Public condemnation! The performance pledge party "broke its promise" and also led to an IPO company

A few days ago, Jiangsu Boxin Investment Holding Co., Ltd. (stock abbreviation: *ST Boxin; Stock Code:600083. SH), the counterparty of the major asset restructuring transaction, Wang Fei, was publicly reprimanded by the Shanghai Stock Exchange for failing to fulfill the performance commitment compensation obligation as required. We found that Wang Fei, the central figure in this case, seems to be involved in a former IPO company.

Source: Photo.com

If the promised performance is not achieved, the contracting party refuses to perform the compensation obligation

On July 29, 2024, the Shanghai Stock Exchange publicly reprimanded Wang Fei, the counterparty of *ST Boxin's major asset restructuring transaction, for failing to fulfill the performance compensation commitment as agreed when the underlying assets failed to achieve the performance commitment, which seriously damaged the legitimate rights and interests of the listed company and investors.

The disciplinary action can be traced back to September 2021, *ST Boxin acquired 51% of the equity of Jiangxi Qianping Machinery Co., Ltd. (hereinafter referred to as Qianping Machinery) through a wholly-owned subsidiary, Hangzhou Xindunbao Equipment Co., Ltd. (hereinafter referred to as "Xindunbao"), by way of agreement transfer and cash capital increase. Xindun Bao paid 98 million yuan in cash to purchase the registered capital of 14.5092 million yuan of Qianping Machinery held by Wang Fei, and then increased the capital of Qianping Machinery by 151.5 million yuan at the same price as the agreement transfer, and subscribed to its new registered capital of 22.4301 million yuan. After the completion of the transaction, Xindun Bao holds a total of 51% of the equity of Qianping Machinery, and Qianping Machinery has become a holding subsidiary of *ST Boxin, and this transaction constitutes a major asset restructuring.

From 2019 to the first quarter of 2021, Qianping Machinery achieved operating income of 57.5172 million yuan, 136.0558 million yuan and 43.3229 million yuan, and net profit of 14.617 million yuan, 55.4623 million yuan and 19.7614 million yuan respectively.

Wang Fei promised to *ST Boxin and Xindun Bao that the non-net profit deducted from the consolidated statements of Qianping Machinery in 2021, 2022 and 2023 will not be less than 65 million yuan, 70 million yuan and 75 million yuan respectively. During the commitment period, if the cumulative profit of Qianping Machinery does not reach the promised profit, Wang Fei shall make cash compensation to *ST Boxin.

In the year of completion of the acquisition, Qianping Machinery achieved a net profit of 69.7002 million yuan, with a performance completion rate of 107.23%. However, in 2022, affected by the fluctuation of the wind power industry, the project operating rate will decline, and at the same time, the logistics and transportation costs will increase, and Qianping Machinery will only achieve a non-net profit of 37.8951 million yuan, and the promised completion rate will only be 54.14%. In the current period, *ST Boxin made an impairment provision of 9.4265 million yuan for the goodwill formed by the acquisition of Qianping Machinery.

In 2023, with the increase in the vacancy time of some operating lease equipment, the decrease in occupancy rate, and the year-on-year decrease in the average monthly rent of orders, Qianping Machinery will achieve a net loss of 151.8312 million yuan, a difference of 226.8312 million yuan from the promised profit. According to the calculation of the "Profit Commitment and Compensation Agreement", the total amount of performance commitment compensation is 85.3618 million yuan, deducting the company's unpaid equity transfer amount of 20.3 million yuan, Wang Fei needs to pay 65.0618 million yuan of performance commitment compensation to *ST Boxin.

On May 23, 2024, *ST Boxin announced that according to the "Profit Commitment and Compensation Agreement", Wang Fei should pay the compensation directly to the company within 15 working days after the issuance of the "Special Audit Report on the Realization of Performance Commitments", and the company has sent a "Performance Notification Letter" to Wang Fei, requiring him to fulfill his compensation obligations as agreed, but as of May 21, 2024, the company has not received the performance commitment compensation of 65.0618 million yuan that Wang Fei should pay.

Recently, Xindun Bao filed a lawsuit with the People's Court of Shangcheng District, Hangzhou, demanding that Wang Fei pay 65.0618 million yuan in compensation for performance commitments and 1.2362 million yuan in liquidated damages, which has been accepted by the court.

The defaulting party pulled out an IPO company, and twice hit the listing without success

It is worth mentioning that Wang Fei, who was disciplined by the exchange this time, was also involved in a company that had twice hit the IPO - Zhejiang Jifeng Geotechnical Technology Co., Ltd. (hereinafter referred to as Jifeng Geotechnical).

According to the data, in 2010, Wang Fei and Jifeng Geotechnical jointly established Zhejiang Dingfeng Equipment Leasing Co., Ltd. (hereinafter referred to as Dingfeng Equipment), with Jifeng Geotechnical holding 90% of the shares, Wang Fei holding 10% of the shares and serving as the general manager. Dingfeng Equipment is mainly engaged in the leasing business of large-scale crawler lifting equipment, covering medium and large tonnage crawler cranes, rotary drilling rigs and other subdivisions, which are used in the hoisting field of large equipment such as wind power and nuclear power, and have established long-term cooperation with customers such as China Nuclear Machinery Engineering Co., Ltd. and PowerChina Nuclear Power Engineering Company. In 2015, Dingfeng Equipment changed its name to Zhejiang Jifeng IOT Technology Co., Ltd. (stock abbreviation: Jifeng IOT; Stock Code:833834. NQ) and listed on the New Third Board.

However, since the listing of the New Third Board, Jifeng IOT has not reached the expected financing target. In March 2018, Jifeng IOT decided to adjust its plan, find new financing channels, and terminate its listing on the New Third Board. Shortly after the delisting of Jifeng IOT, in September 2018, Zhao Mouying and Zhao Mouwei invested in the establishment of Qianping Machinery, and in April 2020, Wang Fei transferred the equity held by Zhao Mouying and became the controlling shareholder of Qianping Machinery. It is worth noting that whether it is the main business, or the main customers and suppliers, Jifeng IOT and the later Qianping Machinery are highly overlapped.

At the same time, we found that the contact number recorded in Qianping Machinery's 2023 industrial and commercial annual report is the same as that of Yongfeng County Yongjiu Investment Center (Limited Partnership), which is 90% owned by Chen Wantian, who is the second largest shareholder of Jifeng Geotechnical and serves as the chairman and general manager of Jifeng Geotechnical.

Jifeng Geotechnical is mainly engaged in two major businesses: foundation and foundation engineering and construction materials leasing services. In November 2011, in order to motivate middle and senior managers, Jifeng Geotechnical decided to increase the capital of the company by Wang Fei, general manager of Jifeng IOT, a subsidiary, and Wang Fei entered the ranks of shareholders of Jifeng Geotechnical.

In January 2016, Jifeng Geotechnical's IPO on the main board of the Shenzhen Stock Exchange was accepted. At the 89th meeting of the Issuance Examination Committee in 2017, the Issuance Examination Committee focused on the adequacy of the company's accounts receivable collection risk and bad debt provision, the reasonableness of the downward trend in the average salary of employees, and the occupation of funds by related parties.

In April 2018, Jifeng Geotechnical signed a counseling agreement with Citigroup Orient Securities, and once again hit the IPO, intending to change lanes to be listed on the main board of the Shanghai Stock Exchange. However, the IPO was still unsuccessful, and in January 2020, based on the strategic development needs of Jifeng Geotechnical, Citigroup Orient Securities decided to terminate the counseling. Up to now, Jifeng Geotechnical does not seem to have launched a listing plan.