① The recent transaction of the spouse of the vice chairman of Whirlpool constituted a short-term transaction, and all of the profits of $205 were paid to the company. ② The interviewed lawyer told the reporter that the relevant provisions of the securities law are mainly aimed at preventing insider trading.
Financial Services Association, Feb. 20 (Reporter Ren Chaoyu) The apology notice disclosed by Whirlpool (600983.SH) tonight stated that the company's vice chairman's spouse's recent transaction constituted a short-term deal. All of the proceeds of $205 have been paid to the company. The two interviewed lawyers told the reporter that the relevant provisions of the securities law are mainly aimed at preventing insider trading.
Notably, Whirlpool's stock price reached a phased high in mid-January 2024. The decline continued from late January to February 7. Meanwhile, the performance forecast for January 29 shows that the company's net profit level in 2023 increased significantly year-on-year.
According to the apology announcement, Wang Jiawei, the spouse of Wu Shengbo, the company's vice chairman, traded the company's shares from February 5 to February 19, 2024. According to relevant regulations, it constitutes a short-term transaction. According to the relevant provisions of the Securities Law, all of the proceeds of 205 yuan have been paid to the company.
(Source: Company Announcements)
Yu Nengjun, managing partner at Shanghai Dong Dao Law Firm, told reporters: “This is the right to be included in short-term transactions. All transactions within the statutory period against directors and supervisors with senior insider information holders are deemed to have used insider information, and the proceeds should be attributed to the company. This is to reduce and reduce the motivation for insider trading and the costs of supervision and enforcement. It is also beneficial to crack down on and discourage directors, supervisors, or entities with significant influence from using information advantages to engage in transactions, harming the fairness and impartiality of the securities market. This system was first stipulated in the US securities law, and other countries, including our national securities legislation, have also referred to the rules of this system.”
Attorney Li Jian of Zhejiang Yufeng Law Firm said, “The purpose of this system legislation is to prevent and combat illegal acts of insider trading and ensure the openness, fairness and impartiality of securities transactions. Since shareholders, directors, supervisors, executives, etc. of listed companies holding 5% or more of the shares can easily obtain insider information, if they engage in mutually matching reverse transactions within the legal period, it is likely that they used insider information to conduct transactions. However, it is very difficult to identify and investigate insider trading. Even if they do not actually engage in insider trading, engaging in such acts will cause questions from the securities market and investors, and disrupt the order of transactions in the securities market. Therefore, regardless of whether they use insider information to trade, it is possible to effectively prevent and crack down on 'presumptive' insider trading and maintain normal trading order in the securities market through mandatory legal regulations.”
Whirlpool specifically emphasized in the announcement that Wang Jiawei's short-term transactions were due to insufficient understanding of relevant laws and regulations, and were solely personal investment practices. Mr. Wu Shengbo was not consulted during the transaction, nor was he informed of the above transactions. “There are no subjective or intentional irregularities, no cases where company shares are traded due to insider information, and there is no purpose of using insider information to seek profit.”
Behind the short-term transactions of executive spouses is the sharp fluctuation in Whirlpool's stock price after entering 2024. Market data shows that after late October 2023, Whirlpool's stock price rose from around 7 yuan/share to a high of 9.88 yuan/share on January 12, 2024, the highest price in 52 weeks. It then began a multi-day decline on January 19, and the closing price on February 7 was 6.27 yuan/share. There was an increase in the next three trading days, and today's closing price was 7.23 yuan/share.
According to public information, Whirlpool's products include refrigerators, washing machines, dishwashers, dryers, kitchen appliances, and household appliances. The business covers more than 60 countries and regions around the world.
According to the 2023 annual results advance announcement, net profit attributable to the owner of the parent company is expected to be achieved in 2023 of 62 million yuan to 93 million yuan, an increase of 121.88% to 232.83% over the previous year. The company said that it is mainly due to a certain improvement in the overall gross profit level of the main business companies and the increase in physical profit levels due to cost reduction and efficiency.
According to information, Whirlpool's overseas business accounts for most of its revenue. The share of foreign revenue in 2022 was 78.74%.