Legend Holdings was ordered by the Beijing Securities Regulatory Bureau to make corrections due to the untimely disclosure of the letter
On April 14, the Beijing Regulatory Bureau of the China Securities Regulatory Commission issued the "Decision on Ordering Corrective Administrative Supervision Measures against Legend Holdings Co., Ltd.".
According to the report, Legend Holdings’ periodic reports and interim reports were not disclosed in a timely manner, the equity pledges of individual subsidiaries were not disclosed in relevant prospectuses and periodic reports, the company’s operating and non-operating transactions were not clearly defined, and non-operating transactions accounted for or Due to the inaccurate disclosure of funds borrowing and other issues, it was decided to take administrative supervision measures against Legend Holdings to order corrections.
The Beijing Supervision Bureau of the China Securities Regulatory Commission conducted an on-site inspection of Legend Holdings from September 8 to September 18, 2021, and found the following problems.
First, the periodic reports are not disclosed in a timely manner.
The company's 2020 annual report was disclosed on the Hong Kong Stock Exchange earlier than the domestic exchange's annual report on corporate bonds was released.
Second, the interim report was not disclosed in a timely manner.
Legend Holdings' proposed acquisition of shares in Luxembourg International Bank was disclosed on the Shanghai Stock Exchange later than the Hong Kong Stock Exchange.
Third, the equity pledge of individual subsidiaries was not disclosed in the relevant prospectus and periodic reports.
Fourth, the company's operating and non-operating transactions are not clearly defined, and the non-operating transactions or funds borrowing and lending are not disclosed accurately.
At the same time, the Beijing Supervision Bureau of the China Securities Regulatory Commission found in its daily supervision that on March 31, 2022, Legend Holdings issued an announcement on the "Annual Results Announcement for the Year Ending December 31, 2021" on the Hong Kong Stock Exchange, but the information was not published in the The bond market on the Shanghai Stock Exchange will be disclosed simultaneously.
The above behavior violated Article 4 of the Administrative Measures for the Issuance and Trading of Corporate Bonds (2021), Article 4 of the Administrative Measures for the Issuance and Trading of Corporate Bonds (2015), and Article 10 of the Administrative Measures for the Information Disclosure of Corporate Credit Bonds Article 5 and Article 8 of the Guidelines for the Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No. 38 - Contents and Formats of Annual Reports of Corporate Bonds.
It is hereby decided to take administrative supervision measures against Legend Holdings by ordering corrections.
Legend Holdings shall immediately carry out comprehensive rectifications from the date of receipt of this decision, strictly implement the relevant provisions of the Administrative Measures for Issuance and Trading of Corporate Bonds and Administrative Measures for the Information Disclosure of Corporate Credit Bonds, and perform disclosure obligations in a timely and fair manner. , improve the quality of information disclosure, ensure that the information disclosed must be true, accurate and complete, and submit a written rectification report within 30 days from the date of receipt of this decision.
On March 31 this year, Legend Holdings announced its 2021 annual financial report.
Legend Holdings' revenue last year was 489.872 billion yuan, a year-on-year increase of 17%, and its net profit was 5.755 billion yuan, a year-on-year increase of 48.78%.
Regarding the reasons for the increase in net profit, Legend Holdings explained in its annual report that firstly, on the basis of consolidating existing business advantages and strengthening refined management, Legend Holdings has comprehensively deepened innovation, continuously enhanced its development momentum, and further improved its profitability; secondly In the same period last year, China Car Rental Co., Ltd. provided a large amount of impairment. During the reporting period, the company has completed the sale of the entire equity of China Car Rental, recovered funds and achieved a good return on investment.
It is worth mentioning that Lenovo Group, a subsidiary of Legend Holdings, caused a lot of controversy last year because of its attempt to attack the Science and Technology Innovation Board.
Some professionals believe that Lenovo Group does not meet the requirements for listing on the "Science and Technology Innovation Board".
In addition, Lenovo's high compensation for directors and supervisors has also been questioned.
A reporter from Beiqing Daily found that Yang Yuanqing, CEO of Lenovo Group, received a salary package of up to 168 million yuan in fiscal year 2021, but two other undisclosed executives were paid more than him, with a maximum salary of 197 million yuan.
The average annual salary of Lenovo's 27 executives is 34.55 million yuan, and the total annual salary is as high as 933 million yuan, accounting for 7.77% of the company's pre-tax profit.
At the same time, Lenovo's financial situation is not healthy.
In the past three years, Lenovo's asset-liability ratio has remained at a high level of around 90%, and the current ratio is lower than 1, and its solvency is worrying.
Lenovo responds
Deployment arrangements have been made for the next rectification work
On April 14, Legend Holdings issued the "Announcement on Receipt of Decision on Administrative Supervision Measures from Beijing Securities Regulatory Bureau". The announcement shows that Legend Holdings attaches great importance to the problems pointed out in the decision on administrative supervision measures and has already carried out the next step of rectification work. According to the deployment arrangement, the rectification will be completed as soon as possible and a rectification report will be submitted to the Beijing Securities Regulatory Bureau.
The announcement shows that on April 14, 2022, Legend Holdings received the decision on administrative regulatory measures issued by the Beijing Regulatory Bureau of the China Securities Regulatory Commission "Decision on Ordering Legend Holdings Co., Ltd. to Correct Administrative Regulatory Measures" ([ 2022] No. 65).
Legend Holdings said that the company attaches great importance to the problems pointed out in the decision on administrative supervision measures, and has made arrangements for the next step of rectification work. It will complete the rectification as soon as possible and submit a rectification report to the Beijing Securities Regulatory Bureau.
The company and relevant personnel will take this as a warning, earnestly learn lessons, and further strengthen the study of relevant laws and regulations such as the "Securities Law of the People's Republic of China", "Administrative Measures for Information Disclosure of Listed Companies", "Administrative Measures for Issuance and Trading of Corporate Bonds", etc. Internal management of the company, fulfilling the obligation of information disclosure in accordance with the law, improving the quality of information disclosure of the company, promoting the healthy, stable and sustainable development of the company, and better safeguarding the interests of the company, all shareholders and creditors.
This group of articles / Photo courtesy of our reporter Wen Jing / Visual China