China Lantian’s tender offer for Dongfang Jinyu: Xinpi was given a warning and fined 400000 for breaking the law

In accordance with the relevant provisions of the securities law of the people’s Republic of China (hereinafter referred to as the securities law of 2005) amended in 2005, Hubei securities regulatory bureau has filed a case for investigation and trial on the information disclosure violations of China Lantian, Xinglong industry and Zhaoning. < p > < p > on January 31, 2019, China Lantian signed the equity transfer agreement with Zhao Ning and Wang Yiyan, who agreed that Zhao Ning and Wang Yiyan would transfer 100% of the equity of Xinglong industry, the controlling shareholder of Dongfang Jinyu Co., Ltd. (hereinafter referred to as Dongfang Jinyu), which Zhao Ning held 98% and Wang Yiyan held 2%, to China Lantian. After the signing of the agreement, China Lantian provided Xinglong industry with a copy of its business license, articles of association, minutes of meeting of China Lantian Corporation ([2019] No. 003) and other materials for information disclosure. The minutes of the meeting of China Lantian Corporation states that China Lantian “is an enterprise owned by the whole people and the investor is the Ministry of agriculture”. Subsequently, Zhao Ning, chairman of Xinglong industry, provided the above information to Dongfang Jinyu Secretary Office for information disclosure. < / P > < p > on February 2, 2019, Dongfang Jinyu issued the notice on the proposed change of equity structure and the proposed change of actual controller and resumption of trading after receiving the notice from the controlling shareholder, in which China Lantian was called “the enterprise owned by the whole people in charge of the Ministry of agriculture”. < / P > < p > according to the second paragraph of Article 94 of the securities law of 2005 and the second paragraph of the administrative measures for information disclosure of listed companies (issued in 2007, order No. 40 of the CSRC), China Lantian, as the purchaser, has the obligation to disclose information truthfully, accurately and completely, and the disclosed information shall not have false records, misleading statements or major omissions. Among the above acquisition matters, China Lantian has not truly, accurately and completely disclosed its behavior that has no equity investment relationship with the Ministry of agriculture and rural areas for a long time, and the disclosed information has false records, which constitutes the illegal act mentioned in the first paragraph of Article 193 of the securities law of 2005. Tang Zhe, the then executive deputy general manager of China Lantian, was fully responsible for the daily management of the company and led the acquisition. He was directly in charge. < / P > < p > according to Article 35 (3) and Article 46 (1) (1) of the measures for the administration of information disclosure of listed companies and Article 58 of the measures for the administration of acquisition of listed companies (revised in 2014, CSRC Order No. 108), Zhao Ning, as the actual controller of the listed company, Xinglong industry, as the controlling shareholder of the listed company, has the responsibility to cooperate with the listed company in real and accurate way The obligation to accurately and completely disclose the information about the proposed equity transfer and the change of the actual controller. Among the above acquisitions, Zhao Ning and Xinglong industries failed to diligently verify and truthfully and accurately disclose the relevant information, thus violating Article 61 of the measures for the administration of information disclosure of listed companies and the first paragraph of Article 193 of the securities law of 2005, which constitutes an illegal act of information disclosure. < / P > < p > according to the above equity transfer agreement, Zhao Ning and Wang Yiyan transfer 100% equity of Xinglong industry to China Lantian. As the controlling shareholder of Dongfang Jinyu, Xinglong industry holds 31.42% shares of Dongfang Jinyu. After the completion of the transfer, China Lantian will indirectly hold 31.42% of the shares of Dongfang Jinyu, which meets the requirements of article 96 of the securities law of 2005 that an offer should be made to all shareholders of the listed company or an application should be made to the CSRC for exemption from the offer. < / P > < p > in accordance with the provisions of Article 101 (2) of the securities law of 2005 and Article 30, Article 48 and Article 56 of the administrative measures for the acquisition of listed companies, the purchaser shall make a suggestive announcement on the summary of the tender offer report within three days after reaching the agreement or making similar arrangements, or apply to the CSRC within three days after reaching the acquisition agreement Please exempt the tender offer and make a suggestive announcement. In the above acquisition, the equity transfer agreement of China Lantian was terminated from January 31, 2019 to February 28, 2019, and the summary of the tender offer report was not disclosed in time according to law, and the application for exemption from tender offer was not submitted to the CSRC. < / P > < p > the above-mentioned behavior of China Lantian violates the provisions of article 96 of the securities law of 2005, and constitutes the illegal act mentioned in Article 213 of the securities law amended in 2014. Tang Zhe, the then executive deputy general manager of China Lantian, was fully responsible for the daily management of the company and led the acquisition. He was directly in charge. < / P > < p > the above facts are proved by the announcement of the listed company, industrial and commercial information, equity transfer agreement, business license, minutes of meeting, articles of association and memorandum of China Lantian Corporation, as well as relevant letters and records of relevant personnel. First, Xinglong industry is an enterprise controlled by Zhao Ning, and the above equity transfer is planned and implemented by Zhao Ning. Xinglong industry signs equity transfer agreement according to the instructions of shareholders, and there is no illegal intention. Secondly, after the exchange sent a letter of inquiry to the listed companies and relevant parties on the above equity transfer, Xinglong industry actively cooperated to take remedial measures and urged China Lantian to provide relevant information. Due to China Lantian’s non cooperation, the regulatory requirements could not be implemented. After confirming that the relevant situation could not be verified on schedule, the company timely negotiated with the listed company and the actual controller to terminate the equity transfer, eliminating the adverse effects. Xinglong Industrial requested a mitigated punishment. First, the equity transfer agreement has clearly stipulated the information disclosure obligations of China Lantian as the purchaser. After the signing of the agreement, he has timely informed the listed company of information disclosure, and there is no illegal intention. Second, after the exchange sent a letter of inquiry to the listed companies and relevant parties on the above equity transfer matters, it promptly organized verification and repeatedly communicated with China Lantian. However, due to China Lantian’s non cooperation, it was unable to implement the regulatory requirements. In this regard, after consulting with the listed company, it disclosed twice the announcement of deferring the reply to the inquiry letter, and timely terminated the equity transfer after confirming that the relevant situation could not be verified on schedule, eliminating the adverse effect. Zhao Ning asked for a mitigated punishment. First, China Lantian has not completed the decoupling procedure with the Ministry of agriculture in fact, and is still under the Ministry of agriculture in law, so there is no false record of information disclosure. Second, the equity transfer agreement is only a preliminary consensus of all parties, and has no legal effect. There is no prerequisite for making a prompt announcement on the report of tender offer or applying to the CSRC for exemption from the offer and making a prompt announcement. Third, Tang Zhe is only party secretary and deputy general manager in Lantian, China, and is not directly in charge. To sum up, Tang zhe requested to cancel the above two administrative punishments. First, for Xinglong industry. First, according to the provisions of Article 35 (3) and Article 46 (1) (1) of the measures for the administration of information disclosure of listed companies and Article 58 of the measures for the administration of acquisition of listed companies, both the controlling shareholder and the actual controller have the obligation to cooperate with the listed company to do a good job of information disclosure. The information disclosure obligation of the actual controller can not replace or reduce the legal obligation of the controlling shareholder. Second, as an independent legal entity, Xinglong industry should fulfill the obligation of information disclosure in time and bear the administrative responsibility. Thirdly, China Lantian’s refusal to cooperate is not the reason for statutory mitigation of liability; the circumstances such as the announcement of termination of equity transfer have been comprehensively considered in the punishment. Second, for Zhao Ning. First, according to the provisions of Article 58 of the administrative measures for the acquisition of listed companies and paragraph 1 of Article 2 of the administrative measures for the information disclosure of listed companies, Zhao Ning, as the actual controller, has the obligation to truly, accurately and completely disclose the information about the equity transfer and the change of the actual controller. Although Zhao Ning announced the above equity transfer in time, he did not perform the obligation of investigating and verifying the purchaser and disclosing the relevant information truthfully and correctly. Second, China Lantian’s refusal to cooperate is not the reason for statutory mitigation of liability; the circumstances such as the delayed reply to the announcement and the termination of equity transfer have been comprehensively considered in the punishment. Third, for Tang Zhe. First, it was found that China’s Lantian was decoupled from the Ministry of agriculture at the end of 1999. The fact that Lantian in China has not gone through the registration of industrial and commercial change on its own initiative and in time can not be denied that Lantian is out of touch with the Ministry of agriculture. China Lantian, as the purchaser, has the legal obligation of information disclosure, and fails to provide the listed company with complete and accurate information about its enterprise nature and shareholders, resulting in the disclosure error of the basic information of the transferee in the prompt announcement of Dongfang Jinyu, so it shall bear the corresponding responsibility. Second, the equity transfer agreement has come into effect, and China Lantian shall perform the relevant obligations of tender offer in accordance with the law. Third, according to China Lantian appointment documents, Tang Zhe is the executive deputy general manager of China Lantian and is fully responsible for the daily management of the company. The evidence in the case shows that Tang zhe participated in the whole process of the acquisition, and played an organizational and leading role in the early visit, meeting, agreement signing and other important matters, so he should be identified as the directly responsible person in charge. According to the facts, nature, circumstances and social harm degree of the party’s illegal behavior, Article 193 (1) of the securities law in 2005 and Article 213 of the securities law amended in 2014, the following decisions are made: < / P > < p > 1; Tang Zhe, the person directly in charge, was given a warning and fined 100000 yuan. Second, China Lantian Corporation will be given a warning and a fine of 200000 yuan if it fails to fulfill its obligations of tender offer in accordance with the law; and Tang Zhe, the person in charge who is directly responsible, will be given a warning and a fine of 100000 yuan. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.