*St Tianrun’s 800 million acquisition of counterparties compensates for breach of contract

Recently, the website of China Securities Regulatory Commission announced the decision to issue a warning letter to relevant responsible persons such as guilifeihuang Investment Center (limited partnership) in Xinyu City. According to the decision, Hunan Tianrun digital entertainment, culture and Media Co., Ltd. (hereinafter referred to as “Tianrun digital entertainment”, stock abbreviated as * ST Tianrun, code 002113. SZ) completed the acquisition of 100% equity of Shanghai dianle Information Technology Co., Ltd. (hereinafter referred to as “dianle”) by non-public offering of shares to raise funds on April 18, 2016, with a transaction amount of RMB 800 million. < / P > < p > in this transaction, guilifeihuang Investment Center (limited partnership), Ledian Investment Center (limited partnership), Lianchuang Shengjing Investment Center (limited partnership), Bingma Pentium Investment Center (limited partnership), junchuang Mingshi Investment Center (limited partnership), Xiancheng Xinyang Investment Center (limited partnership) and Wuxi tianlerun Investment Center (limited partnership) are listed The partnership (limited partnership) (hereinafter referred to as “seven companies”) undertakes that the net profit of diandianle in 2015, 2016 and 2017 after deducting the non recurring profit and loss attributable to the shareholders of the parent company shall not be less than RMB 65 million, RMB 81.25 million and RMB 101.5 million respectively. If the profit fails to meet the commitment, Tianrun digital entertainment shall be compensated by cash and shares held. < / P > < p > according to the special audit report on the achievement of performance commitment of Shanghai dianle Information Technology Co., Ltd. in 2017 issued by zhongshenhua Certified Public Accountants (special general partnership), the net profit of dianle attributable to the shareholders of the parent company in 2017 was 27.7715 million yuan, and the net profit attributable to the shareholders of the parent company after deducting the non recurring profit and loss was 26.9746 million yuan, the net profit of which was 26.9746 million yuan At the same time, seven companies failed to fulfill their performance compensation commitments. < p > < p > Hunan securities regulatory bureau pointed out that as commitment parties, the above behaviors of seven companies constituted overdue failure to fulfill their commitments. According to the relevant provisions of Article 59 of the measures for the administration of material assets reorganization of listed companies (Order No. 159 of the CSRC), the administrative supervision measures of issuing warning letters are adopted for the seven companies, requiring them to earnestly fulfill the compensation obligations promised to the listed companies. < / P > < p > according to the inquiry of China economic network, in November 2015, Tianrun digital entertainment released a plan for non-public issuance of a shares. The company plans to raise a total amount of 830 million yuan, the issue price is 11.82 yuan / share, and the number of shares issued does not exceed 70.22 million shares. After deducting the issue cost, the raised funds are all used to acquire 100% equity of Shanghai dianle Information Technology Co., Ltd And replenish the working capital. The company has signed the equity transfer agreement for the acquisition of the target company with the shareholders of dianle on March 31, 2015, and the supplementary equity transfer agreement for the acquisition of the target company with the shareholders of dianle on May 27, 2015, to acquire all the shares of the company for cash consideration of RMB 800 million. After the acquisition, the target company becomes a wholly-owned subsidiary of the company. The sponsor is China CITIC Construction Investment Securities Co., Ltd., and the sponsor representatives are Zhao Xu and Fu Biao. < p > < p > Article 59 of the measures for the administration of major asset restructuring of listed companies (Order No. 159 of the CSRC) stipulates that after the implementation of major asset restructuring, the profit realized by the assets purchased by the listed company does not reach 80% of the predicted amount in the asset appraisal report or valuation report, or the actual value of the assets purchased by the listed company due to reasons beyond the prior knowledge and subsequent control of the management of the listed company If there is a big gap between the international operation and the management’s discussion and analysis in the major assets restructuring report, the board chairman and general manager of the listed company, as well as the accounting firm, financial consultant, asset appraisal institution, valuation institution and their employees who bear the corresponding responsibility for it, shall make an explanation in the same newspaper and report it to the public at the same time of disclosing the annual report of the listed company If the investors make a public apology and the realized profit does not reach 50% of the predicted amount, the CSRC may take regulatory measures such as regulatory talks, issuing warning letters and ordering regular reports on the listed companies, relevant institutions and their responsible personnel. < / P > < p > Xinyu guilifeihuang Investment Center (limited partnership), Xinyu Ledian Investment Center (limited partnership), Xinyu Lianchuang Shengjing Investment Center (limited partnership), Xinyu Bingma Pentium Investment Center (limited partnership), Xinyu junchuang Mingshi Investment Center (limited partnership), Xinyu Xiancheng Xinyang Investment Center (limited partnership), Wuxi tianlerun investment partnership (limited partnership) Limited partnership): < / P > < p > on April 18, 2016, Hunan Tianrun digital entertainment culture media Co., Ltd. (hereinafter referred to as “Tianrun digital entertainment”) completed the acquisition of 100% equity of Shanghai dianle Information Technology Co., Ltd. (hereinafter referred to as “dianle”) by non-public offering of shares to raise funds, with a transaction amount of 800 million yuan. In this transaction, you promise that the net profit of Diandian le in 2015, 2016 and 2017 after deducting the non recurring profit and loss attributable to the shareholders of the parent company will not be less than 65 million yuan, 81.25 million yuan and 101.5 million yuan respectively. If the profit does not reach the promised amount, you should compensate Tianrun digital entertainment with cash and shares. According to the special audit report on the achievement of performance commitment of Shanghai dianle Information Technology Co., Ltd. in 2017 issued by zhongshenhua accounting firm (special general partnership), the net profit of dianle attributable to the shareholders of the parent company in 2017 was 27.7715 million yuan, and the net profit attributable to the shareholders of the parent company after deducting the non recurring profit and loss was 2, 6.9746 million yuan, the net profit did not reach the commitment, and you did not fulfill the performance compensation commitment. < / P > < p > as the commitment party, your above actions constitute overdue failure to fulfill the commitment. In accordance with the relevant provisions of Article 59 of the measures for the administration of material assets reorganization of listed companies (Order No. 159 of the CSRC), we hereby take the administrative supervision measures of issuing a warning letter to you, and you should earnestly fulfill the compensation obligation promised to the listed companies. < / P > < p > if you are not satisfied with the supervision and management measures, you can apply for administrative reconsideration to China Securities Regulatory Commission within 60 days from the date of receiving this decision, or file a lawsuit to the people’s court with jurisdiction within 6 months from the date of receiving this decision. During the period of reconsideration and litigation, the above supervision and management measures shall not be suspended. < / 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.