Author: Zhang Yuanke
On August 21, an announcement from Liancheng CNC (835368.BJ) blew up the photovoltaic industry.
The announcement stated that the actual controller and chairman of the company, Li Chunan, was suspected of insider trading in the securities market. The China Securities Regulatory Commission, in accordance with the "Securities Law of the People's Republic of China", "The People's Republic of China Administrative Penalty Law" and other laws and regulations, decided on August 19. its filing.
It is worth noting that Li Chunan is not only the chairman of Liancheng CNC, but also the main sponsor of the photovoltaic leader LONGi Green Energy (601012.SH), with a shareholding ratio of up to 24.08% in the initial stage of listing, and was once the largest single natural person shareholder of LONGi Green Energy. .
In addition to LONGi Green Energy and Liancheng CNC, Li Chunan also holds a 17.12% stake in LONGi Electromagnetic, a company listed on the New Third Board, and a 14.46% stake in LONGi Instrument, a company listed on the New Third Board.
After the news was announced, the stock prices of related companies plunged in early trading on August 22.
As of the close of the day, LONGi Green Energy has fallen by 4.83%, and its market value has evaporated by 20.547 billion yuan; Liancheng CNC has fallen by 6.13%, and its market value has evaporated by 588 million yuan.
Listed companies urgently clarify
After the CSRC filed the case against Li Chunan, the Beijing Stock Exchange quickly issued an inquiry letter, requesting to clarify whether the subject matter of Li Chunan’s alleged insider trading was the company’s stock or the stock of other companies of the Beijing Stock Exchange; verify the time when the company was aware of the aforementioned matters, and indicate whether there was any unresolved issue. Timely fulfillment of information disclosure obligations and early disclosure of inside information.
Liancheng CNC stated that Li Chunan is now the actual controller of the company and serves as the chairman of the company. At present, his investigation has not affected his normal performance in the company.
In the Investor Activity Record Form on the 21st, Liancheng CNC once again stated that the investigation on file is only an investigation of the chairman of the board and will not affect the company's normal production and operation activities.
However, in terms of refinancing, the refinancing plan will be postponed due to the fact that the company under the investigation does not meet the requirements for stock issuance conditions for the time being.
At present, the company has used its own funds and self-raised funds to invest first.
At the same time, LONGi Green Energy also issued an announcement stating that Li Chunan does not hold any positions in the company, including directors, and does not participate in the daily operation and management of the company.
This filing matter has no material impact on the company's operations.
Although Li Chunan is not the company's actual controller and controlling shareholder, he is the company's actual controller and controlling shareholders Li Zhenguo and Li Xiyan acting in concert.
As of June 30, 2022, Li Chunan held 160,143,858 shares of the company, accounting for 2.11% of the company's total share capital.
It is worth noting that in the above two announcements, both companies stated that the subject of their alleged insider trading was not their own stocks.
LONGi Green Energy also stated that the suspected insider trading did not involve the company's related matters, and Liancheng CNC also said that the transaction did not involve the shares of other companies on the Beijing Stock Exchange.
If it has nothing to do with the stock transactions of the above-mentioned companies, why did Li Chunan get the case on file?
What is the subject of insider trading?
The reporter called the two companies respectively.
As of the deadline, no reply has been received.
Who is Li Chunan?
For those who are familiar with the photovoltaic industry, the name of Li Chunan, the core figure of this event, is not unfamiliar.
In the 20 years of the development of the national photovoltaic industry, Li Chunan's name has appeared many times.
According to public information, Li Chunan was born on October 10, 1968 in Nanyang, Henan.
In September 1986, Li Chunan was admitted to the Department of Physics of Lanzhou University.
There, he met Li Zhenguo and Zhong Baoshen, both freshmen from Henan.
From 1990 to 1992, after graduation, Li Chunan chose to stay in Gansu Metallurgical Materials Trading Company as a salesman, while Li Zhenguo and Zhong Baoshen went to Xi'an and Fushun respectively.
Fate did not separate the three for too long. Soon, Li Chunan and Zhong Baoshen co-founded Fushun LONGi Electromagnetic Technology Co., Ltd., which specializes in magnetic application products.
The company later changed its name to Shenyang LONGi Electromagnetic Technology Co., Ltd. (hereinafter referred to as "Shenyang LONGi"), and will be listed on the New Third Board in 2020.
From August 2005 to August 2011, Li Chunan served as the chairman of Fushun LONGi.
Shenyang LONGi is just one of many companies founded by three old classmates.
In 2000, 32-year-old Li Zhenguo founded the predecessor of LONGi Green Energy - Xi'an Xinmeng Electronic Technology Co., Ltd. (hereinafter referred to as "Xi'an Xinmeng"), which is mainly engaged in the development, manufacture and sales of semiconductor-grade monocrystalline silicon materials.
In August 2003, Xi'an Xinmeng decided to increase the registered capital by 10 million yuan, and Li Chunan became the company's largest shareholder holding 44% of the shares through capital injection of 8.8 million yuan.
Li Zhenguo and Li Xiyan increased their capital by 750,000 yuan and 250,000 yuan respectively, ranking the second and third largest shareholders with 41.25% and 13.75% respectively.
The two are married and hold a total of 55% of the shares after the capital increase.
In 2004, the company officially entered the solar photovoltaic industry, focusing on the research and development, production and sales of monocrystalline silicon rods and silicon wafers, and gradually developed into the world's largest manufacturer of solar monocrystalline silicon photovoltaic products.
In July 2011, Li Chunan promised in writing to maintain a concerted relationship with Li Zhenguo and Li Xiyan.
On April 11, 2012, the company was listed on the Shanghai Stock Exchange, stock abbreviation: "LONGi", stock code: "601012".
Li Chunan holds about 24.08% of the shares and is the company's largest shareholder. Li Zhenguo and Li Xiyan hold a total of 32.30% of the company's shares and are the company's controlling shareholder and actual controller
By the end of 2021, LONGi had nearly 50,000 employees, and its market value once exceeded 550 billion yuan.
On May 16, 2022, LONGi shares changed its name to LONGi Green Energy.
The Beijing Stock Exchange listed company Dalian Liancheng CNC Machine Co., Ltd. was established in 2007, and the company was formerly known as "Liancheng Co., Ltd.".
In September 2007, Li Chunan was appointed as the legal representative, executive director and chairman of Dalian Liancheng CNC Machine Co., Ltd.
In 2020, Liancheng CNC became the first enterprise in the Northeast to land on the Selected Layer of the New Third Board.
In addition to being the legal representative of Liancheng CNC, Li Chunan is also the actual controller of the company.
According to the prospectus, Shenyang Huizhi Investment Co., Ltd. and Li Chunan held 35.15% and 5.32% of the shares respectively.
Shenyang Huizhi Investment Co., Ltd. was established on March 27, 2007. The legal representative is Zhong Baoshen, the current chairman of LONGi Green Energy. Li Chunan holds 27.64% of the shares and is the second largest shareholder.
Li Chunan and Zhong Baoshen directly or indirectly controlled 40.4757% of the shares of Liancheng CNC.
According to Tianyancha, including LONGi Green Energy and Liancheng CNC, Li Chunan has invested in as many as 11 companies, and the registered capital of 5 companies exceeds 100 million yuan.
In 2021, Li Chunan participated in the investment of three newly established companies, and the investment accounted for a large proportion.
Among them, the registered capital of Zhuhai Lichen Equity Investment Center is 512 million yuan (Li Chunan holds 19.53% of the shares), the registered capital of Zhuhai Weiheng Equity Investment Partnership is 2.83 billion yuan (Li Chunan holds 25.17% of the shares), and the registered capital of Hainan Qingshan Investment Partnership is 30 million RMB (25.95% of Li Chunan Zagu).
Large shareholders who are constantly cashing out
In the early days of LONGi Green Energy's listing, Li Chunan had been the top natural person shareholder of LONGi Green Energy for many years.
In 2015, Li Chunan began to reduce his holdings of LONGi Green Energy for the first time.
From May 14th to 15th, May 20th to 21st, and May 22nd, 2015, Li Chunan reduced his holdings of the company's shares by 20 million shares and 24 million shares respectively through the Shanghai Stock Exchange's block trading system. Shares and 13 million shares, a total reduction of 57 million shares.
After the reduction, Li Chunan held 234 million shares of the company, accounting for 14.27% of the company's total share capital.
According to the average price after the restoration of rights of about 19 yuan per share at that time, Li Chunan cashed out about 1.1 billion yuan in this reduction.
In the past six months that Li Chunan cashed in, the stock price of LONGi Green Energy has risen from a minimum of 1.51 yuan per share to a maximum of 6.64 yuan per share, with the largest cumulative increase of more than 3 times.
Beginning in 2020, Li Chunan accelerated the reduction of LONGi Green Energy.
On October 14, 2020, LONGi Green Energy announced that Li Chunan planned to reduce his holdings of the company's unrestricted tradable shares by no more than 37.7176 million shares by means of centralized bidding, and the proposed reduction should not exceed 1% of the company's total share capital.
Within two and a half months, Li Chunan completed the reduction of holdings through centralized bidding, and the price range for the reduction was 71.06 yuan/share to 92.29 yuan/share.
In this reduction, Li Chunan cashed out 3.43 billion yuan.
On December 20, 2020, Li Chunan signed a share transfer agreement with Hillhouse Capital, intending to transfer 6% of the company's shares he holds to Hillhouse Capital.
Both parties of the transaction agreed that the transfer price per share in this transaction is 70 yuan, and the total transaction consideration is 15.841 billion yuan.
In 2020, when Li Chunan significantly reduced his holdings, LONGi Green Energy's share price has achieved a real leap.
In March 2020, the stock price of LONGi Green Energy reached a minimum of 10.94 yuan/share. On December 31, 2020, the stock price closed at 46.78 yuan/share, and the stock price has increased by more than 3 times in 9 months.
After three reductions, Li Chunan cashed in to 20.371 billion yuan.