Yangtze River Business Daily reporter Shen Yourong
Xiao Yongming, the former richest man in Qinghai, was involved in a criminal case again.
On the evening of April 15, Zangge Mining (000408. SZ) announced that the company recently received a notice from the family of Xiao Yongming, the actual controller of the company, that Xiao Yongming was placed under residential surveillance at a designated location by the Public Security Bureau of Zigong City, Sichuan Province on suspicion of a criminal case.
Xiao Yongming is the actual controller of Zangge Mining, and since 2016, when Zangge Mining went public through the backdoor listing of Jinguyuan, it has been in trouble. In 2019, Xiao Yongming was fined for inflating the performance of listed companies, and in 2021, he was arrested and sentenced for illegal mining, but his verdict was changed to not guilty in a retrial last year.
Xiao Yongming, once the richest man in Qinghai, resigned as chairman in 2019 and handed over the management of the company to his two sons.
In 2023, due to the decline in the price of core products, Zangge Mining's performance will change face, and its operating income and net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") will both decline. Moreover, the subsidiary Zangge Potash Fertilizer was subject to tax inspection, and a total of 668 million yuan of tax was required.
The Yangtze River Business Daily reporter noted that by the end of 2023, Xiao Yongming and Zangge shareholders pledged 590 million shares of Zangge Mining (accounting for 37.29% of the total share capital), with an overall pledge rate of more than 90%.
On April 16, the share price of Zangge Mining fell to the limit.
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The former richest man in Qinghai was involved in a criminal case again
Xiao Yongming, the former richest man in Qinghai, was involved in a criminal case again.
On April 15, Zangge Mining issued an announcement that the actual controller was taken compulsory measures. According to the announcement, Xiao Yongming, the actual controller of Zangge Mining, was placed under residential surveillance at a designated location by the Zigong Municipal Public Security Bureau on suspicion of a criminal case.
According to the announcement, Xiao Yongming currently does not serve as a director, supervisor or senior executive of the company, and the above matters will not have a significant impact on the company's daily production and operation, will not lead to major uncertainty in the ownership of the company's equity, and will not adversely affect the stability of the company's control.
According to public information, Xiao Yongming was born in 1964 and is from Anyue County, Sichuan Province. In November 2002, Xiao Yongming and Lin Jifang jointly registered Golmud Zangge Potash Fertilizer Co., Ltd. with in-kind investment in the cross-border lithium salt business, becoming the "king of potash fertilizer". In 2016, through the backdoor Jinguyuan, Zangge Holdings (now renamed Zangge Mining) landed on the A-share market, and Xiao Yongming's wealth exceeded 20 billion yuan, becoming the richest man in Qinghai.
This is not the first time Xiao Yongming has been involved in a criminal case.
On January 29, 2021, Xiao Yongming was taken into criminal detention by the Qinghai Provincial Public Security Department on suspicion of illegal mining, and on February 25, he was arrested with the approval of the Qinghai Provincial People's Procuratorate.
Xiao Yongming acquired all the shares of Hongzhu Materials in 2006, and Hongzhu Materials held a 40% stake in Qinghai Coking Coal. In 2011, Hongzhu Materials transferred all its shares in Qinghai Coking Coal. During this period, Qinghai Coking Coal mined coal resources without obtaining a mining license, and Xiao Yongming and others actively organized and participated in the mining of coal without obtaining a mining license, which constituted the crime of illegal mining.
After the case was filed, Xiao Yongming actively returned all the illegal gains obtained by Hongzhu Materials from Qinghai coking coal of about 294 million yuan.
In June 2022, Xiao Yongming was sentenced by the court of first instance to three years in prison, suspended for four years, and fined 2 million yuan. In August 2023, Zangge Mining announced a retrial verdict, showing that Xiao Yongming was not guilty.
In addition, in 2019, the Shenzhen Stock Exchange imposed administrative penalties on Zangge Mining and Xiao Yongming for inflating operating income, operating profits, accounts receivable and prepaid accounts by carrying out false trading business, as well as failing to disclose the illegal occupation of funds by the controlling shareholder. Among them, the Shenzhen Stock Exchange gave Xiao Yongming a warning and imposed a fine of 900,000 yuan. Xiao Yongming was also banned from the market for five years.
This time, what kind of criminal case is Xiao Yongming involved in?
It is worth mentioning that Xiao Yongming has handed over Zangge Mining to the second generation.
After two years, net profit fell again
Xiao Yongming is once again involved in a criminal case, and the profitability of Zangge Mining, which he actually controls, is declining.
In 2021 and 2022, Zangge Mining's operating income will be 3.623 billion yuan and 8.194 billion yuan respectively, a year-on-year increase of 90.31% and 126.19%, and the net profit will be 1.427 billion yuan and 5.655 billion yuan, a year-on-year increase of 523.60% and 296.18%.
The significant increase in performance was mainly due to the significant increase in the production and sales of potash fertilizer and lithium carbonate, and the sharp increase in prices. In addition, in 2022, the company's long-term equity investment confirmed a significant increase in the investment income of Julong Copper compared with the same period last year.
By 2023, Zangge Mining's operating income and net profit will be 5.226 billion yuan and 3.420 billion yuan respectively, a year-on-year decrease of 36.22% and 39.52%.
After two years, the company's revenue and net profit have declined. In response to the change in performance in 2023, Zangge Mining explained that it was mainly due to the decline in the price of potash fertilizer and lithium carbonate products.
On the surface, if it is only the market fluctuation that leads to the decline in net profit due to the decline in product prices, the operating performance of Zangge Mining is quite normal. However, there may still be potential risks associated with Zangge Mining.
On the evening of April 10 this year, Zangge Mining issued an announcement that its wholly-owned subsidiary, Zangge Potash Fertilizer, received the "Notice of Tax Matters" issued by the Golmud Municipal Taxation Bureau of the State Administration of Taxation on April 9, and the tax department believes that Zangge Potash Fertilizer and the company's wholly-owned subsidiary, Zangge Lithium, are affiliated enterprises, and from 2021 to 2023, the price of brine sold by Zangge Potash Fertilizer to Zangge Lithium is obviously low, and Zangge Potash Fertilizer should pay relevant taxes such as value-added tax and resource tax.
According to the announcement, according to the company's calculations, Zangge Potash Fertilizer will need to pay value-added tax, resource tax, enterprise income tax and other related taxes and taxes from 2021 to 2023, with a total of about 480 million yuan.
In March this year, Zangge Potash also received a tax treatment decision from the Inspection Bureau of the Qinghai Provincial Taxation Bureau, which required to pay the value-added tax, urban maintenance and construction tax, enterprise income tax, etc., which were underpaid from 2004 to 2014, as well as the price adjustment fund underpaid from 2011 to 2014, with a total of about 56 million yuan of taxes and fees, and 132 million yuan of late fees, totaling about 188 million yuan.
In the tax alone, Zangge potash fertilizer will have to pay 668 million yuan.
Xiao Yongming and the Tibetan Department have been exposed to financial problems. In March this year, Zangge Holdings and others were forced by the court for failing to fulfill their legal obligations on time, and the target of the enforcement was 259 million yuan. In 2020, Sichuan Yonghong Industrial Co., Ltd. and Tibet Zangge Venture Capital Group Co., Ltd., of which Xiao Yongming served as the legal representative, were listed by the court as restricted high-consumption enterprises.
Previously, some media reported that Zangge Mining and the Zangge Department behind it had fallen into a huge debt crisis, including a total of 10.503 billion yuan of debt principal and interest pledged by shares. Creditors include Guosen Securities, Huarong Securities, Xining Rural Commercial Bank, etc.
By the end of 2023, Xiao Yongming and Zangge shareholders pledged 590 million shares of listed companies (accounting for 37.29% of the total share capital), with an overall pledge rate of more than 90%.
On March 30 this year, Zangge Mining announced that the controlling shareholder Tibet Zangge Venture Capital Group Co., Ltd. (hereinafter referred to as "Zangge Group") intends to reduce its holdings of the company's shares by block trading within 3 months after 15 trading days from the date of disclosure of the announcement by means of block transactions of no more than 15.8 million shares, that is, no more than 1.01% of the company's total share capital (excluding repurchased shares). The reason for the reduction of its holdings is to fulfill its commitments on the contingencies of Zangge Potash Fertilizer, repay the due debts of financial institutions, and supplement its own operating capital needs.
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