After being publicly condemned, he was also guilty of violations* ST Zhonghe: Reorganization is not affected

Every reporter Li Ting is edited by Zhao Qiao

Major asset restructuring is being planned, and *ST Zhonghe (002070, SZ), which has been suspended for three months, is in a negative position.

The transfer of equity by the factor company was not disclosed in time, which constituted a violation of the letter. On August 10, the Shenzhen Stock Exchange issued a letter of supervision on *ST Zhonghe. Not long ago, the Shenzhen Stock Exchange had just publicly condemned *ST Zhonghe and the parties.

Letter of laissez-faire

According to the supervision letter, on November 26, 2016, *ST Zhonghe Company's subsidiary Xiamen Juchao Brand Investment Management Co., Ltd. and Xiamen Zhonghe Fashion Fabric Design Co., Ltd. intend to transfer 99.64% of the shares of Zhejiang Reqi Apparel held by the two companies. And signed an equity transfer agreement with the transferee. *ST Zhonghe confirmed the net profit of 28 million yuan in the 2016 industry newspaper, accounting for 19.07% of the absolute value of the net profit attributable to shareholders of the listed company in 2015. However, *ST Zhonghe did not disclose the above equity transfer in the “Apologizing Announcement on the Significant Differences Between 2016 Audited Results and Performance Reports” until April 29, 2017. The Shenzhen Stock Exchange pointed out that the above acts violated the relevant provisions of the stock listing rules.

On August 1, *ST Zhonghe and related parties have just been publicly condemned by the Shenzhen Stock Exchange. According to previous announcements, *ST Zhonghe disclosed the 2016 annual performance report, and the net profit attributable to shareholders of listed companies in 2016 is estimated to be 57.69 million yuan. On April 29, 2017, the company disclosed in 2016 the annual audited net profit of 2016 was negative 48.3 million yuan. The company did not make any corrections to the performance report, and the 2016 audited net profit was significantly different from that disclosed in the performance report. The Shenzhen Stock Exchange pointed out that the above acts violated the relevant regulations. Xu Jiancheng, the chairman and general manager of the company, and Huang Yanqin, the chief financial officer, failed to fulfill their duties and perform their duties of integrity and diligence, and they have an important responsibility for the above-mentioned violations.

In May of this year, the original Zhonghe shares were issued a warning of delisting risk, the company's abbreviation was changed to *ST Zhonghe, and the suspension of trading began on May 2. On June 2, *ST Zhonghe announced that the sale of the loss-making business assets continued to be suspended, and then transferred to major asset restructuring matters to continue trading.

At the same time, *ST Zhonghe promised to suspend the trading for no more than one month, that is, promise to seek to disclose the restructuring plan before July 2, 2017. Until July 7, *ST Zhonghe said that he could not disclose the restructuring plan as required.

On August 9th, *ST Zhonghe announced that it had signed an intentional "Significant Asset Sale Framework Agreement" with a certain group of Xiamen Co., Ltd. (Party B), intending to directly or indirectly hold all the assets of the textile printing and dyeing business (including Xiamen). The shares of Hualun Printing and Dyeing Co., Ltd., Fujian Zhonghe Marketing Co., Ltd., Fujian Zhonghe Textile Co., Ltd., Zhejiang Leiqi Garment Co., Ltd., and the printing and dyeing business assets of the parent company of Fujian Zhonghe Co., Ltd. Sold to Party B. The specific transaction price and trading plan have not been announced.

According to the verification opinion of the restructuring of the independent financial adviser Industrial Securities, the restructuring of the counterparty and the plan has not yet been determined, and the transaction remains uncertain.

An analyst told reporters that although public condemnation does not involve direct economic penalties, it is a kind of reputation punishment. The publicly condemned information of listed companies will be counted in the integrity file, and the refinancing of listed companies will be received within one year. Impact, which means that mergers and acquisitions within one year will have an impact.

The assets to be sold are deeply mired in debt

The reporter compiled the public information and found that there was another crisis in the reorganization of the assets of *ST Zhonghe. On July 26th, *ST Zhonghe and a notice caught the attention of investors. According to the announcement, the land parcel of Xiamen Hualun Printing and Dyeing subsidiary was disclosed. Due to the adjustment of land policy, the old and old reform policies are no longer applicable.

*ST Zhonghe believes that land policy adjustments have a greater impact on the company. On the same day of July 26, another announcement by *ST Zhonghe showed that Xiamen Hualun Printing and Dyeing Co., Ltd. and Fujian Zhonghe Marketing Co., Ltd. (both of which intend to restructure and sell assets) are in deep debt disputes, including In the case of the loan contract dispute of Industrial Bank Co., Ltd. Xiamen Branch, the balance of the loan principal was 69,373,700 yuan, with Xiamen Huayin plant and land use rights as collateral, and Xu Jiancheng (*ST Zhonghe Chairman) provided joint and several liability guarantees. Xiamen Xiamen Hualun Printing and Printing and Zhonghe Marketing respectively provide joint and several liability guarantees, and the land has been seized.

Some investors questioned that the relevant announcement on July 26 seemed to "kill" for the failure of the restructuring. In this regard, on August 2, *ST Zhonghe did not respond positively on the investor relations interactive platform, indicating that the restructuring is proceeding. On the August 8th network apology meeting, *ST Zhonghe admitted that the company is currently facing many difficulties, coupled with the related funds to collect loans, pressure on loans, the company's operating funds are very tight.

Whether the company’s reorganization is unsuccessful and the company’s withdrawal from the market, *ST Zhonghe responded “whether or not to withdraw from the market as a result of the 2017 annual audited annual report.”

On August 10, *ST Zhonghe Securities Department staff told reporters that the company believes that the restructuring is not affected by relevant condemnation and supervision.