Author: Spicy Pen Xiaoqiang
Source: Dongfangcai.com
On the afternoon of September 4, the Shenzhen Stock Exchange issued an announcement stating that *ST Huaxin's listing will be terminated. As a result, *ST Huaxin became the third A-share company to be delisted for 20 consecutive trading days because its stock price was less than 1 yuan for 20 consecutive trading days after Zhonghong resigned and Young Eagle withdrew. What's embarrassing is that on the same day, the fourth “face value delisted” stock was locked down ahead of schedule. His name is*ST India (former name: Indic Media)
Third delisted stock with face value finalised
Not long ago, *ST Huaxin had a stock price of less than 1 yuan for 20 consecutive trading days from July 22 to August 16, making it the third company likely to face delisting due to face value after Zhonghong's retreat and Young Eagle's retreat.
Now, the Shenzhen Stock Exchange has given its own decision. On September 4, the Shenzhen Stock Exchange issued the “Notice Concerning Termination of Stock Listing of Anhui Huaxin International Holdings Co., Ltd.” stating that according to the provisions of section 14.4.1 (18) and section 14.4.2 of the “Shenzhen Stock Exchange Stock Listing Rules (November 2018 Revision)” and the review opinion of the IPO Committee, on September 4, 2019, the firm decided to terminate the listing of the company's (*ST Huaxin) shares and enter the delisting period from September 12, 2019. The period of the delisting period is 30 trading days. On the next trading day after the delisting period expires, the firm delisted the company's shares.
Photo source: Shenzhen Stock Exchange website
The stock price fell to a standstill, and there was no hope of standing at 1 yuan
Next, it's the*ST Inkji's turn. On September 4, *ST's Indic index fell to a halt and closed at 0.71 yuan/share. This is the 15th consecutive trading day since August 15, when the stock price was less than 1 yuan.
As a result, even if it rises and stops every day for the next 5 trading days (calculated at 5%, considering rounding), it will not be able to reach 1 yuan on September 11 (next Wednesday).
On the evening of September 2, *ST India issued its fourth risk alert announcement, stating that for 13 consecutive trading days (August 15, 2019 to September 2, 2019), the closing price of the stock was lower than the stock face value) (that is, 1 yuan). According to the relevant provisions of the “Shenzhen Stock Exchange Stock Listing Rules”, the listing of the company's shares may be terminated.
Photo Source: Company Announcements
Been the “richest man” and invested in “Iron Man”
This is the kind of company that is facing delisting. Once upon a time, it was a star stock with many aura.
According to public information, India Media successfully went public in 2014, selling high-tech food that mainly slaughtered pigs behind the shell. After completing asset restructuring and resumption of trading on April 8, 2014, the stock price rose and stopped for 7 consecutive days, soaring from 4.05 yuan (previous recovery, same below) before the resumption of trading to 8.03 yuan, nearly doubling.
Soon after, it coincided with the big bull market in 2015. Indic media took advantage of Dongfeng, and the stock price continued to soar, rising to a high of 27.81 yuan. Based on the latest total share capital calculation, the total market value reached 49.22 billion yuan.
Xiao Wenge, the actual controller of the company, also rose to prominence and reached the peak of his life. According to a report by Huaxi Metropolis Daily, during the 2015 stock market boom, the market value of Indic Media held by Xiao Wenge reached 34.9 billion yuan, ranking first in the list of the richest people in Sichuan.
Photo Source: Huaxi Metropolis Daily
In the 2016 Hurun 100 Rich List released by Hurun in October 2016, Xiao Wenge ranked 103rd among the richest people in China with a wealth of 21.5 billion yuan. In the 2015 “Forbes” list of the world's billionaires, Xiao Wenge ranked 894 among the world's billionaires with 2.1 billion US dollars.
On the other hand, as a company specializing in entertainment, film, television, and advertising and marketing, Indic Media has also appeared in many famous movies and TV dramas, including “Iron Man 3,” “The Ring Messenger,” “Transcendental Hacker,” “Extreme Thief,” “Durala's Advancement,” “No Man's Land,” and “The Founding of a Nation”; and of course, many TV dramas such as “No War in Beiping”, “Kara Lovers”, “Zero 38 Degrees”, and “City of Warriors”, etc. “The 12th Hour of Changan” is the latest hit.
Became an “old liar,” and his shares are waiting to be frozen
But now, the “richest man,” Xiao Wenge, has a huge headache. On May 15 of this year, India Discipline Media issued a “Notice Concerning Controlling Shareholders' Shares Waiting for Freezing”, stating that all 779 million shares of the company held by Xiao Wenge, the controlling shareholder of the company, were successively frozen by the Huangpu District People's Court of Shanghai and the Third Intermediate People's Court of Beijing. The waiting period is 3 years. However, this is the 7th time that Xiao Wenge's shares have been frozen.
The announcement further stated that since Mr. Xiao Wenge is the controlling shareholder and actual controller of the company, if the frozen shares held by Mr. Xiao Wenge are judicially disposed of, it may lead to a change in the actual control of the company.
Photo Source: Company Announcements
As his shares were frozen by the court, lawsuits followed one after another. By the end of 2018, Xiao Wenge and his co-actors had involved a total of 7.885 billion yuan, of which the total amount of lawsuits involving Xiao Wenge reached 5.735 billion yuan.
At the end of last year, Xiao Wenge was listed by the Third People's Court of Beijing as an untrustworthy executee and consumer restricted person, making him an “old scoundrel” in everyone's mouth.
Beautiful general manager stranded overseas
Of course, speaking of Xiao Wenge, I have to mention Wu Bing, another founder of Indic Media. As a former sports star, he founded DMG Entertainment Media Group with Xiao Wenge and Dan Mitz as early as 1993, becoming one of the three founders of Indic Media.
In 2015, Wu Bing received the position of chairman from Xiao Wenge. Later, the company's financial director, director, and several directors resigned one after another. Independent directors Guo Quanzhong and Zhang Ran, and directors Wu Fan and Pu Jiafu submitted resignation applications. Since then, the general manager, financial director, and board secretary have all been Wu Bing.
Since July 2018, the Sichuan Securities Regulatory Bureau has sent several related inquiries to the Indian Discipline Media on many issues, such as the absence of financial director and secretary general of the board of directors of the Indian Discipline Media, the chairman of the board of directors, how to ensure the quality of the company's information disclosure and financial accounting level, and the company's specific plans and schedules to resolve the lack of senior management.
On September 20, the Sichuan Securities Regulatory Bureau once again sent an inquiry letter to the Indian Discipline Media, which once again mentioned that Chairman Wu Bing is also the general manager, financial director, and board secretary. The content of the inquiry stated, “According to the information provided to our bureau, Wu Bing was unable to return home due to a previous illness.” The Indian Discipline Media are required to explain whether Wu Bing has diligently carried out his duties as chairman, general manager, financial director, and board secretary in accordance with relevant laws, company articles of association and internal regulations.
Later, on October 26, in response to an inquiry letter, the Indian press stated that as the company's chairman and general manager, Ms. Wu Bing also went abroad for short-term treatment outside of work because her long-term heavy work had an impact on her health.
Coincidentally, beginning in the second half of last year, a debt crisis broke out in the Indian media. As of April 20, 2019, the principal and interest of the Indian media's outstanding debts exceeded 900 million yuan. The Indian and Discipline media also stated, “The default on debt has had a certain negative impact on corporate financing, commercial credit, etc. The company's overall capital arrangement is very difficult, cash flow is tight, and repayment is difficult.”
After the gamble was completed, there was a sudden change in performance
For the Indo-Indian media, like many backdoor companies, there is also a 3-year gambling period.
According to the acquisition report, Indic Media promised that the net profit attributable to the owners of the parent company from 2014 to 2016 would not be less than 430 million yuan, 558 million yuan, and 719 million yuan, respectively.
After going public behind the scenes, the Indic Media completed their performance promises over a three-year period of gambling. According to Oriental Wealth Choice data, Indic Media received net profit of 436 million yuan, 574 million yuan, and 731 million yuan respectively in 2014-2016. The three-year performance exceeded the performance promise by 1.4%, 2.9%, and 1.7%, respectively. It is no exaggeration to say that the tasks were completed accurately.
By 2018, the style of painting suddenly changed. The net profit loss of Guimu was 1,786 billion yuan, down 332.37% from the previous year; in the first half of this year, the loss continued to be 92 million yuan, down 523.9% from the previous year.
Even, the 2018 financial and accounting report was issued an audit report that could not express an opinion, and the company's stock hit a delisting risk warning situation.
The stock price is also declining steadily. The latest price is 0.71 yuan/share, down 97.4% from the historical high price of 27.81 yuan/share. The company's total market value is only 1.26 billion yuan.
Data source: Oriental Wealth Choice data
Is Anxin Trust's 1.36 billion dollars lost?
It is said that if a fire breaks out at the city gate, fish ponds will be affected. The problems with the Indian press have caused Anxin Trust to suffer unspeakably.
Let's start with an equity transfer in early 2018. In February 2018, Xiao Wenge transferred the 107 million shares held by Inji Media to Anxin Trust (which became the fourth largest shareholder of Indic Media). The unit price for each share was 12.75 yuan, and 1.36 billion yuan was cashed out.
Shortly thereafter, due to changes in performance and other reasons, the stock prices of Indian and Indian media fell rapidly. This may have left Anxin Trust miserable.
According to the data, Anxin Trust experienced asset impairment losses of 2.156 billion yuan in 2018. To this end, the Shanghai Stock Exchange requires Anxin Trust to list the specific asset items for which asset impairment preparations were calculated during the reporting period, and explain the reasons for the calculation of impairment preparations and when signs of impairment appeared; based on the quality of existing financial assets, it is explained whether there is still a risk of impairment.
According to a letter in response to the Shanghai Stock Exchange, Anxin Trust has prepared 1,055 billion yuan in impairment charges for the Indian-Discipline media. In other words, 50% of Anxin Trust's asset impairment losses in 2018 were caused by the Indian media.
What's worse is that since 2019, India Media's stock price has fallen by 75.17% again. The latest price is 0.71 yuan/share, down 94.4% from the transfer price of 12.75 yuan/share at the time.
Where will the 34,500 shareholders go?
It was not only Anxin Trust that was hurt, but also shareholders of India Media. According to Oriental Wealth Choice data, as of June 30, there were still 34,500 Indian Media shareholders, down 5.31% from the end of the first quarter.
The third highest number of companies that left the market during the year
According to Oriental Wealth Choice data, since the establishment of A-shares, a total of 68 companies have been delisted (excluding companies listed through mergers and asset restructuring). Of these, 7 companies have been delisted since this year (counting the*ST India Index), which is the 3rd highest year in A-share history.
Data source: Oriental Wealth Choice data
However, according to the frequency of recent listing terminations, will this year break the record for the highest 11 companies in history?