Kangmei Pharmaceutical, which falsified 30 billion yuan, may be reborn
Kangmei Pharmaceutical, which has financial frauds of 30 billion yuan, has ushered in new changes. On July 30, ST Kangmei issued an announcement stating that the company was approved to suspend trading due to possible custody and subsequent restructuring, and it will suspend trading until September 3 at the latest. The "scandal target" of this reorganization is Guangdong state-owned assets. If state-owned assets enter the market, Kangmei Pharmaceutical will have a chance of rebirth.
Regardless of restructuring or not, the real hammer of 30 billion yuan in financial fraud should not be forgotten. Kangmei Pharmaceutical's 2020 is precarious. In the first half of the year, the China Securities Regulatory Commission imposed a fine of 600,000 yuan on the administrative penalty and market ban on Kangmei Pharmaceutical, and publicly condemned 21 responsible persons with a fine of 900,000 to 100,000. Fines ranging from RMB yuan, and six major responsible persons were banned from the securities market for 10 years to life.
Introducing national capital restructuring?
ST Kangmei stock price rebounded
After the financial fraud turmoil, ST Kangmei wants to say goodbye to the past, "changing ownership" may be the most convenient way.
On July 30, ST Kangmei issued an announcement stating that it has been learned from the controlling shareholder and relevant departments that the company may involve custody and subsequent reorganization this time, and the related work will take a long time, involve a large scale of debt, and have a wide scope. The company applied to the Shanghai Stock Exchange for continued trading suspension, and the longest continuous cumulative suspension will not exceed 30 trading days from July 23. The company's stocks will resume trading on September 3 at the latest.
The "custody and subsequent reorganization" mentioned in the suspension announcement was widely reported on the Internet, and most of the "scandals" were Guangdong state-owned assets.
After the fraud incident, Guangdong Province's support for ST Kangmei has been unbroken. On August 16, 2019, ST Kangmei and related parties received the "Administrative Penalty and Market Ban Advance Notice" from the China Securities Regulatory Commission. The next day, "Nanfang Daily" went to Puning and other places where ST Kangmei was located to report, conveying confidence to the market. The report triggered ST Kangmei's daily limit for 4 consecutive trading days.
Later, on September 16, 2019, Guangyao Group and Kangmei Pharmaceutical signed a strategic cooperation agreement. Guangzhou Pharmaceutical Group is actually controlled by the State-owned Assets Supervision and Administration Commission of Guangzhou and is the controlling shareholder of Baiyunshan, a listed company. Baiyunshan and ST Kangmei are on the track of Chinese medicine. Hand in hand with Guangzhou Pharmaceutical Group, ST Kangmei gained 3 daily limits.
If state-owned assets enter the market for reorganization, Kangmei will usher in a chance of rebirth. Recently, under the favorable news of the restructuring, the stock price of ST Kangmei has also risen not badly. From July 14th to 22nd, 4 daily limit was harvested, and the range rose by 24%.
Financial fraud 30 billion
Shareholders have initiated claims
Whether ST Kangmei Pharmaceutical will usher in a reorganization and rebirth is still unclear, but the real hammer of 30 billion yuan of fraud will make its 2020 precarious.
On May 14, the administrative penalties against ST Kangmei landed. The China Securities Regulatory Commission imposed a fine of 600,000 yuan on the company, imposed fines ranging from 900,000 yuan to 100,000 yuan on 21 responsible persons, and imposed a 10-year to life-long security market ban on 6 major responsible persons.
The Securities Regulatory Commission determined that from 2016 to 2018, Kangmei Pharmaceuticals inflated huge operating income, inflated currency funds, inflated fixed assets, etc., and at the same time, there were non-operating capital occupations by controlling shareholders and their related parties. The above behaviors caused false records and major omissions in the relevant annual reports disclosed by Kangmei Pharmaceutical.
On the evening of June 17th, ST Kangmei's 2019 annual report arrived late. During the reporting period, ST Kangmei lost 4.661 billion yuan for the year and made 374 million yuan for the same period last year. In addition, ST Kangmei disclosed that as of December 31, 2019, affiliated companies controlled by the company's actual controller Ma Xingtian occupied the company's funds for non-operating purposes, totaling 9.48 billion yuan.
On July 10, the actual controller of the company was taken compulsory measures.
On July 20th, the Shanghai Stock Exchange took Ma Xingtian, the actual controller and then chairman and general manager of Kangmei Pharmaceutical, and Xu Dongjin, who acted in concert with the actual controller and then vice chairman and deputy general manager of Kangmei Pharmaceutical, and then director and secretary of the board of directors. 21 people including Qiu Xiwei, deputy general manager, publicly condemned. The Shanghai Stock Exchange determined that Ma Xingtian, Xu Dongjin, and Qiu Xiwei are not fit to serve as directors, supervisors and senior managers of listed companies for life. In addition, the Shanghai Stock Exchange also disclosed that there were false records in the company's 2016, 2017, and 2018 annual reports and 2018 semi-annual reports, which inflated operating income, interest income and operating profit totaling close to 30 billion yuan.
Since the beginning of this year, ST Kangmei's stock price has fallen by 20.91%. The company's "thunderstorm" damages the interests of investors. At present, shareholders have filed claims against ST Kangmei.
West China Metropolis Daily-Cover News Reporter Liu Xuqiang