The equity transfer dispute has not been resolved, and the competition dispute in the same industry has arisen again 603387. SH) The internal control deficiencies exposed by this made the company's annual report "non-standard" for the first time. According to the company's recently released 2023 annual report, the auditor issued an unqualified audit report on the company with an emphasis paragraph, pointing out that the company has major deficiencies in the company's internal control over non-financial reporting. This is also the first "non-standard" annual report received by the company since its listing in 2017.
Not only that, one of the protagonists of the dispute, Jingchuan Diagnostics (831676. NQ) is a "difficult birth" in the annual report, and the company is at risk of being delisted by the national small and medium-sized enterprise share transfer system, which also has a great negative impact on the base egg biology.
Pan Yue Cartography
The first "non-standard" annual report after listing
On April 30, after a change and postponement, the 2023 annual report of Jidan Bio was finally released. Different from the audit reports issued by audit institutions in previous years with standard unqualified opinions, the annual report was issued by the notary Tianye Certified Public Accountants (special general partnership) (hereinafter referred to as "notary Tianye") with an unqualified opinion on the highlighted items, that is, a "non-standard" audit opinion.
Notary Tianye pointed out that in the process of internal control audit, it was noted that there were the following major deficiencies in the internal control of non-financial reporting of Jidan Biology: First, Jidan Biology failed to reach an agreement with the above-mentioned shareholders of Jingchuan Diagnostics on the transfer of part of the remaining shares of Jingchuan Diagnostics held by Hu Shujun, Guan Zhangrong, Wang Yuqiong, Ma Quanhai, Wu Yanfang, Ye Yanli, Rong Xiaoyuan, Wuhan Boruihong Management Consulting Partnership (Limited Partnership) and Wuhan Zhongjucheng Consulting Management Co., Ltd. (hereinafter referred to as "Wuhan Zhongjucheng") A lawsuit arises between the parties.
Second, as the controlling shareholder of Jingchuan Diagnostics, Jidan Biology failed to reach a consensus on the resolution of the board of directors of Jingchuan Diagnostics through an effective negotiation and communication mechanism with the above-mentioned minority management shareholders, resulting in the failure of Jingchuan Diagnostics as a company listed on the New Third Board to disclose regular reports as scheduled, which had a great negative impact on the company.
Jidan Bio said in its annual report that the company will actively resolve the litigation matters with the management shareholders of Jingchuan Diagnostics, and for the litigation matters, the company has hired a professional lawyer team to actively take relevant legal measures to eliminate the impact of the litigation on the company as soon as possible; The company will continue to improve the governance structure and internal control system, standardize the implementation of the internal control system, strengthen the supervision and inspection of internal control, optimize the internal control environment, improve the level of internal control management, and effectively prevent all kinds of risks through the process control of various risk matters, so as to promote the healthy, stable and sustainable development of the company.
Jingchuan Diagnostics is a high-tech enterprise specializing in the research and development, production and sales of in vitro diagnostic instruments and in vitro diagnostic reagents in Wuhan, which was listed on the New Third Board on January 22, 2015. In 2020, Jidan Biotech acquired a controlling stake in Jingchuan Diagnostics through the transfer of specific matters agreement and capital increase, and made an agreement on performance commitments and the acquisition of remaining shares.
However, by 2022, with the completion of the three-year performance commitment target of Jingchuan Diagnostics, the remaining share purchase agreement between Jidan Biotech and the above-mentioned management shareholders has not been fulfilled for a long time, so the two parties finally chose to go to court.
In August 2023, due to the failure to reach an agreement on the transfer of part of the remaining shares of Jingchuan Diagnostics held by it, Wuhan Zhongjucheng filed a lawsuit with the People's Court of Wuhan East Lake High-tech Development Zone, requesting that Jidan Biotech be ordered to acquire 8.4 million shares of Jingchuan Diagnostics held by it in accordance with the law and bear the liability for breach of contract.
In November 2023, Jidan Biotech filed a counterclaim, requesting an order to terminate the agreement on the transfer of the remaining shares of the above-mentioned management shareholders.
In December 2023, Jidan Biotech filed a lawsuit against Jingchuan Diagnostics and Ma Xinxin, requesting that the defendant be ordered to provide the company with relevant operational and financial information from January 1, 2019 to the present, to order the defendant to resume docking with the company's financial system, and to order the defendant to cooperate with the company in auditing the financial situation in 2022 and up to the date of actual audit.
From December 2023 to January 2024, Hu Shujun, Guan Zhangrong, Wang Yuqiong, Ma Quanhai, Wu Yanfang, Ye Yanli, Rong Xiaoyuan, and Wuhan Boruihong Management Consulting Partnership (Limited Partnership) also filed a lawsuit against Jidan Biotech, requesting that Jidan Biotech be ordered to acquire part of the remaining shares of Jingchuan Diagnostics held by it in accordance with the law.
Jidan Biotech disclosed in its 2023 annual report that the above case has not yet produced a valid judgment.
Subsidiary's annual report "difficult birth"
In fact, in addition to the equity transfer lawsuit, the above-mentioned management shareholders of Jidan Biotech and Jingchuan Diagnostics also have intra-industry competition lawsuits.
On April 23 this year, Jingchuan Diagnostics issued an announcement that Wuhan Zhongjucheng, a minority shareholder of the company, as the plaintiff, initiated a civil lawsuit against the company's controlling shareholder, Jidan Biotech and its 9 directors, hoping that the court would confirm the existence of intra-industry competition between Jidan Bio and Jingchuan Diagnostics in accordance with the law and immediately stop the competition.
Wuhan Zhongjucheng pointed out in the complaint that on May 13, 2020, Jidan Biotech promised in the "Acquisition Report (Revised Draft)" disclosed by Jingchuan Diagnostics on the official website of the National Equities Exchange and Quotations System that it would not directly or indirectly engage in or participate in any business and activities that compete with Jingchuan Diagnostics' existing main business in China and abroad, or have the rights and interests of any economic entity, institution or economic organization that competes with Jingchuan Diagnostics. If any loss is caused to Jingchuan Diagnostics due to the violation of this commitment, it agrees to fully compensate Jingchuan Diagnostics for all losses suffered thereby.
However, since then, Jidan Biotech has registered the product of "Automatic Coagulation Analyzer (Class II Instrument)" in Jiangsu on August 11, 2022, with the registration number of "Su Machinery Injection 20222221624". This product is a similar product to the "Automatic Coagulation Analyzer" (Jaw Machinery Injection 20192222690) registered by Jingchuan Diagnostics in 2019, which is not only displayed on the official website of Jidan Biology, but also participated in the 33rd Medical Exhibition and other marketing activities as an exhibit of Jidan Biology; In addition, Jidan Biotechnology Co., Ltd. and its holding subsidiary, Jilin Jidan Biotechnology Co., Ltd., completed the registration and promotion of a number of similar products to Wuhan Zhongtai Biotechnology Co., Ltd., a wholly-owned subsidiary of Jingchuan Diagnostics, in 2022 and 2023.
Wuhan Zhongjucheng believes that the aforesaid behavior of Jidan Biotech and its subsidiaries has constituted intra-industry competition, violated relevant commitments, and harmed the interests of Jingchuan Diagnostics and the plaintiff, and should bear the liability for breach of contract.
Regarding this lawsuit, Jidan Bio said in its annual report that the company has not received the litigation materials and has not produced a valid judgment.
It is worth noting that due to this intra-industry competition dispute, Jingchuan Diagnostics' 2023 annual report failed to be reviewed by the board of directors and disclosed as scheduled.
According to the announcement issued by Jingchuan Diagnostics on April 26, when the company's board of directors reviewed the "Proposal on the Company's 2023 Annual Report and its Summary", the three directors of Jidan Biology, Su Enben, Ni Wen and Yan Bin, voted in favor, but requested to modify the relevant expression of "the actual controller or controlling shareholder has not fulfilled the commitment to compete in the same industry" in the annual report, on the grounds that this content does not conform to the basic facts and has no basis for identification, and the request is amended to "This content is currently in dispute, and the company has disclosed the relevant announcement, The final determination shall be subject to the determination of the judicial department or other third parties."
Ma Xinxin, the former actual controller and current director of Jingchuan Diagnostics, and Hu Shujun abstained from voting, on the grounds that due to the violation of commitments by the controlling shareholder and the new intra-industry competition issue, the company's minority shareholders have filed a lawsuit to the court, and the sponsoring brokerage has issued a work reminder, and the regulatory authorities have paid attention. However, at the meeting, the affiliated directors still did not agree with the content and requested that the content of the proposal be amended, so they abstained from voting in order to avoid false records, misleading statements and material omissions in information disclosure.
Jingchuan Diagnostics, which has a "difficult birth" in its annual report due to intra-industry competition disputes, has been suspended and is also facing the risk of downgrading or even delisting. The company continued to supervise the sponsoring brokerage Huaying Securities, which previously issued a risk warning, saying that due to the failure to release the annual report before April 30 (including that day), Jingchuan Diagnostics has the risk of being transferred out of the innovation layer. If the 2023 annual report cannot be disclosed before June 30 (inclusive), the company's shares are still at risk of being forcibly terminated.
The authenticity and accuracy of the data in the annual report are questionable
On May 9, Jingchuan Diagnostics said in a telephone interview with reporters that the company will, under the guidance of the sponsoring brokerage, promote the company's board of directors to actively communicate with the controversial disclosure content in the annual report, and complete the preparation of the 2023 annual report as soon as possible. ”
The "dystocia" of Jingchuan Diagnostic's annual report has also raised questions about the authenticity and accuracy of the annual report of Jidan Biology. A senior secretary of the board of directors of a listed company in South China told the "Economic Information Daily" reporter that in practice, the parent company of a listed company and a subsidiary listed on the New Third Board had better disclose the annual report on the same day. If it cannot be disclosed at the same time, it is best for the subsidiary listed on the New Third Board to disclose the annual report first, and the parent company of the listed company to disclose the indicative announcement at the same time. If the holding subsidiary has not formally disclosed the financial data, the authenticity, accuracy and completeness of the consolidated financial statements of the listed company as the parent company should be questioned.
The reporter of "Economic Information Daily" checked the 2023 annual report of Jidan Biology and found that in the "Analysis of Major Holding and Shareholding Companies" chapter of the company's annual report, the assets and performance of 14 holding subsidiaries were disclosed, but Jingchuan Diagnostics, which would also be disclosed in previous years, was not among them. According to the guidelines for the content and format of annual reports revised and issued by the China Securities Regulatory Commission in 2021, listed companies should introduce in detail the main business, registered capital, total assets, net assets and net profit of major subsidiaries in the "Analysis of Major Holding and Shareholding Companies".
On May 9, the reporter of the "Economic Information Daily" called Jidan Biology, and the staff of the company's board secretary office told reporters that the consolidated financial statements disclosed in the company's annual report contain the financial data of Jingchuan Diagnostics, but the assets and performance of Jingchuan Diagnostics do not belong to the mandatory disclosure content, and the company can choose whether to disclose it independently, and will make an announcement if it meets the mandatory disclosure standards.
"Jingchuan Diagnostics has not disclosed the audited 2023 annual report, which brings three questions to the consolidated financial statements disclosed by Jidan Bio a few days ago: First, is the draft accounting statement before the audit of Jidan Bio or the accounting statements that have been audited but not officially released to the public? Second, is the source channel of Jingchuan Diagnostics' 2023 annual report merged by Jidan Biology legal and compliant? Third, is the data of the 2023 financial statements of the consolidated Jingchuan Diagnostics of Jidan Bio true and legitimate? Liu Zhigeng, a well-known financial and tax audit expert, believes that because the 2023 annual report of Jingchuan Diagnostics has not been officially disclosed, investors will not be able to judge the authenticity and accuracy of the financial data of Jingchuan Diagnostics' annual report, which will inevitably affect the authenticity and accuracy of the annual report data of Jidan Biology.
The staff of the above-mentioned secretary office of the board of directors of Jidan Biology replied to the reporter of the "Economic Information Daily" on the phone that the financial data of Jingchuan Diagnostics used by the company can ensure that it is true, accurate and complete, and the company's annual report is also disclosed in accordance with the requirements of the exchange. Regarding the latest progress of the dispute between Jidan Biotechnology and Jingchuan Diagnostics and management shareholders, the staff member said that the company's announcement shall prevail.
Liu Zhigeng further pointed out that disputes like this between Jidan Biotech and Jingchuan Diagnostics and its management shareholders are not unique in the A-share market. In practice, many listed companies often have inherent deficiencies in investment and M&A, corporate governance, internal control and other aspects, and it is inevitable that conflicts and even litigation will eventually arise. But the problem is that this will not only affect many small and medium-sized investors, but more seriously, it will also affect the stable and healthy development of the entire capital market, damaging the image of the mainland capital market. (Reporter Wang Xingliang reported from Wuhan)
Source: Economic Information Daily