Zhang Wei, the actual controller of Hesheng New Materials and the "black boss", was sentenced to life imprisonment and fined 12.17 million

Per reporter: Huang Xinlei Per editor: Liang Xiao

Today (May 31st) evening, Hesheng New Materials (002290, sz) announced that the company's actual controller Zhang Wei has been sentenced by the Shenzhen Intermediate People's Court in Guangdong Province: Zhang Wei has committed the crime of organizing and leading a mafia-type organization, illegally absorbing public deposits, forced trading, intentional injury, illegal detention, fraud, extortion, gathering crowds to fight, picking quarrels and provoking troubles, allowing others to take drugs, bribery, several crimes, and decided to carry out life imprisonment and deprive political rights for life. He also confiscated all personal property and fined him 12.17 million yuan.

"Daily Economic News" previously reported that Zhang Wei, the actual controller of Hesheng New Materials, set up the "88 Fortune Network" network financing platform, fictitious investment projects, illegally absorbed public deposits, obtained huge funds and then used them for high-interest lending for profits, and used violent means such as posing for collection, illegal detention, and picking quarrels and provoking troubles to force collection.

On May 31, the stock price of Hesheng New Material closed at 7.13 yuan / share, a slight decline of 0.70%.

In 2015, Shenzhen Zhongkechuang Asset Management Co., Ltd. (hereinafter referred to as Zhongkechuang Assets), a subsidiary of Zhang Wei, entered Hesheng New Materials through the transfer of shares. In 2016, Zhongkechuang Assets continued to increase its holdings in Hesheng New Materials through secondary market transactions, block transactions and participation in fixed increases. In October of that year, the controlling shareholder and actual controller of Hesheng New Materials changed, and Zhongkechuang Assets became the controlling shareholder.

According to the announcement released by Hesheng New Material on May 6, Zhongkechuang Assets holds 77.6679 million shares of Hesheng New Material, with a shareholding ratio of 32.00%. On April 28, the shares of the listed company held by Zhongkechuang Assets were frozen by the Intermediate People's Court of Zhengzhou City, Henan Province, for 36 months, while before that, the above-mentioned shares were frozen or frozen by the Longgang Branch of the Shenzhen Municipal Public Security Bureau, the Intermediate People's Court of Zibo City, and the Intermediate People's Court of Hangzhou City, Zhejiang Province.

In this regard, Hesheng New Materials said that the judicial freezing of the company's shares held by the company's controlling shareholder, Zhongkechuang Assets, will not affect the normal production and operation of the company. In the future, if the shares of the company held by the controlling shareholder are judicially disposed of, there may be a risk of change in the actual control of the company.

According to the announcement released by Hesheng New Materials today (May 31), the Criminal Judgment (2020) Yue 03 Xingchu No. 487 issued by the Intermediate People's Court of Shenzhen Municipality, Guangdong Province, shows that the public security organs will continue to recover Zhang Wei's illegal gains in the crimes of forced trading, extortion, fraud and other crimes in this case in accordance with the law, and the direct economic losses caused to the relevant victims will be refunded by Zhang Wei in accordance with the law; the illegal gains of Zhang Wei for crimes such as illegally absorbing deposits from the public, as well as the "routine loans" used in this case. The principal amount of the crime shall be confiscated after compensating the victims for their losses in accordance with law; the property and proceeds accumulated by Zhang Wei's organization, the mafia-type organization and Zhang Wei himself as a result of the criminal activities of the mafia-type organization shall continue to be recovered in accordance with law. The mobile phones and other crime tools seized by Zhang Wei in the case shall be confiscated in accordance with law; the property belonging to defendant Zhang Wei that has been sealed, frozen, or seized in the case shall be confiscated in accordance with law.

According to the 2020 annual report, Hesheng New Material achieved operating income of 1.822 billion yuan last year, net profit attributable to shareholders of listed companies of 55 million yuan, and most of the revenue was contributed by the home appliance composite materials business. Since January 2019, the Company has not carried out new factoring business except for the collection of principal and interest of factoring receivables. As of the end of 2020, the balance of principal and interest receivables of the company was 859 million yuan, the provision for bad debts was 858 million yuan, and the net book value was 1.1012 million yuan.

On April 18, Hesheng New Material replied to the inquiry letter of the 2020 annual report of the Shenzhen Stock Exchange, saying that as of the end of 2020, the monetary fund balance of Hesheng New Material was 254 million yuan, the balance of short-term borrowings was 601 million yuan (including 956,900 yuan of interest payable), the asset-liability ratio was higher, the quick ratio was low, the short-term debt repayment ability was weak, and the short-term debt risk was higher.

However, Hesheng New Material said that this will not have a significant impact on the company's production and operation, because after the suspension of the company's factoring business, the company's home appliance composite materials business is still operating normally, and the operating income, gross profit margin, cash flow from operating activities, etc. have grown steadily; the company's customer structure, supplier settlement conditions, personnel structure, etc. have not undergone adverse changes. The company still has three factories and office buildings, one of which is idle; one has been mortgaged to the Suzhou branch of Jiangnan Rural Commercial Bank, which has obtained a loan of 19.9 million yuan and is currently in a lease state; one is not used for mortgage and guarantee, and is in a state of lease.

In addition, the first quarter report of 2021 shows that the operating income of Hesheng New Material was 516 million yuan, an increase of 60.98% year-on-year, and the net profit attributable to the shareholders of the listed company was 34.767 million yuan, an increase of 268.40% year-on-year. Hesheng New Materials explained the reason for the increase in performance as the increase in market demand for home appliance appearance composite materials and the company's better cost control.

According to Hesheng New Materials, in the first half of 2021, the company will achieve a net profit attributable to the shareholders of listed companies of 59 million yuan to 65 million yuan, an increase of 113.58% to 135.30% year-on-year.

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