Shao Xue, chairman of Huayu Software, was investigated for the latest progress: the bribery of the unit involved was criminally detained, and the stock price has fallen by more than 30%.

21st Century Business Herald reporter Yang Ping reported from Shenzhen

23 days after disclosing material matters, Hoau Software (300271. SZ) and its chairman have made new progress in the investigation.

On the evening of September 21, Huayu Software announced that on September 18, the company received the "Notice of Lifting The Retention in Custody" from the Beijing Municipal Commission of Supervision, the main content of which was: Decision to lift the lien measures for the person under investigation, Shao Xue. At the same time, the company learned that Shao Xue's family received the "Notice of Detention" from the People's Procuratorate of Haidian District, Beijing, the main content of which is: Shao Xue was criminally detained on September 18, 2021 for suspected bribery by the unit.

This news also means that Hoau Software may therefore have the subsequent risk of involving litigation.

The clock was turned back to the evening of August 29, because Chairman Shao Xue could not perform his duties normally on the board of directors deliberating the relevant proposals for the 2021 semi-annual report, Huayu Software disclosed the news that Shao Xue was investigated for suspected bribery and was placed in lien since March 21, 2021.

As for why the listed company learned on March 22, 2021 that the chairman of the board of directors had been investigated and retained, and only disclosed it on the evening of August 29, Huayu Software said that according to the CSRC's "Measures for the Administration of Information Disclosure of Listed Companies (Revised in 2021)" (hereinafter referred to as the "Xinpi Management Measures"), "the company's controlling shareholders, actual controllers, directors, supervisors, Senior managers suspected of serious violations of discipline or law or crimes abusing public office have been placed in custody by discipline inspection and supervision organs and affect their performance of their duties"shall be disclosed immediately.

However, this statement does not seem to be recognized by investors, and over the past few days, some market participants have repeatedly questioned the practice of Hoau Software. Earlier, lawyers initiated and initiated a pre-registration of investor claims.

"Although there is room for justification at the level of the Administrative Measures for Information Disclosure of Listed Companies, It is absolutely untenable at the level of the Rules Governing the Listing of Stocks on the Growth Enterprise Market (revised in December 2020)." Wu Feng, a partner at Beijing Langcheng Law Firm, pointed out to the 21st Century Business Herald reporter.

According to Paragraph 10 of Article 8.2.5 of the Rules Governing the Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange (revised in December 2020) (hereinafter referred to as the "GEM Listing Rules"), "the directors, supervisors and senior management of the company are unable to perform their duties normally, or have been investigated or taken compulsory measures by the competent authorities for suspected violations of laws and regulations, or have been subject to major administrative penalties or criminal penalties" shall be disclosed immediately.

Judging from the above regulations, there is a "choice relationship" between "inability to perform duties normally" and "being investigated and taking compulsory measures by the competent authority for suspected violations of laws and regulations", and should be disclosed immediately as long as it is investigated by the competent authority for suspected violations of laws and regulations and compulsory measures are taken.

Another detail is that during Shao Xue's lien period, Huayu Software organized two board meetings and two shareholders' meetings, but Shao Xuedu was authorized to entrust director Zhao Xiaoming to exercise his voting rights, and the shareholders' meeting was presided over by director Wang Yan.

According to Article 27 of the Rules of the General Meeting of Shareholders of Listed Companies and Article 68 of the Articles of Association of Huayu Software, the general meeting of shareholders shall be presided over by the chairman of the board. When the chairman of the board of directors is unable to perform his duties or does not perform his duties, he shall be presided over by a director jointly elected by more than half of the directors.

During this period, Huayu Software organized two shareholders' meetings, both of which were presided over by Wang Yan, a director elected by more than half of the directors. Obviously, Shao Xue's retention in custody affected his performance of his duties, and Huayu Software explained that 'during shao Xue's lien investigation, he was able to perform his duties' is also inconsistent with the facts. Wu Feng said. It is worth mentioning that shortly after the chairman was investigated by the chairman of the case, Hoau Software itself also received a notice of investigation from the Beijing Municipal Commission of Supervision on September 1, citing "the violation of discipline/law by suspected bribery by the unit".

As for whether the investigation was related to Shao Xue's suspected bribery, Huayu Software said that it could not be confirmed for the time being and could not judge the possible impact of the company's investigation for the time being.

In addition, since the company disclosed the "Announcement on Major Events of the Company" on August 30, the company has conducted a comprehensive self-examination of the subsidiaries of the whole group, and it has been found that the former executives of the subsidiaries have recently been taken criminal compulsory measures by the relevant departments. The party was a former executive of beijing Huayu Information Technology Co., Ltd., a subsidiary, and is no longer in a management position.

Wu Feng further added that on September 1, Huayu Software also received the "Notice of Case Filing and Investigation" from the Beijing Municipal Supervision Commission that decided to file a review/investigation into the disciplinary/illegal issues of bribery by its suspected units, which had a very significant impact on Huayu Software, which may face the legal risk of unit crimes, and there is also a risk of being sentenced to criminal punishment for the directly responsible executives and other directly responsible personnel involved, which will directly affect the company's operation and development of Huayu Software.

In the secondary market, Huayu Software has already encountered the market "voting with its feet", since the disclosure of the news on the evening of August 29, as of the close of September 17, the stock price of Huayu Software has fallen by 33.78%, and the total market value has been less than 10 billion yuan, only 9.868 billion yuan.

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