Jinke culture chairman involved in insider trading has been put on file for investigation for more than one year, and has madly reduced its holdings for 70 times

Jinke culture disclosed on the evening of December 21 that it received a letter from Wang Jian, chairman of the board of directors, on the same day that he was put on file for investigation because he was suspected of insider trading in the company’s shares reduced from November 2019 to March 2020. < / P > < p > China Securities Journal (ID: xhszzb) noticed that Wang Jian began to reduce his shares madly after the lifting of the ban on restricted shares on June 10 last year. So far, he has reduced his shares 70 times and cashed out more than 700 million yuan in more than a year. During this period, Wang Jian received two regulatory warning letters due to illegal reduction, but still did not converge. < / P > < p > Wang Jian can be described as a young man. According to public information, he was born in 1988 and graduated from Zhejiang University of technology in 2009. In the second year after graduating from University, Wang Jian and his father founded Hangzhou zhexin Information Technology Co., Ltd. (hereinafter referred to as “Hangzhou zhexin”). At the beginning of its establishment, Hangzhou zhexin had a registered capital of only 1 million yuan. After continuous capital expansion, the registered capital of Hangzhou zhexin reached 50 million yuan in 2015. Hangzhou zhexin’s main business is game distribution and operation. As of the end of November 2015, its total assets are about 280 million yuan and its owner’s equity is about 250 million yuan. In the first 11 months of 2015, its operating revenue was about 250 million yuan and its net profit was about 30 million yuan. In 2016, Hangzhou zhexin was acquired by Jinke culture for 2.9 billion yuan. Before the merger, Wang Jian held 46.95% of the equity of Hangzhou zhexin. According to the consideration related to the merger, Wang Jian obtained a total of about 400 million yuan in cash and about 980 million yuan in Jinke culture shares. At the same time, Wang Jian also subscribed for the shares issued by Jinke culture in cash. Therefore, after the completion of the merger and acquisition, Wang Jian holds 17.98% of the shares of Jinke culture. Wang Jian also took the opportunity to serve as the director and chairman of Jinke culture. < / P > < p > the acquisition of Hangzhou zhexin is just the beginning. In 2017, Jinke culture acquired 71.4% equity of outfit7 Investments Limited (hereinafter referred to as outfit7) for a consideration of 4.2 billion yuan, and completed the acquisition of 100% equity of outfit7 the next year. By the end of 2019, the goodwill brought by the merger to Jinke culture is still 3.65 billion yuan. It is worth noting that Wang Jian was also one of the shareholders of outfit7 at that time – Hangzhou Doubao Network Technology Co., Ltd. < p > < p > as of December 2 this year, Wang Jian’s latest stock holding value is about 1.6 billion yuan. If we add in the previous cash out of about 750 million yuan, Wang Jian’s total assets are about 2.35 billion yuan. < / P > < p > the reporter of China Securities Journal noticed that the ban of 280 million shares held by Wang Jian was lifted on June 10, 2019, and he could not wait to start the road of reducing his shares from July 18, 2019. According to wind data, Wang Jian has reduced his holdings as many as 70 times in more than a year, and cashed out more than 700 million yuan. Its shareholding ratio also dropped from 17.72% to 11.89%, from the largest shareholder to the second largest shareholder of the company. < / P > < p > Jinke culture disclosed on February 4, 2020 that during the period from August 15 to August 27, 2019 and from October 16 to October 21, 2019, Wang Jian reduced 17.3784 million shares and 5.156 million shares of Jinke culture by means of centralized bidding due to compulsory position closing, accounting for 0.49% and 0.15% of the total share capital of Jinke culture respectively, and the total amount involved was about 57.99 million yuan. The above reduction occurred within 30 days before the disclosure of Jinke culture’s 2019 semi annual report and the third quarter report, which constituted a sensitive period transaction. < p > < p > Shenzhen Stock Exchange pointed out that Wang Jian’s above-mentioned behavior violated relevant regulations, and required Wang Jian to pay full attention to the above problems, learn lessons, rectify in time, and prevent the recurrence of the above problems. < / P > < p > however, Wang Jian obviously did not converge. In July this year, Wang Jian received another regulatory letter. The regulatory letter disclosed that on February 28, due to compulsory position closing, it reduced its holdings of 11.2413 million shares of Jinke culture through centralized bidding, accounting for 0.32% of the total share capital of Jinke culture, involving an amount of 48.23 million yuan. The above reduction occurred within 10 days before the disclosure of Jinke culture’s 2019 performance express. In October this year, Zhejiang Securities Regulatory Bureau issued a warning letter to Jinke culture and Wang Jian. Through investigation, from 2018 to April 2020, the company’s controlling shareholder Jinke Holding Group Co., Ltd. (hereinafter referred to as “Jinke holding”) and its related parties occupied the capital of Jinke culture for non operating purposes, with the amount of each period being 2.069 billion yuan, 4.331 billion yuan and 2.977 billion yuan respectively, and the balance at the end of each period being 212 million yuan, 1.549 billion yuan and 1.671 billion yuan respectively. The above matters failed to fulfill the obligation of information disclosure in accordance with relevant provisions. < / P > < p > when the major shareholders are faced with repaying the huge sum of money, the listed companies throw out the takeover plan. On July 17, Jinke culture disclosed the announcement on acquisition of assets and related party transactions. It plans to acquire 100% equity of Wanjin Trading Co., Ltd. (hereinafter referred to as “Wanjin trading”) from Jinke holding, the controlling shareholder of the company, in order to obtain relevant property assets. The transaction price is based on the assessed value of 1.663 billion yuan and is determined to be 1.55 billion yuan after consensus. < / P > < p > it is worth noting that the annual report of Jinke culture in 2019 shows that in 2019, Jinke holdings occupied 1.549 billion yuan of the company’s and its wholly-owned subsidiary’s own funds by way of the current funds from the third-party suppliers. Jinke holding promises to actively solve the problem of capital occupation by using cash, cash equivalents or other high-quality assets to offset debts, and pay the interest on capital occupation, return more than 50% of the total amount owed in the next three months, and fully repay it before the end of October 2020. < / P > < p > Jinke Culture said that in the process of this transaction, when purchasing assets from the controlling shareholder, the controlling shareholder shall return no less than 1.01 billion yuan in cash as one of the effective conditions of this transaction agreement, and only 1.008 billion yuan of consideration for purchasing assets shall be paid to the controlling shareholder in the early stage. While meeting the needs of business development of listed companies, it is conducive to invigorating the assets of controlling shareholders and solving the problem of capital occupation of listed companies as soon as possible by means of cash settlement. < / P > < p > Jinke culture is approaching the audit window, and the change of audit institutions is also concerned. In 2019, Tianjian Certified Public Accountants (special general partnership) issued a “qualified opinion” audit report on Jinke culture. The problems mainly focus on the accuracy and recoverability of the amount of funds occupied by related parties, the accuracy of IP copyright impairment provision of intangible assets, the accuracy of impairment provision for long-term equity investment and the accuracy of fair value of other equity instruments. < p > < p > on December 9, Jinke culture announced that it plans to appoint Ericsson Certified Public Accountants (special general partnership) as its audit institution in 2020. < / P > < p > in this regard, the Shenzhen Stock Exchange issued a letter of concern, requiring Jinke culture to explain the reasons for not continuing to employ Tianjian office, and there is a major dispute between the company and Tianjian office on whether the impact of the qualified opinion on the financial report in 2019 is eliminated. < / 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. 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