Zhongxin Finance, March 23. On the evening of the 22nd, *ST Xinyi (full name "Xinjiang Yilu Wanyuan Industrial Holdings Co., Ltd.") issued an announcement that financial fraud caused the company's operating income to be less than 10 million yuan for three consecutive years. Major violation of the compulsory delisting index, the Shanghai Stock Exchange decided to terminate the company's stock listing.

This also means that *ST Xinyi became the first delisted stock in the Year of the Tiger.

Announcement screenshot

Delisting after 18 risk warnings

  The decision to terminate listing shows that, according to the facts identified in the China Securities Regulatory Commission's Decision on Administrative Punishment ([2022] No. 4), *ST Xinyi has inflated operating income in 2018 and 2019.

After deducting the inflated operating income, the actual operating income of the company for three consecutive fiscal years in 2018, 2019 and 2020 was less than RMB 10 million, and the 2020 financial accounting report was issued with an audit report with a qualified opinion.

  *ST Xinyi's above-mentioned financial fraud has resulted in the fact that the company's financial indicators from 2018 to 2020 have actually reached the situation of major illegal forced delisting stipulated in the original "Shanghai Stock Exchange Implementation Measures for Major Illegal Forced Delisting of Listed Companies". According to relevant regulations, *ST Xinyi shares should be delisted for major violations of law.

After deliberation by the Listing Committee of the Shanghai Stock Exchange, the Shanghai Stock Exchange decided to terminate the listing of *ST Xinyi's shares.

  According to the regulations, from the next trading day after the expiration of 5 trading days after the announcement of the decision by the Shanghai Stock Exchange, *ST Xinyi shares will resume trading and enter the delisting arrangement period. The delisting arrangement period is 15 trading days.

The Shanghai Stock Exchange delisted the *ST Xinyi stock within 5 trading days after the expiration of the delisting arrangement period, and the *ST Xinyi stock was terminated from listing.

  Zhongxin Finance found that from the first risk warning announcement that the company might be terminated from listing on October 27 last year, to February 25 this year, *ST Xinyi issued a total of 18 risk warning announcements.

  On March 2, *ST Xinyi announced that it had received the China Securities Regulatory Commission's "Market Ban Decision".

The announcement shows that *ST Xinyi has false records and major omissions of illegal facts. Huang Wei, as the chairman, chief financial officer, secretary of the board of directors and the actual controller of the listed company, occupies a central position in *ST Xinyi’s information disclosure violations, organizes, Planning and implementation of information disclosure violations, Huang Wei's violations were particularly serious, and the China Securities Regulatory Commission decided to ban Huang Wei from entering the securities market for life.

  On the same day, *ST Xinyi issued an announcement that it had received the “Decision on Administrative Penalties” from the China Securities Regulatory Commission. The announcement showed that Xinjiang Yilu Wanyuan Industrial Holdings Co., Ltd. was warned and fined 8 million yuan; Huang Wei was warned , and imposed a fine of 12 million yuan (4 million yuan as the directly responsible person in charge, and 8 million yuan as the actual controller of *ST Xinyi).

The legal representative Li Yong was given a warning and a fine of 3 million yuan.

Shareholders may claim

  As of September 30, 2021, *ST Xinyi had a total of 24,100 shareholders.

  The Measures for the Administration of Stock Transactions on the Risk Warning Board of Shanghai Securities Trading clarifies that individual investors who buy delisted stocks should have more than 2 years of stock trading experience, and the securities accounts and capital accounts opened in their own names should be in The daily average of the 20 trading days before the opening of the application authority (excluding securities and funds acquired through margin financing and securities lending transactions) should be more than RMB 500,000.

Individual investors who do not meet the above requirements can only sell the delisted stocks they already hold.

  Although *ST Xinyi is facing delisting, the relevant responsible persons cannot be exempted from orders.

  According to China Business News, legal sources said that in the process of delisting a listed company, investors can rationally claim shareholder rights through legal channels. On the other hand, after the company is terminated from listing, although its shares are not traded on the Shanghai Stock Exchange, its assets, liabilities, operations, profit and loss, etc. have not changed because of this, and it can still operate normally.

  According to the provisions of the "Company Law", after the termination of listing, the shareholders of the company still enjoy the right to know the company, the right to vote and other shareholder rights, and the rights enjoyed by the shareholders will not change.

Moreover, after the termination of listing, the company's shareholders can still transfer shares according to regulations.

These stocks are also at risk of delisting

  After *ST new billion, *ST, which has the risk of delisting, has become the focus of the market.

The announcement shows that *ST Jitang has 21 risk warning announcements about being terminated from listing. The company is suspected of illegal information disclosure, and its net profit has been negative for four consecutive years.

A risk alert on October 26 last year showed that the company's shares were at risk of being terminated from listing because the daily closing price for 20 consecutive trading days was lower than 1 yuan.

  In addition, on March 23, Yihua Health disclosed the "First Indicative Announcement on the Possible Delisting Risk Warning and Other Risk Warnings for Stock Trading". Due to the "2021 Annual Performance Forecast", the company is expected to be listed in 2021. The net profit of the company's shareholders and the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses are losses, and the owner's equity attributable to the parent company is negative.

According to the relevant provisions of the "Shenzhen Stock Exchange Listing Rules (2022)", the company's stock trading may be issued a delisting risk warning by the Shenzhen Stock Exchange.

  In addition, ST Galaxy issued an announcement on March 7. It is expected that the company's net assets at the end of 2021 will be -640 million yuan to -900 million yuan. According to regulations, listed companies have "the audited net assets at the end of the most recent fiscal year are negative. Or if the net assets at the end of the most recent fiscal year are negative after the retrospective restatement, the company may be issued a delisting risk warning by the Shenzhen Stock Exchange.

  Since this year, *ST King Kong, *ST Songjiang, *ST Iger, *ST Lasha, *ST Yijian, *ST Daji, *ST Kangmei and many other "stars and hats" companies have disclosed stock termination Listing risk warning announcement.

From March 14 to March 18, 2022, the Shanghai Stock Exchange will focus on monitoring the delisting risk warning stocks such as *ST Chengxing and *ST Shida.