The “sequelae” of illegal guarantee continues

* the “sequelae” of St Great Wall’s illegal guarantee incident is still emerging. Recently, the * ST Great Wall (formerly known as great wall film and television), which is in the critical period of shell preservation, received another regulatory letter. < p > < p > according to the regulatory letter, zhongtianyun Certified Public Accountants issued an audit report on the company’s financial report for 2019 due to illegal external guarantee, significant uncertainty in the ability of going concern and other factors. *The 9 directors and supervisors of St Great Wall, including Chen Zhiyong, Jiang Jianlin, Chen Xiangming, Gu Guixin and Zheng Xilai, failed to fulfill their duties and duties in the above events, which violated the provisions of article 1.4, article 2.2 and article 3.1.5 of the Listing Rules of Shenzhen Stock Exchange (revised in November 2018). < / P > < p > according to the public information of Shenzhen Stock Exchange, since the beginning of 2020, the management department of SME Board companies of Shenzhen Stock Exchange has issued five regulatory inquiry letters to * ST Great Wall. < / P > < p > on January 11, 2019, the guarantee provided by great wall film and television to the controlling shareholder was “exposed”. That evening, the company issued a major litigation notice. According to the announcement, on September 20, 2018, Great Wall group and Hengqin Sanyuan qinde Asset Management Co., Ltd. (hereinafter referred to as “Hengqin Sanyuan”) signed the “Cooperation Framework Agreement” and “loan agreement”, which agreed that Hengqin Sanyuan would provide 350 million yuan of financing loan to Great Wall group. Due to the dispute over the performance of the core terms between the two sides, Hengqin sued Great Wall group and its listed company, great wall film and television. < / P > < p > the reason why the listed company was sued is that in the letter of guarantee provided by Great Wall group to Hengqin Sanyuan, great wall film and television, as the guarantor, bears joint and several liability for the above loan. From the financial point of view, the guarantee amount of 350 million yuan accounted for 53.68% of the listed company’s audited net assets at the end of 2017. Great wall film and television should timely perform the deliberation procedures and the obligation of credit. < p > < p > in March 2019, Jiangsu Securities Regulatory Bureau ordered great wall film to take corrective regulatory measures and recorded it in the integrity file of the securities futures market for failing to perform the deliberation procedures of the board of directors and the general meeting of shareholders, illegally providing joint and several liability guarantee for the loan of 350 million yuan from the controlling shareholder, and failing to disclose it as required. On May 21, 2019, the Shenzhen Stock Exchange issued a disciplinary decision to reprimand great wall film and television, Hu Xiaofang, general manager of great wall film and television, and Zhou Manhua, chief financial officer of great wall film and television, and publicly reprimand Great Wall group, its actual controller Zhao ruiyong, and Zhao ruiyong, chairman of great wall film and television. < / P > < p > in 2020, the adverse situation caused by illegal guarantee storm is still spreading to great wall film and television. In June 2020, zhongtianyun Certified Public Accountants (special general partnership) issued an audit report on the company’s financial report for 2019, which was unable to express an opinion. The basis for the formation of the audit opinion was illegal provision of external guarantee, significant uncertainty in the ability of going concern, investigation by China Securities Regulatory Commission, uncertainty in the provision of goodwill impairment at the end of the period, Limited letter of confirmation, etc. < / P > < p > based on the fact that the accounting firm is unable to express audit opinions, the Shenzhen Stock Exchange recently issued a regulatory letter saying that the company’s directors Chen Zhiyong, Jiang Jianlin, Chen Jun and Yu Bo, then directors Chen Xiangming and Gu Guixin, and company supervisors Zheng Xilai, Xia Chuanbin and Zhu Ling failed to fulfill their duties of diligence, which violated the relevant provisions of the Shenzhen Stock Exchange and required the company to pay full attention to them We should learn from the above problems and rectify them in time to prevent them from happening again. < p > < p > “according to relevant regulations, Dong Jiangao has the duty of diligence to the company. From the perspective of the listed companies themselves, it is also a self-restraint mechanism that should be set up in order to prevent the “one word” phenomenon in the corporate governance structure and maintain the relationship of mutual checks and balances. From the outside, there are a series of laws and regulations. If the relevant personnel violate the relevant provisions, they need to be punished if the circumstances are serious, so as to play a deterrent role of the law. ” Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, said in an interview with Securities Daily. The reporter noticed that among the directors named, Chen Xiangming and Gu Guixin have resigned. On October 14 this year, the company announced that the board of directors received Gu Guixin’s written resignation report on October 10. Gu Guixin applied to resign as a director of the company and a member of the nomination committee of the board of directors for personal reasons. Another director, Chen Xiangming, also resigned as a director in mid December. < / P > < p > on the evening of December 14, the new delisting rules, which had been brewing for a long time, came. The Shanghai and Shenzhen stock exchanges have successively issued new rules for delisting (Draft for comments), optimizing the delisting standards and procedures. As the company’s financial and accounting report in 2019 was issued by the accounting firm with audit report unable to express opinions, the net profit attributable to the listed company in 2018 and 2019 * ST Great Wall was negative after audit for two consecutive accounting years, and the net assets attributable to the listed company in 2019 was negative. In June this year, great wall film and television was implemented delisting risk warning, and the stock name was changed from“ “Great wall film” is changed to “* ST Great Wall”. Once the “film and television backdoor first share” is now facing the risk of delisting. According to the statistics of Oriental Fortune choice, the company’s share price has dropped by more than 50% in the past six months, from the highest of 2.15 yuan / share to the lowest of 1.03 yuan / share. As of December 28, 2020, the company’s share price has closed at 1.07 yuan / share. < / P > < p > the performance of the third quarterly report is often the prelude to the success of shell protection of * ST company. According to the financial data, the net profit of * ST Great Wall attributable to the shareholders of the listed company in the first three quarters of this year was – 74.4013 million yuan, and whether the annual performance can turn loss into profit has not been disclosed. < / P > < p > in this regard, * ST Great Wall said in an interview with the Securities Daily that the company actively responded to the temporary difficulties and challenges, and always insisted on returning to the main business. At the same time, the company is cooperating with Shaoxing Youchuang health management partnership (limited partnership), the buyer of Zhuji film and Television City, to negotiate the repayment plan with creditors and actively promote the sale of Zhuji film and television city Matters. < / P > < p > * ST Great Wall said that the TV series “Premier Zhou Enlai” and “hot blooded shooter” invested and shot have all obtained the “domestic TV series distribution license”, and the company’s Distribution Department is stepping up negotiations with CCTV and major TV stations on the issue, and will carry out accounting treatment according to the subsequent distribution situation and the requirements of accounting standards. < / P > < p > Kuang Yuqing, a third-party research institution and founder of lens company, is cautious about the shell preservation of * ST company. Kuang Yuqing believes that “speeding up the delisting, simplifying the delisting, and withdrawing as much as possible are the work being pushed forward by the two major exchanges. In fact, this is to prevent some companies from changing their ways to operate worthless capital, which is actually not conducive to the healthy development of the capital market. For companies with sustainable operation problems and huge defects in corporate governance system, if the delisting conditions are triggered, they should be withdrawn. ” < / 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. 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