulations of the Shenzhen Stock Exchange, and the Shenzhen Stock Exchange gave it a public reprimand, and some relevant executives of the company were not suitable to serve as directors, supervisors and senior managers of the listed company for three years.
Screenshot of the relevant decision of the Shenzhen Stock Exchange
According to the relevant decision, according to the "Announcement on Receiving the Decision on Administrative Supervision Measures of the Shanxi Securities Regulatory Bureau" disclosed by Zhendong Pharmaceutical on March 6, 2023, the "Suggestive Announcement on Self-inspection of the Occupation of Non-operating Funds by the Controlling Shareholder and Its Related Parties and Resolved" disclosed on May 29, 2023, and the situation ascertained by the Shenzhen Stock Exchange, Zhendong Pharmaceutical and related parties have the following violations:
From February 2018 to August 2021, Zhendong Pharmaceutical and its subsidiary, Shanxi Zhendong Daodi Medicinal Materials Development Co., Ltd., etc., made a donation to Pingshun County Longshuo Planting Professional Cooperative, Lingchuan County Liaoyuan Traditional Chinese Medicine Professional Cooperative, Pingshun County Meihai Planting Professional Cooperative, Tunliu County Jianye Chinese Herbal Medicine Planting Co., Ltd., Pingshun County Shunzheng Chinese Herbal Medicine Development Co., Ltd., Wuxiang Jinhe Planting Professional Cooperative, Shanxi Jiuzhou Tianrun Daodi Medicinal Materials Development Co., Ltd., Shanxi Guoxin Jin Pharmaceutical Group Guxian Xingyue Forsythia Development Co., Ltd., Wenxi County Minxuan Planting Professional Cooperative, Tunliu County Nangou Village Haiqi Chinese Herbal Medicine Planting Professional Cooperative, Wuhan Kangrui Pharmaceutical Co., Ltd. prepaid Chinese herbal medicine collection collection, raw material collection and borrowing from it, to Zhou Hongjun, Zhao Guoliang, Zhao Changlong to lend personal loans, to Anqiu Shengcai Marketing Planning Center and other 26 units to prepay marketing fees and other forms, the funds directly or indirectly through Shanxi Jindu Trading Co., Ltd., Changzhi Chengcheng Agricultural Products Development Co., Ltd. was transferred to Shanxi Zhendong Health Industry Group Co., Ltd. (hereinafter referred to as "Zhendong Group"), the controlling shareholder of Zhendong Pharmaceutical, forming a non-operating occupation of listed company funds by Zhendong Group. During the period, the maximum daily occupied amount of Zhendong Group was 134.44 million yuan, accounting for 2.38% of Zhendong Pharmaceutical's audited net assets in 2020, and the above-mentioned occupied funds have been fully returned before April 18, 2023. Zhendong Pharmaceutical's above-mentioned behavior violated Article 1.4 of the Rules Governing the Listing of Stocks on the Growth Enterprise Market (Revised in December 2020) and Article 2.1.4 of the Guidelines for the Standardized Operation of Listed Companies on the Growth Enterprise Market (Revised in 2020) of the Shenzhen Stock Exchange.
Zhendong Group, the controlling shareholder of Zhendong Pharmaceutical, failed to be honest and trustworthy, abused its controlling position in the company to occupy the listed company's funds for a long time, and seriously damaged the legitimate rights and interests of the listed company and other shareholders, which violated Article 1.4 and Article 4.3.2, Paragraph 2 of the Rules Governing the Listing of Stocks on the Growth Enterprise Market (Revised in December 2020) of the Shenzhen Stock Exchange and Article 4.2.7, Paragraph 3 and Article 4.2.8, Paragraph 3 of the Guidelines for the Standardized Operation of Listed Companies on the Growth Enterprise Market (Revised in 2020).
Li Anping, the actual controller and chairman of Zhendong Pharmaceutical, failed to be honest and trustworthy, diligent and conscientious, failed to urge the company to operate in accordance with the law and fulfill its information disclosure obligations in a timely manner, failed to ensure that the company established and implemented effective internal control systems such as fund management, and allowed the controlling shareholder to occupy the listed company's funds for a long time, violating Article 1.4, Article 4.2.2, Paragraph 1, Item 1, Article 4.3.2, Item 2 of the Rules for the Listing of Stocks on the Growth Enterprise Market (Revised in December 2020) of the Shenzhen Stock Exchange. The provisions of Article 4.2.7, Paragraph 3 and Article 4.2.8, Paragraph 3 of the Guidelines for the Standardized Operation of GEM Listed Companies (2020 Revision) bear important responsibility for the above violations. Liu Changlu, the chief financial officer of Zhendong Pharmaceutical, as the specific person in charge of the company's financial management, failed to pay close attention to the company's internal financial fund outflow, and failed to be diligent and conscientious in the occupation of listed companies' funds many times during his tenure, violating the provisions of Article 1.4 and Article 4.2.2 of the Rules for the Listing of Stocks on the Growth Enterprise Market (Revised in December 2020) of the Shenzhen Stock Exchange, and bears important responsibility for the above violations.
Ma Shifeng, the then general manager of Zhendong Pharmaceutical, and Zhou Hongjun, the then secretary of the board of directors, failed to fulfill their duties and perform their duties of loyalty and diligence, violating the provisions of Article 1.4 and Article 4.2.2, Paragraph 2 of the Rules Governing the Listing of Stocks on the Growth Enterprise Market (revised in December 2020) of the Shenzhen Stock Exchange, and bear important responsibility for the above violations.
In view of the facts and circumstances of the above-mentioned violations, and in accordance with Articles 12.4, 12.5 and 12.6 of the Rules Governing the Listing of Stocks on the ChiNext Board of the Shenzhen Stock Exchange (Revised in December 2020) and Articles 9 and 23 of the Self-Regulatory Guidelines for Listed Companies No. 12 - Implementation Standards for Disciplinary Sanctions, the Shenzhen Stock Exchange has made the following disciplinary decisions after deliberation and approval by the Disciplinary Committee of the Shenzhen Stock Exchange:
1. Li Anping, the actual controller and chairman of the board of directors of Shanxi Zhendong Pharmaceutical Co., Ltd., and Liu Changlu, the chief financial officer of Shanxi Zhendong Pharmaceutical Co., Ltd., shall be publicly determined to be unsuitable to serve as directors, supervisors, or senior managers of listed companies for three years;
2. Shanxi Zhendong Pharmaceutical Co., Ltd. was given the sanction of public reprimand;
3. Give a public reprimand to the controlling shareholder Shanxi Zhendong Health Industry Group Co., Ltd.;
4. Shanxi Zhendong Pharmaceutical Co., Ltd. was given the punishment of public reprimand to the actual controller and chairman of the board of directors Li Anping, the chief financial officer Liu Changlu, the then general manager Ma Shifeng, and the then secretary of the board of directors Zhou Hongjun.
For the above-mentioned violations of Shanxi Zhendong Pharmaceutical Co., Ltd. and related parties and the sanctions given by the Shenzhen Stock Exchange, the Shenzhen Stock Exchange will record them in the integrity file of the listed company.
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