A bad announcement made *ST King Kong, which was on the verge of delisting, usher in a strong daily limit.
On the evening of February 20, *ST King Kong issued an announcement stating that the company's legal representative and chairman Guo Liuxi was subject to compulsory measures by the public security organs in accordance with the law on suspicion of the crime of non-disclosure of important information in violation of regulations.
At the same time, the board of directors of the company reviewed and approved the election of director Liu Miao as the chairman of the company.
On February 21, the daily limit of *ST King Kong was reported at 1.79 yuan per share.
In early trading on February 22, *ST King Kong continued to rise. As of press time, it was reported at 1.95 yuan per share, up 8.94%.
On the morning of February 22, *ST King Kong received a letter of concern from the stock exchange, requesting the company to explain the legal representative and chairman of the board of directors who were suspected of violations and were taken coercive measures, the board of directors was re-elected, and the company's stock price rose by the limit.
In recent years, *ST King Kong has been caught in a negative vortex. Due to illegal occupation of listed company funds and illegal external guarantees, the company is insolvent and does not have the ability to continue operations, and it faces the situation of termination of listing.
On the evening of the 21st, *ST King Kong once again issued the "Risk Warning Announcement on the Possible Termination of Listing of Stocks".
Why does bad news bring the company's stock price to the limit?
Market rumors have something to do with *ST King Kong ushering in a new actual controller. Is it true?
"On the whole, this time, the government is taking the lead, which is also good for the company and provides a direction for the company's development." A person familiar with the matter confirmed to the Shell Finance reporter the progress of *ST King Kong's board reorganization.
In response to the above-mentioned specific situation, on the afternoon of February 21, a reporter from Shell Finance and Economics of the Beijing News called the *ST King Kong Secretary's Office.
*The staff of the ST King Kong Secretary Office said that they could not reply at present, and there will be a special person for communication in the follow-up.
As of press time, the reporter has not received any relevant reply from the company.
The chairman was arrested, and the board of directors was urgently reorganized
In the early trading of February 21, *ST King Kong opened higher and walked higher, and closed the upper limit after half an hour.
As of the close of the day, *ST King Kong reported 1.79 yuan per share, an increase of 20.13%.
On the news, on the evening of February 20, *ST King Kong issued an announcement stating that the company's legal representative and chairman Guo Liuxi had been subject to compulsory measures by the public security organs in accordance with the law on suspicion of the crime of not disclosing important information in violation of regulations.
*ST King Kong said that as of now, the company's operations are normal. The company has held an emergency meeting of the board of directors on the night of February 18, 2022. It was unanimously approved to remove Chairman Guo Liuxi, no longer act as the secretary of the company's board of directors, and to elect Liu Miao as the company. Chairman's proposal.
Shell Finance reporter noticed that as of the end of the third quarter of 2021, Guo Liuxi held 185 million shares of *ST King Kong, accounting for 15.37% of the total share capital of the listed company; in addition, its affiliate Henan Huajing Superhard Materials Co., Ltd. held *ST King Kong has 145 million shares, accounting for 12.05% of the total share capital of the listed company.
However, in November 2021, *ST King Kong pointed out in its reply to the Shenzhen Stock Exchange's inquiry letter that the company has no controlling shareholder and no actual controller.
The reporter combed the information and found that Liu Miao is currently the deputy general manager of Henan Agricultural Investment Financial Holding Co., Ltd.
In December 2018, *ST King Kong fell into obvious liquidity difficulties and introduced a number of state-owned enterprises such as Zhantou Agricultural Investment Financial Holdings.
In January 2019, Liu Miao became a non-independent director of the fourth board of directors of *ST King Kong.
As of the end of the third quarter of 2021, Agricultural Investment Financial Holdings held a 7.42% stake in the company, making it the fourth largest shareholder of *ST King Kong.
According to the company’s information, Agricultural Investment Financial Holdings is a core subsidiary of Henan Agricultural Comprehensive Development Co., Ltd., while Henan Agricultural Development Co., Ltd. is a wholly state-owned company affiliated to the Henan Provincial Department of Finance.
Guo Liuxi has disagreements with the state-owned shareholders of Henan Finance.
In August last year, Guo Liuxi said in an interview with the Beijing News Shell Finance reporter, "We hope to enter the company's strategic investment, take root in the industry, and help the company continue to develop in the long run, rather than purely financial investment. A sudden withdrawal is not good for the company’s development.”
On October 26, 2021, Liu Miao and another director Wang Daping issued a statement saying that since this year, Agricultural Investment Financial Holdings and Shanghai Xinghan Capital have exercised shareholder rights for *ST King Kong governance many times, but the actual controller of the company maliciously obstructed , corporate governance is seriously anomie.
On December 13, 2021, *ST King Kong issued a number of announcements, suspending the proposal of Agricultural Investment Financial Holdings and Xinghan Asset Management (holding 26.7% of the company's shares) to convene an extraordinary general meeting.
"On the whole, this time the government is taking the lead, which is also good for the company and provides a direction for the company's future development." A person familiar with the matter told Shell Finance reporter that the reorganization of the *ST King Kong board of directors was affected by the government.
In response to the above specific situation, on the afternoon of February 21, the Beijing News Shell Finance reporter called the *ST King Kong Board Secretary Office and the Agricultural Investment Financial Holding Board Secretary respectively.
As of press time, the reporter has not received a reply from both parties.
delisting risk edge
On the evening of February 21, *ST King Kong once again issued the "Risk Warning Announcement on the Possible Termination of Listing of Stocks".
The announcement stated that *ST King Kong has multiple delisting risks.
Among them, *ST King Kong estimates that the net profit attributable to shareholders of listed companies in 2021 will be a loss of 1 billion to 1.5 billion yuan.
If the audited net assets at the end of 2021 are negative, or the net assets in 2021 after the retrospective restatement are negative, according to the second item of Article 10.3.10 of the "Shenzhen Stock Exchange Growth Enterprise Market Listing Rules", the company's stock will be terminated from listing.
In addition, the company has not yet appointed the 2021 audit institution, and the company will select the 2021 audit institution as soon as possible to promote the 2021 audit work.
According to the relevant provisions of the "Listing Rules", if more than half of the directors cannot disclose the true, accurate and complete annual report before April 30, the company's shares will be terminated from listing.
The announcement also stated that as of February 15, the company had involved a total of 89 lawsuits/arbitration cases, with a total amount of about 6.061 billion yuan.
The company was listed as a dishonest person subject to execution.
The legal representative of the company was subject to compulsory measures by the public security organs in accordance with the law due to the crime of non-disclosure of important information in violation of regulations.
Ruan Wanjin, a lawyer from Beijing Zhongyin Law Firm, told Shell Finance that according to the relevant provisions of the Securities Law and the Administrative Measures for Information Disclosure of Listed Companies, there have been major events that may have a greater impact on the stock trading price of listed companies. Investors have not yet been informed. The listed company shall make an announcement immediately.
"If investors suffer losses due to false statements (not disclosing major information) such as listed companies or directors and executives of controlling shareholders, they can ask the relevant responsible persons to compensate." Ruan Wanjin said.
Guo Liuxi: The former "king of artificial diamonds" has broken diamond dreams
According to public information, Guo Liuxi was born in 1963, has a bachelor's degree, and is a professor-level senior engineer. He has presided over and participated in the application of 163 patents that have been authorized.
The 4 projects it has participated in research and development have won the national torch project certificate, and 6 projects have won 5 first prizes of provincial and municipal scientific and technological progress.
From 1999 to 2001, he worked in Henan Yuanfa as chairman and general manager; since 2001, he has served as chairman and general manager of Henan Huajing Superhard Materials Co., Ltd. (*ST King Kong's controlling shareholder); since 2004, he has served as chairman and general manager. * Chairman of ST King Kong, the actual controller of the company.
In August 2021, Guo Liuxi introduced the company's development history in an interview with the Beijing News Shell Finance reporter.
"In 1988, I started to run a self-employed business in Shenqiu County, Zhoukou, Henan. At that time, I was a conductive steel ring, and I had a total of 3 to 4 employees. In addition to this business, I was fortunate to have the help of my family and built a few bungalows. And two points."
Guo Liuxi said that he sold his real estate in 1990 and moved his business to Zhengzhou. With the more than 200,000 yuan he earned, he established Henan Yuanfa Diamond Co., Ltd. to produce diamond raw and auxiliary materials.
By 2001, the company had more than 800 employees and an annual income of tens of millions of yuan.
In order to avoid the "family business disease" in the company, Zhengzhou Huajing Hard Materials Co., Ltd. was established and began to deploy the diamond industry.
In 2010, Yu Diamond (*ST Diamond) was successfully listed.
According to the prospectus of that year, the production and sales volume of synthetic diamonds of Henan Diamond ranked third in China; at the peak of Henan Diamond, the company had leading synthetic equipment and production technology, and was one of the largest synthetic diamond enterprises in China.
In April 2020, Yu Diamond's performance has changed dramatically. The net profit attributable to shareholders of the listed company has changed from a profit of 67.438 million to 96.34 million yuan to a loss of 4.5 billion to 5.5 billion yuan.
So far, Yu Diamond’s financial fraud has surfaced.
In December 2020, the China Securities Regulatory Commission issued a notice saying that Yu Diamond had inflated profits of several hundred million yuan in three years, failed to disclose external guarantees and related transactions of 4 billion yuan, and the actual controller had occupied more than 2.3 billion yuan of listed funds.
In Guo Liuxi's view, the root cause of the company's crisis lies in the previous fixed increase guarantee.
"All parties asked me, my family or the listed company to provide guarantees, which triggered a series of chain reactions, such as borrowing money from others to pay interest, and borrowing money to pay guarantee debts."
According to the announcement, in November 2016, Yu Diamond issued 527 million additional shares and raised 4.567 billion yuan for the project with an annual output of 7 million carats of gem-quality diamonds and to supplement working capital.
Guo Liuxi plans to invest 1 billion yuan to participate in the subscription of 115 million shares.
On November 12, 2021, the Shenzhen Stock Exchange issued a disciplinary action against *ST King Kong.
The Shenzhen Stock Exchange pointed out that Guo Liuxi failed to perform his duties and perform his duty of diligence and due diligence, failed to ensure the independent operation of the listed company, abused his controlling position over the company, and misappropriated the funds and assets of the listed company directly or indirectly through illegal occupation of funds, illegal acceptance of guarantees, etc. Seriously damage the legitimate rights and interests of the listed company and other shareholders, and publicly determine that Guo Liuxi is unsuitable to serve as a director, supervisor, or senior executive of the listed company within 10 years.
It is worth mentioning that Guo Liuxi and its related parties are suspected of occupying a total of 3.169 billion yuan of *ST King Kong funds.
Previously, *ST King Kong said: "The actual controller of the company has promised to raise funds through various means before November 2, 2021, and return the funds occupied by the listed company as soon as possible."
On January 18, *ST King Kong stated on the investor interaction platform that Guo Liuxi was still trying his best to raise funds, and the return of funds occupied and returned was uncertain.
*ST King Kong insiders also revealed that Guo Liuxi has been raising money to repay, but with little success.
Until the evening of February 20, *ST King Kong announced that Guo Liuxi had been subject to compulsory measures by the public security organs in accordance with the law because of the crime of non-disclosure of important information in violation of regulations.