“Ultimatum” issued by Shenzhen Stock Exchange

In 33 trading days, the cumulative increase of 220.35% – “demon stock” Yu diamond (300064) has been astonishing recently. What is more surprising is that the company refused to reply to the two inquiry letters from the regulatory authorities, and the Shenzhen Stock Exchange had to give an ultimatum! < p > < p > on the evening of October 27, the announcement released by yudiamond showed that Shenzhen stock exchange sent letters to the company on September 1 and 14, asking the company to explain relevant problems, but the company did not reply. If the company fails to reply to the inquiry before November 27, the Shenzhen Stock Exchange will implement other risk warnings and relevant suspension and resumption of trading of the company’s shares. < / P > < p > “no answer, no answer at all”. On October 27, a senior accountant told the China Securities Journal that the sharp rise in the share price of Henan diamond lacked fundamental support. “If the company does not answer, the share price may continue to rise, and if it answers, it is likely that the stock price will stall. It is suggested that the regulatory authorities should strictly investigate whether there is any interest arrangement behind the confusion.”. < p > < p > in fact, the correspondence that yudiamond has not answered so far is only a small part of many regulatory letters. According to the regulatory information of Shenzhen Stock Exchange, Henan diamond has received 10 regulatory letters since this year, including 8 letters of concern and 2 letters of inquiry on periodic reports. However, most of these letters have not been answered. According to the announcement, the management department of gem of Shenzhen Stock Exchange successively sent letters to the company on September 1 and September 14 (GEM half yearly report inquiry letter [2020] No. 13, gem concern letter [2020] No. 435), requiring the company to verify whether it has touched other risk warning situations, whether there are feasible solutions and expected solution period. As of October 26, the company has not answered the relevant questions. < p > < p > as said by the above-mentioned accountants, the issue of Shenzhen stock exchange is directly at the core, which requires Yu diamond to explain the company’s risks and the “timetable” to solve the company’s fundamental problems. But for the company, Yu diamond is in trouble. On the one hand, there are many lawsuits. As of October 14, Henan diamond has been involved in 65 litigation / arbitration cases with a total amount of about 4.797 billion yuan, including 61 litigation cases involving the company and its holding subsidiary as defendants, with the case amount of about 4.567 billion yuan; and 4 litigation cases involving the company and its holding subsidiary as the plaintiff, with the case amount of about 230 million yuan. Due to litigation matters, most of the company’s bank account funds, land, foreign investment equity were frozen and sealed up, bank loans, bills payable, letters of credit, financial leasing long-term accounts payable were overdue, and there were significant uncertainties in the ability of sustainable operation. The company, the controlling shareholder and the actual controller of the company are listed as the dishonest executee because the relevant litigation cases fail to perform the payment obligations determined by the effective legal documents within the period specified in the execution notice. On the other hand, on April 7, 2020, the company received the investigation notice of China Securities Regulatory Commission (yscz No. 2020013). China Securities Regulatory Commission decided to file a case against the company for suspected illegal information disclosure. At present, during the period of investigation, no concluding comments or decisions have been received. < p > < p > under all kinds of violations, the risk of Yu diamond’s operation is increasing, and the risk of the company being “ST” is rising. The audit institution of the company has audited the financial statements and notes to the financial statements in 2019 and issued the audit report with qualified opinions. Up to now, the above reservations have not been eliminated. In addition, in 2019, the company’s net profit attributable to shareholders of listed companies was 5.197 billion yuan, a decrease of 5493.97% compared with the same period of last year. In the half year of 2020, the company’s net profit loss attributable to shareholders of listed companies was 357 million yuan, down 853.67% compared with the previous year. The operation risk of the company is increasing. < p > < p > according to Ifind data, as of October 26, Yu diamond has increased by 220.35% in the past 33 trading days, known as the new generation of demon stocks. Not only that, the market performance of Henan diamond since August 21, the capital behind the “crime against the wind” is increasingly prominent. < p > < p > according to the announcement, due to the company’s stock price on September 7 and September 8 for two consecutive trading days, the stock closing price deviation value accumulated more than 30%, reaching the abnormal fluctuation standard, and the trading of Henan diamond was suspended since the opening of the market on September 9. < p > < p > in view of the catalyst that may cause market speculation, Yu diamond pointed out after verification that the company is concerned about the market rumor that the company involves the concept of the third generation semiconductor. The company has no business related to the third generation semiconductor, nor has it contributed income and profit due to the third generation semiconductor materials. After inquiry with the controlling shareholder and actual controller, the company’s controlling shareholder and actual controller do not have any major matters that should be disclosed but not disclosed by the company, and there are no undisclosed major events related to the company in the planning stage. In recent years, the company has been highly qualified by the major shareholders Risk transmission, such as mortgage ratio, debt crisis, etc., the company is involved in a number of litigation matters, resulting in the freezing and sealing up of funds, land and foreign investment equity, which has a certain impact on the company’s liquidity and market reputation, and the company is still in production and operation Although Yu diamond tried to clarify the facts, it did not affect the enthusiasm of speculative funds in the secondary market. On September 22, after the resumption of the trading of Yu diamond, its stock price rose by a large amount for two consecutive trading days. After four trading days of decline, its share price reached a new high of 8.67 yuan / share in the next 10 trading days. < p > < p > wind data shows that since September 1, most of the active trading seats of Henan diamond are hot money seats. The top five places on the list of diamond trading in Henan Province are: the second business department of Tuanjie Road, Lhasa, Dongfang Fortune Securities (8 times on the list), No.2 Business Department of Lhasa East Ring Road of Dongfang Fortune Securities (6 times on the list), institutional seats (2 times on the list), Shanghai Branch of Ping An Securities (2 times on the list), and Qingchun Road of Caixin securities (2 times on the list). < p > < p > among them, the second business department of Tuanjie Road, Lhasa, Dongfang Fortune Securities is a frequent customer on the list of dragon and tiger. According to Ifind data, in the past year, the seat has been listed 2317 times, with a total transaction capital of 41.504 billion yuan, 1980 times of buying, 23.160 billion yuan of buying amount, 1919 times of selling and 18.344 billion yuan of selling amount. In addition to Yu diamond, there are many stocks in the recent operation of the seat, such as Zhongneng electric, Jujie microfiber, Jianglong boat, yingfeite, etc., which have a large short-term increase, as well as Xinhe shares, Shanghai Kaixin and other new shares with smaller circulation. < p > < p > it is worth noting that the Shenzhen Stock Exchange has paid close attention to the market’s query on “demon stocks”. The inspection department of the CSRC has formally filed and investigated the relevant accounts with abnormal transactions in Tianshan biological, Henan diamond and long group. In addition, on April 7 this year, Henan diamond received the notice of investigation. Because the company was suspected of illegal information disclosure, the China Securities Regulatory Commission decided to file an investigation on the company according to law. < p > < p > in accordance with the requirements of Shenzhen Stock Exchange, yudiamond must reply to the relevant inquiries of Shenzhen Stock Exchange before November 27. However, at present, Yu diamond received a serious backlog of inquiries. The company has previously said that, due to the large amount of work to be checked and replied to in the letter, there are many litigation items involved, and due to the new progress of relevant litigation, further verification and confirmation and verification with relevant parties are still needed after comprehensive verification. As for the reply to the remaining questions, the company said that it would strive to complete and fulfill the obligation of information disclosure as soon as possible. < / 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.