① In response to questions from Blue Whale reporters, the director of Nikko Fashion said that the target company (of this restructuring) is still committed to completing related work, and that the termination of asset restructuring has nothing to do with “mineral rights defects.” ② The reporter checked the official website of the relevant government agency in the Democratic Republic of the Congo (DRC). The previous transfer of some of the mineral rights involved in this restructuring was deemed illegal. ③ The Japanese broadcaster Fashion revealed the restructuring plan eleven before and after, but the new actual controller, Leung Fung, invested heavily, but it was difficult to complete the restructuring.
Financial News Agency, November 8 (Blue Whale reporter Li Zijian)It only obtained actual control rights from Nikko Fashion (603196.SH), but failed to invest its subsidiary Jin Yuansheng's assets, which clearly did not meet Leung Fung's expectations. Meanwhile, at an investor briefing on the termination of major asset restructuring held today, Nikbo Fashion Director Hu Aibin said in response to questions from Blue Whale reporters that the target company is still working to complete related work.
Due diligence, audit, and evaluation of overseas (mineral rights) assets is extensive and complex, and it is not possible to specify the exact completion time for the time being. This is the reason why Nikko still explained the termination of its asset restructuring. The reporter, on the other hand, learned through public information that some of the companies that are the subject of this restructuring have obtained or are flawed in overseas mining rights. According to the official websites of relevant government agencies in the Democratic Republic of the Congo (DRC), some previous transfers of mineral rights have been deemed illegal. However, a few days ago, Nippon Broadcasting Company responded to a reporter saying that the mining rights held by the target company all meet the requirements of relevant local laws and regulations.
In the second quarter of this year, before and after Nikko Fashion suspended trading and revealed the restructuring plan, there were 11 consecutive stock prices, and some Niusan Group opened positions ahead of schedule to enter the shareholders' list.
“The target company is still working to complete the relevant work”
Once upon a time, the 11th consecutive board showed the “King's Atmosphere” in the daily broadcast fashion. Recently, it was announced that major asset restructuring would be terminated. The Japanese broadcaster explained that due diligence, audit, and evaluation of the target company's metal and mineral resources development and smelting and processing assets in the Democratic Republic of the Congo (DRC) and Indonesia involved a lot of communication and coordination with project partners and relevant local government agencies. The overall due diligence inspection workload is heavy and complex, so it is not possible to specify the exact completion time for the time being.
According to Nikko Fashion, the company does not expect to issue a notice to hold a shareholders' meeting within six months after the announcement of the first board resolution of this transaction. After careful study by the company and the parties involved in the restructuring, it was decided to terminate this major asset restructuring matter.
The Blue Whale reporter checked the “Guidelines for Self-Regulatory Supervision of Listed Companies on the Shanghai Stock Exchange No. 6 - Major Asset Reorganization” and saw that if the board of directors does not issue a notice to hold a shareholders' meeting within six months, the listed company should disclose a special statement on not issuing a notice to hold a shareholders' meeting within six months. The special statement should explain the reasons and clarify whether to continue or discontinue.
This means that if termination of asset restructuring is not the only option for Japanese broadcast fashion due to reasons such as due diligence on overseas assets, etc., listed companies can also continue to move forward after explaining the reasons in a special explanation.
In response to questions from Blue Whale reporters at an investor briefing on the termination of major asset restructuring matters, Hu Aibin, director of Nikko Fashion, said today that the target company is still working to complete the relevant work, but it is not possible to specify the exact completion time for the time being. After that, after all parties meet the conditions, negotiations will (will) be held on whether to continue advancing matters related to the restructuring.
Although the restructuring came to an abrupt end, Nikko Fashion had already completed a change of ownership before. As the new actual controller, Liang Feng is also the actual controller of Putailai, an A-share battery materials factory. Prior to that, he also served as the general manager, executive director, and chairman of Shanghai Yiyang Investment Management Co., Ltd.
According to the previous announcement of Nikko Fashion, by transferring shares, exchanging assets, and issuing shares, Liang Feng may want to replicate the transformation of Shanshan Shares through a series of capital “show-offs”. However, Nikko Fashion has now terminated asset restructuring, which means that even after obtaining actual control over the company, it will be difficult for Leung Fung to complete the “swing cage in exchange for birds.”
Nikko Fashion responds to “mineral rights flaws” doubts and claims of compliance
Under the explanation that due diligence on overseas mineral resources is currently unable to clarify the exact completion time, according to public media reports, “Jin Yuansheng's multiple mining rights in the Democratic Republic of the Congo (Gold) have been identified as illegal transfers or disputes due to the involvement of 'cheap sales', which conceal huge risks.” A few days ago, Nippon Broadcasting System responded to a reporter saying that there are no lawsuits, penalties, or other disputes over mining rights.
According to the disclosure in the previous announcement, Nikko Sheng originally planned to lay out all of its assets and liabilities, and put in 100% of Jin Yuansheng's shares to replace the difference in asset transaction prices to raise supporting capital by issuing shares to specific investors.
Jin Yuansheng is a company owned by Liang Feng. In the last three years and phase 1, Jin Yuansheng's revenue has mainly come from resource development and sales of cathode copper products in the metal smelting sector. The cathode material precursor business has not yet generated revenue, and the revenue generated by cathode materials, crude cobalt hydroxide, and cobalt sulfate accounts for relatively low revenue.
In fact, compared to the currently competitive cathode materials industry, the capital market may pay more attention to Jin Yuansheng's mineral resources. In response to the inquiry letter, the Japanese broadcaster stated that Jin Yuansheng obtained a total of 13 mining rights, 5 leased mining rights, and 1 leased tailings mining right in the Democratic Republic of the Congo (DRC), and 1 mining right in Indonesia.
However, according to public media reports, “Jin Yuansheng's two mining rights' PE12436 'and' PE12450 'have now been deemed an illegal transfer by the General Financial Supervisory Authority of the Democratic Republic of the Congo (DRC).”
The Blue Whale reporter learned from the official websites of relevant government agencies in the Democratic Republic of the Congo (DRC) that according to a report disclosed by the General Supervisory Authority of the Democratic Republic of the Congo (DRC) in September 2022, several mineral rights transfers by the Congolese (DRC) state-owned enterprise COMINIERE S.A were found to be illegal.
Image source: IGF official website Note: During the editing process, the Financial Services Association reporter used AI models and online software to translate. Actually, the original text prevails
Among them, COMINIERE S.A transferred PE12436 to DATHCOM Mining for development on 2017/12/7, the latter transferred to HONGKONG YISEN on 2018/12/7, and then transferred by HONGKONG EXCELLEN MINING INVESTMENT CONGO SARL on 2019/5/17.
Also, on 2017/6/7, COMINIERE S.A transferred PE12450 to DATHCOM Mining for development, which in turn transferred it to HONGKONG EXCELLEN MINING INVESTMENT CONGO SARL.
The Financial Supervisory Authority of the Democratic Republic of the Congo (DRC) believes that these illegal transfers violate the terms of the contract and harm the interests of COMINIERE S.A. In fact, the transfer of a mining license (Research Licensing) should incur transfer costs, and these costs should be owned by COMINIERE S.A.
Furthermore, turning them into a mining license (Operating Permit) should also pay an entry fee to COMINIERE S.A. The investigation team did not track these revenues.
According to the announcement disclosed by Nikko Fashion, Jin Yuansheng's counterparty for obtaining “PE12436” and “PE12450” mining rights is DATHCOM MINING SAS, which mutually confirms the above report. This side reflects that the final grantor of mining rights, HONGKONG EXCELLEN MINING INVESTMENT CONGO SARL, may be a company owned by Jin Yuansheng.
However, the Financial Supervisory Authority of the Democratic Republic of the Congo (DRC) did not clearly indicate the treatment plan for these illegal transfers in its report, and the HONGKONG EXCELLEN MINING INVESTMENT CONGO SARL is not a first-hand deal with COMINIERE S.A. It is still unknown whether the illegal transfer of COMINIERE S.A will affect the HONGKONG EXCELLEN MINING INVESTMENT CONGO SARL.
In response to the above questions, Nikko Fashion responded to the Blue Whale reporter, saying that according to due diligence, the mining rights held by the target company all meet the requirements of relevant local laws and regulations, are in a legal state of existence, will not affect the target company's control of the relevant mining rights, and there are no lawsuits, penalties, or other disputes over mining rights. The company also responded that “work such as due diligence verification of overseas assets fell short of expectations,” stating that it had nothing to do with the media's false reports.
The Blue Whale reporter noticed that the media also discovered a report released by the Democratic Republic of the Congo (DRC) Extractive Industry Transparency Initiative (ITIE-RDC) in 2020 that there is a dispute over the contract between KIK and the Democratic Republic of the Congo (DRC), including the signing of contracts between KIK and the Democratic Republic of the Congo (Gécamines). However, as of press time, the reporter has not been able to fully understand the source of the information.