The fine will land and be publicly condemned King Kong Glass will welcome shareholders to defend their rights

King Kong Glass (300093) has been a bit annoyed recently, the company's net profit is expected to decrease by more than 900% last year, and when the performance was dismal, it also received a prior notice of administrative penalties from the CSRC and a public reprimand from the exchange, which can be described as "the roof leak is in the overnight rain". The "Investment Express" reporter learned from a number of securities rights protection lawyers that after the formal administrative fines against the company landed, many damaged shareholders will launch rights protection claims.

Three cases of letter violation will be subject to a ticket

According to the announcement, on March 23, 2020, Diamond Glass received the "Advance Notice of Administrative Penalties and Market Prohibition of the Guangdong Regulatory Bureau of the China Securities Regulatory Commission" [2020] No. 9 (hereinafter referred to as the "Advance Notice") issued by the Guangdong Regulatory Bureau of the China Securities Regulatory Commission.

The "Prior Notice" pointed out that the Guangdong Regulatory Bureau of the China Securities Regulatory Commission has completed its investigation into the suspected violation of laws and regulations on information disclosure of Diamond Glass, and after investigation, Diamond Glass is suspected of having three illegal acts: (1) Diamond Glass has inflated operating income, interest income and operating profit between 2015 and 2017, and there are false records in the 2015 semi-annual report, 2015 annual report, 2016 semi-annual report, 2016 annual report, 2017 semi-annual report and 2017 annual report; Diamond Glass inflated monetary funds between 2015 and 2016, and there were false records in the 2015 annual report and 2016 annual report; (3) Diamond Glass did not disclose the related party transactions of non-operating occupied funds of related parties in accordance with the regulations between 2016 and 2018, and there were material omissions in the 2016 annual report, 2017 annual report, 2018 semi-annual report and 2018 annual report.

In this regard, the Guangdong Supervision Bureau of the China Securities Regulatory Commission intends to order corrections to King Kong Glass, give a warning, and impose a fine of 600,000 yuan; Zhuang Dajian was given a warning, fined 300,000 yuan and banned from the securities market for 10 years; Lin Yangxian was given a warning, fined 200,000 yuan and banned from the securities market for 5 years; Lin Wenqing and Lin Zhen were given warnings and fined 100,000 yuan; Luo Weiguang, Su Peiyu, Fan Bo, Luo Jiaxian, Yang Shiqing, Cai Xiang, Lu Xiawei, Chen Xiaowei, Zheng Hongsheng, Zhang Jianhua, An Jishen, He Qing, Xiao Hua, and Lin Shunfu were given warnings and fined 50,000 yuan each; Lin Weifeng, Zhi Yi, Zhuang Yuxin, Liang Yanmei, Xiao Weihong, and Chen Weiying were given warnings and fined 30,000 yuan each.

In this regard, the rights defense lawyer told reporters that once the formal administrative fine against the company landed, King Kong Glass will also usher in a large-scale civil securities claim. Investors who purchased Diamond Glass between August 21, 2015 and January 24, 2019 and still hold or sell losses after January 25, 2019 are advised to be prepared to sue.

Again publicly reprimanded by the exchange

In fact, the troubles of Diamond Glass are not over. Just a few days after receiving the penalty notice, on March 27, the company again issued a notice saying that the company and related parties were recently disciplined by the Shenzhen Stock Exchange for illegal acts.

The announcement shows that it has been found that there are three types of violations in Diamond Glass and related parties: non-operating transactions with related parties constitute capital occupation and illegal financial assistance; The 2018 annual financial accounting report was issued by a certified public accountant with an audit report that could not express an opinion; The financial reports from 2015 to 2017 were corrected for errors, and the net profit attributable to the shareholders of the listed company was reduced by 79.7832 million yuan, 61.3862 million yuan and 12.3134 million yuan, respectively, and the proportion of the reduction amount to the corrected net profit was 106.15%, 108.26% and 220.05% respectively.

The above-mentioned violations of Diamond Glass violated the relevant regulations of the Shenzhen Stock Exchange, and in the end, the Shenzhen Stock Exchange decided to give a public reprimand to Diamond Glass and Lin Wenqing, deputy general manager and then director of the company, and Lin Yangxian, financial director.

Net profit expected to decrease by more than 900% year-on-year

According to public information, Diamond Glass is a special glass production company, the company's products are mainly divided into two categories of security glass and photovoltaic building components, mainly used in large public building facilities, some products are used in special vehicles, ships, rail transit industry. Safety and security glass is mainly fireproof glass and explosion-proof glass. Photovoltaic building modules are mainly double-glass photovoltaic building modules. The company is a leading enterprise in the domestic glass deep processing industry, and a key high-tech enterprise of the National Torch Plan for china's high-tech special glass products.

On February 28, 2020, Diamond Glass released the 2019 annual performance express, which showed that Diamond Glass's operating income and profit in 2019 have dropped significantly. In 2019, the company achieved operating income of 612,769,304.55 yuan, a decrease of 16.93% over the same period last year; Achieved operating profit of -108,978,542.01 yuan, a decrease of 703.65% over the same period last year; Total profit - 110,065,465.66 yuan, a decrease of 676.29% over the same period last year; Net profit attributable to shareholders of listed companies was RMB101,473,880.93, a decrease of 901.95% over the same period last year.

Regarding the reasons for the sharp decline in the company's operating income and profit, King Kong Glass said that it was mainly the company's adjustment of accounts receivable, bad debts and assets in accordance with the requirements of the "Accounting Standards for Business Enterprises" and other relevant provisions, and based on the principle of prudence, and the provision for accounts receivable, bad debts and asset impairment, and the total operating income declined; Affected by domestic and foreign market conditions and some engineering projects, the company's overall gross profit margin fell sharply, and profits decreased.