ST Bailong was banned for life by 28.5 million pre-punished actual controller couples! Seven years of financial fraud in the listing "with illness", shareholder claims are in full collection

More than seven months after the suspected violation of the law and regulation of Xinpi was filed and investigated, ST Bailong (002776) announced that on October 28, 2021, the company and 8 parties received the CSRC's "Prior Notice of Administrative Penalties and Market Prohibition", and intended to decide to order Bai Baolong to make corrections, give a warning and impose a fine of 10 million yuan; give a warning and impose a fine of 5 million yuan on chen Weixiong, then chairman of the board, Chen Nana, then vice chairman and general manager; Wang Qi, then financial director, Lin Xiaoru, then supervisor, and deputy general manager at the time 6 people, including the secretary of the board of directors and director Jiang Weirong, gave warnings and imposed fines of 500,000-3 million yuan. At the same time, it is planned to adopt lifelong market entry ban measures for Chen Weixiong and Chen Nana, and 10, 5, and 5 years for Wang Qi, Jiang Weirong, and Lin Xiaoru respectively.

Wu Lijun, a lawyer who represents The Claims of Shanghai Oriental Cambridge Law Firm, believes that ST Bailong should soon receive a penalty decision, and investors who have been harmed by their misrepresentation can claim compensation according to law. Guosen Securities is the listing sponsor of the company, its review of the fraudulent listing of Bo Baolong is not strict, it has not fulfilled its diligence and sponsorship obligations, investors can require Guosen Securities to be 100% joint and severally liable for the plaintiff's losses in addition to the refund of all the sponsorship fees and other listing fees collected, even if Bo Baolong has no ability to pay or bankruptcy reorganization, it will not affect the compensation obligation of Guosen Securities. Reminder To those investors who bought Bo Baolong shares between June 10, 2015 and March 18, 2021 and still have shares held on the evening of the end of the period, they can send the shareholder's name, telephone number, stock name, and quantity to submit a claim to join the claim.

According to the CSRC's findings, the facts of Bo Baolong's suspected violation of the law are as follows:

(1) From 2013 to 2018, Through fictitious clothing design and production business with a company and its related party, Wanjielong Group and its related party Wanjielong E-commerce, Bobaolong accumulated inflated revenue of 1.276 billion yuan, total profit of 410 million yuan (accounting for the lowest proportion of total disclosed profits, the highest 69.43%) and net profit of 356 million yuan. From 2012 to 2019, Bai Baolong was suspected of falsely recording bank deposits of at least 74 million yuan and up to 1.098 billion yuan by forging account receipts and not recording funds in and out of the account, accounting for a minimum of 16.84% and a maximum of 39.07% of the total assets disclosed. As a result of the above, there are false records in the prospectus of the initial public offering of shares of Bo Baolong, the report and listing announcement of the 2016 non-public offering of shares, and the annual report of 2015-2019.

(2) Shenzhen Bobao Dragon Clothing Global Project, a project under construction by a subsidiary of Bobaolong, prepaid 110 million yuan and 220 million yuan (raised funds) of 110 million yuan and 220 million yuan (raised funds) in 2017 and 2018 respectively, of which 283.5 million yuan was finally transferred to the bank account controlled by Bobaolong for the purpose of extracorporeal capital circulation and other purposes. In the 2017-2019 annual report, Bo Baolong did not truthfully disclose the above-mentioned prepaid project funds, but presented them as other non-current assets; in the 2018 annual report, it did not truthfully disclose the use of the raised funds.

(3) Between August 2018 and October 2020, Bai Baolong provided 33 pledge guarantees for third-party loans with the time certificate of deposit of Haikou United Rural Commercial Bank, with a total guarantee amount of 1.1 billion yuan. As of the end of April 2021, 750 million yuan of guarantee liability has been released, and the remaining guarantee amount is 350 million yuan. Bai Baolong did not disclose the above-mentioned illegal guarantee matters in a timely manner, and did not disclose them in the 2018 annual report, 2019 semi-annual report, 2019 annual report, and 2020 semi-annual report; the 2020 annual report announced 470 million yuan of external guarantees, but still did not disclose 11 external guarantees totaling 340 million yuan.

According to the data, Bo Baolong was listed in June 2015, mainly engaged in the creative design of clothing and providing customers with vertical integration services such as fabric research and development, sample preparation, and organization of production. The company made consecutive profits from 2015 to 2019, exposed a loss of 317 million yuan in 2020, a continuous loss of 43.4247 million yuan in the first three quarters of this year, and a net asset per share of 3.71 yuan at the end of the period (9.47 yuan in the 2015 annual report).

According to the penalty notice, in the first four years of listing (2015-2018), a total of 248 million yuan of net profit was inflated, while the net profit disclosed in the same period was only 560 million yuan, and the nearly 45% performance injection was self-evidently misleading to investors' trading decisions. The "good means" of the major shareholders suspected of "de-related relations" are still bleeding from listed companies.

According to the latest announcement on October 30, of the 470 million yuan of bank wealth management products that Bai Baolong was illegally used to pledge external guarantees, 410 million yuan had been forcibly deducted by the bank to offset the debt, and the remaining 60 million yuan was frozen by the court. Some market analysis pointed out that most of the guaranteed parties involved in the case were related suppliers of the actual controller, and with the transfer and occupation of more than 2 billion yuan of loans, 290 million yuan of epidemic prevention materials procurement (after the provision for impairment of 266 million yuan) and hundreds of millions of yuan of raised funds from these suppliers, more than 2 billion yuan of funds have flowed out of the listed company.

In the secondary market, ST Bailong's stock price had a market value of 19.4 yuan in 2016 and a market value of more than 10 billion yuan, and after April 2019, the shock disk has fallen so far. After the case was investigated in March this year, the stock price once hit a new low of 2.03 yuan. On October 29, ST Bailong closed at 3.07 yuan, less than one-sixth of the historical high, and the latest market value of 1.652 billion yuan shrank by more than 8 billion yuan from the peak. At the end of September this year, the company had 24,229 shareholders.

According to the Securities Law and relevant judicial interpretations, the lawyer reminds that the civil claims of investors against ST Bailong and the liability intermediary have been put on the agenda, and those who bought the stock between June 10, 2015 and March 18, 2021 and still hold it on the evening of March 18, 2021, can register to join the claim before the securities network or Wu Lijun's blog to prepare for the claim to be repaired according to law. At the end of March 2021, the number of shareholders of the company was 38,672.