Gree Electric’s “naked resignation” of the Secretary of the board of directors suspected of divulging secrets involves increasing the holding of Haili shares

On November 2, the official website of Guangdong Securities Regulatory Bureau disclosed a decision on administrative punishment. Guangdong Securities Regulatory Bureau filed a case to investigate and hear Yu Yun’s insider trading in Haili shares (600619). It was found that Yu Yun was involved in insider trading. Guangdong securities regulatory bureau decided to confiscate Yu Yun’s illegal income of 921700 yuan and impose a fine of 2765100 yuan, totaling 368.8 million yuan 68 thousand yuan. The administrative penalty decision also details the formation and disclosure process of the insider information, as well as the implementation of insider trading by the parties concerned. Securities Times · e company reporter noticed that Wang Jingdong, former Director Secretary of Gree Electric appliances, was also involved. In the middle of August this year, Wang Jingdong suddenly “resigned” from all positions of Gree Electric appliances without any warning in advance, which once surprised the market. According to the decision on administrative penalty, on April 20, 2018, Dong Zhaozhu, chairman of Gree Electric appliances, informed Wang Zhaodong, then vice president and Secretary of the board of directors, that he hoped to reduce the cost of holding shares and increase the right of discourse of shareholding by continuing to increase the holding of “Haili shares”. On the same day, Gree Electric held a general manager’s office meeting to consider continuing to increase its holding of “Haili shares”. The participants included Dong, Wang and Liu. After the meeting, Wang asked Liao and Li to increase their holdings of “Haili shares” in the secondary market. < p > < p > from April 23 to July 4, 2018, Liao and Li continued to increase their holdings of “Haili shares” in the secondary market by operating the securities accounts of Gree Electric appliances. < p > < p > on July 5, 2018, Haili company disclosed the simple form equity change report, which said that Gree Electric continuously increased its holding of “Haili shares” through centralized bidding in the secondary market, and its shareholding ratio changed from 5% to 10%. As a shareholder holding 5% of Haili shares, Gree Electric Co., Ltd. plans and implements the increase of holding of Haili shares to change its shareholding ratio from 5% to 10%, which constitutes a major event referred to in item 8, paragraph 2, Article 67 of the securities law of 2005, which belongs to the insider information referred to in Item 1, paragraph 2, Article 75 of the securities law of 2005. The sensitive period of insider information is from April 20 to July 5, 2018, and Wang Xiaodong is the insider of inside information and knows the inside information no later than April 20, 2018. According to the decision on administrative punishment, Yu Yun, the party involved in the case, opened the Guojin securities account on June 22, 2017. The trading funds of the account came from Yu Yun’s family income accumulated through years of work, which was actually controlled and decided by himself. During the period from May 30 to July 2, 2018, the account purchased 930300 shares of “Haili shares”, with the purchase amount of RMB 10.0299 million. During the period from June 27 to July 9, 2018, 930300 shares of “Haili shares” were sold in “Yuyun” account, with the selling amount of RMB 10.9024 million. According to the calculation of the stock exchange, the profit amount of Yu Yun’s related transactions is 935700 yuan, after deducting 14026.12 yuan of dividend tax, the profit amount is 921700 yuan. < p > < p > after investigation, Yu Yun had a close relationship with Wang Xiaodong, an insider of inside information. During the period of insider information sensitivity, Yu Yun had four telephone contacts. When chatting with other people outside the case on wechat, Yu Yun clearly mentioned that “if you have money to buy Haili, it will be announced tomorrow”. < p > < p > Guangdong Securities Regulatory Bureau believes that the capital change and purchase time of Yu Yun’s trading in “Haili shares” are basically consistent with the formation, change and disclosure time of inside information; during the period of insider information sensitivity, Yuyun’s account trades “Haili shares” intensively, and the trading amount is gradually enlarged, the buying will is continuously strengthened, and the trading behavior is obviously abnormal. Yu Yun could not provide any justifiable reason or reasonable explanation for the above abnormal trading behavior. Yu Yun’s above-mentioned behavior violates the provisions of Article 73 and paragraph 1 of Article 76 of the securities law of 2005, and constitutes the insider trading behavior described in article 202 of the securities law of 2005. < p > < p > during the sensitive period from April 20 to July 5, 2018, the stock price of Haili shares increased by 16.84%. On July 9, the third trading day after the announcement of the increase in holdings, Haili shares had large volume trading limits, and this day was also the last day of Yu Yun’s clearance of Haili shares. It is worth mentioning that, at the request of Yu Yun, Guangdong securities regulatory bureau also held a hearing to hear Yu Yun’s statement and defense. In his defense opinion, Yu Yun pointed out that the identification of the insider information involved in the case and its sensitive period was not accurate; there was no direct evidence to prove that the party had obtained the inside information, and the evidence on the case was not enough to presume that the party concerned had illegally obtained the inside information; the punishment of “no one penalty for three” was too heavy. < p > < p > for Yu Yun’s plea, Guangdong securities regulatory bureau also reviewed, and finally found that the inside information and sensitive period of the case were correct. Three reasons are given: first, Gree’s continued increase in holdings after holding 5% of “Haili shares” will be studied and decided by relevant decision-making system. In the specific implementation, although it can be divided into three stages, the process is also consistent, so the consolidation of the three stages should be identified as the same matter. < / P > < p > secondly, from the perspective of the shareholding structure of Haili at the end of 2017, Gree Electric Co., Ltd. held 5% of the shares at that time, and ranked the third largest shareholder of the company. Its subsequent increase in holdings had a great impact on the production and operation decisions of Haili shares, which may have a greater impact on the stock trading price of listed companies, and it has the “significance” of insider information. < / P > < p > Third, Gree Electric purchased a large number of “Haili shares” from April 23 to June 22, 2018, accounting for 74% of the total number of shares purchased during the insider information sensitive period, accounting for 3.7% of Haili shares. After the increase, its shareholding ratio has increased from 5% to 8.7%, and the shareholding ratio has changed greatly. < p > < p > with regard to Yu Yun’s argument that there is no direct evidence and the evidence on the case is insufficient, Guangdong securities regulatory bureau said that the existing evidence can confirm that Yu Yun’s trading in “Haili shares” constitutes insider trading. First, Yu Yun’s explanation of his contact with Wang can not exclude the possibility of Wang passing inside information to him. Second, the wechat chat records kept by Yu Yun’s mobile phone show that he is more certain about the contents of inside information. Third, the capital change, trading time and the formation, change and disclosure time of “Haili shares” in account centralized trading are basically consistent, and there is the behavior of sudden transfer of funds, and the transaction is obviously abnormal. < p > < p > with regard to Yu Yun’s opinion that the punishment is too heavy, Guangdong securities regulatory bureau holds that it is in line with the relevant provisions of the securities law of 2005 to confiscate the profit amount as the illegal income and impose a fine of three times the illegal income. The specific illegal circumstances of the party concerned are also taken into account. The existing evidence is not enough to prove that the party concerned has the situation of lighter or mitigated administrative punishment, and the amount of penalty should be imposed Appropriate. Dong Jingli was involved in the insider trading of Dong Jingli, one of the former insiders of the company. According to the facts of the case, Yu Yun and Wang Jingdong are closely related. During the sensitive period of insider information, the two men had four telephone contacts. Although there is no direct evidence to prove that Wang Jingdong leaked the inside information to Yu Yun, Wang Jingdong himself is suspected of leaking the inside information. < p > < p > on the evening of August 17 this year, Gree Electric issued an announcement. On that day, the company received a written resignation report from Wang Jingdong, director, vice president and Secretary of the board of directors. Wang Jingdong applied to resign from the position of director, vice president and Secretary of the board of directors for personal reasons. After resignation, Wang Jingdong no longer holds any position in the company. < / P > < p > before that, on August 6, the board of directors of Gree Electric Appliances deliberated and passed the proposal on dismissing Mr. Wang Jingdong as the financial director of the company due to the internal work post adjustment, Wang Jingdong no longer holds the post of financial director of the company, but still serves as the director, vice president and Secretary of the board of directors, and the work adjustment will not affect the normal development of relevant work of the company. As for Wang Jingdong’s naked resignation, a capital circle person who has been paying close attention to Gree Electric appliances for a long time believes that if Wang Jingdong does disclose inside information, it is likely to become one of the reasons for his resignation, so as to separate his personal behavior from the listed company. Wang Zhibin, partner of Shanghai Minglun law firm, said in an interview with a reporter from securities times · e company that the Secretary of the board of directors, as an executive of a listed company, belongs to the scope of insiders. If the Secretary divulges the inside information, it is obviously an illegal act, and even does not exclude the crime of disclosing inside information. According to Article 180 of the criminal law of the people’s Republic of China, the insider of securities and futures trading or the personnel who illegally obtain the inside information of securities and futures trading purchase or sell the securities before the issuance of securities, securities, futures trading or other information that has a significant impact on the price of Securities and futures trading, or A person who engages in futures trading related to the inside information, or divulges the information, or explicitly or implicitly implies others to engage in the above-mentioned trading activities, constitutes the crime of insider trading or disclosing insider information. If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention and shall also, or shall only, be fined not less than one time but not more than five times the illegal gains; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than 10 years and shall also be fined not less than one time but not more than five times the illegal gains. In June 2013, Liu Yubin, the then Secretary of Shengyun shares, was placed on file for investigation by the Securities Regulatory Commission (CSRC). In May 2018, Wang Zhigang, then Director Secretary of Guangzhou Langqi, received a supervision letter from Shenzhen stock exchange due to the disclosure of insider information through wechat. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.