Inflate the profit amount by half! St. Bolong's actual controller couple may be banned for life

            Dot blue letter attention, do not get lost~

St. Bolong, who staged the sky floor on October 28, rose again on October 29, closing up 5.14%, and was quoted at 3.07 yuan per share. St. Bolong, which has 5 days and 3 boards, has risen by 28.45% in the past 20 trading days.

On the evening of October 29, ST Bailong issued an announcement that the company received administrative penalties from the China Securities Regulatory Commission, and that Chen Weixiong, then chairman of the company, and Chen Nana, then vice chairman of the company, were banned from the market for life because of the particularly serious illegal acts, and the two were fined 5 million yuan each.

Inflate the profit by half

ST Bailong once used the name Bai Baolong, the main business is clothing design, according to customer needs to provide supporting organization production of the company's design style, Chen Weixiong and Chen Nana are the actual controllers, the two serve as the chairman and general manager of the company respectively.

The announcement shows that from 2013 to 2018, Bai Baolong's cumulative inflated operating income was 1.276 billion yuan, and the cumulative inflated profit was 4.10 yuan. Among them, from 2014 to 2016, the company's inflated profit accounted for more than half of the total profit of the year. In 2015, the inflated profit was 0.96 billion yuan, accounting for 68.25% of the total profit of the current period; from January to September 2016, the company inflated its operating income by 208 million yuan and the total inflated profit by 0.65 billion yuan, accounting for 69.43% of the total profit of the current period. In the above two time periods, the proportion of inflated profits is close to 70%. Since its listing, the company's actual net profit has not exceeded 100 million yuan.

In addition, Bo Baolong is also suspected of falsely recording bank deposits by forging account receipts and not recording funds in and out of accounts. From 2012 to 2019, Bo Baolong falsely recorded that the bank deposits were 72.17 million yuan, 228 million yuan, 261 million yuan, 434 million yuan, 737 million yuan and 1.097 billion yuan, accounting for 16.84%, 20.63%, 39.07%, 20.80%, 29.26%, 24.38% and 34.93% of the total assets of BoBaolong at the corresponding end of the period, respectively.

In June 2015, Bo Baolong landed on the Shenzhen Stock Exchange, which also means that there are false records in its initial public offering prospectus (reporting period 2012 to 2014), 2016 non-public offering stock issuance report and listing announcement (reporting period 2013 to January to September 2016), and annual reports for 2015, 2018 and 2019.

In addition to the false records, the Shenzhen BaibaoLong Global Project under construction of Shenzhen Baibaolong Global Joint Design Co., Ltd., a subsidiary of Bobaolong, has accumulated a total of 330 million yuan in advance payments for the project, of which 283.5 million yuan was eventually transferred to the bank account controlled by Bobaolong, but Bobaolong did not truthfully disclose the use of the raised funds in the annual report.

In the end, due to The financial fraud of Bo Baolong, the parties Chen Weixiong and Chen Nana were banned from the market for life and fined 5 million yuan respectively. Wang Qi, the financial director at the time, took 10 years of market access ban and imposed a fine of 3 million yuan.

Cash out

The tide receded, and ST Bolong's performance shrank severely. According to the financial report, in the third quarter of 2021, ST Bailong's operating income was 14.43 million yuan, down 90.71% year-on-year; the net loss was 2.23 million yuan, down 184.82% year-on-year. In the first three quarters, the company's operating income was 112 million yuan, down 81.07% year-on-year; net loss was 0.42 billion yuan, down 131.06% year-on-year.

Since 2019, the company's revenue and net profit have both declined, and its performance in 2020 has continued to decline, and it "wears a hat" in April this year. According to the first three quarters, ST Bolong is more difficult to turn a loss into a profit.

It is worth noting that before the performance decline, the concerted action of the actual controllers Chen Weixiong and Chen Nana had already cashed out and left the market.

In 2015, Chen Weixiong and Chen Nana respectively donated some shares to their respective fathers Chen Qiuming and Chen Changxiong, and after the listing of Bai Baolong in 2016, Chen Qiuming and Chen Changxiong each held 150 million shares, accounting for 4.17% of the total share capital, and the two also became the top ten shareholders of the company.

From March 2019 to February 2020, in less than a year, Chen Qiuming and Chen Changxiong reduced their holdings by a total of more than 300 million shares through several reductions, all of which have cashed out.

At the same time, as of the end of the third quarter, Chen Weixiong and Chen Nana held 38.12% of the company's shares. Compared with the 73.16% of the shares held by the two people at the time of listing, the shareholding ratio of the two people has been reduced by nearly 50%.

For shareholders, the leak in the house is windy and rainy overnight. ST Bailong also issued an announcement on the evening of October 29 that some of the company's raised funds were deducted. Because Chen Weixiong, Chen Nana and other 6 directors violated the prescribed procedures to provide pledge guarantees for the company's 470 million yuan of bank wealth management products to other parties' loans, and the guaranteed party's solvency was insufficient, Haikou United Rural Commercial Bank forcibly withheld 410 million yuan of the company's bank wealth management products, and the remaining 60 million yuan is currently frozen by the Guangzhou Tianhe People's Court.

The time is right for shareholder claims

On October 29, a lawyer at a law firm posted a claim at the stock bar, with the claim condition being "to buy Bo Baolong shares before March 18, 2021, and to sell or hold the shares after March 18, 2021".

On March 18 this year, Bai Baolong received the "Notice of Investigation" from the China Securities Regulatory Commission, and the China Securities Regulatory Commission decided to file an investigation against the company because of the company's suspected violations of laws and regulations on information disclosure.

In accordance with China's securities litigation laws and regulations, investors of listed companies who have been investigated by the CSRC and imposed administrative penalties may make claims in accordance with law. After the administrative penalty is issued, the court will accept the investor's claim lawsuit.

As the SFC has not yet made a formal penalty decision, investors are currently only pre-registering their rights protection claims.

Editor: Wan Jianyi

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