① *ST Meishang, which has fraudulent issuance, financial fraud, illegal letters, and misdeeds, was investigated by the Securities Regulatory Commission; ② it did not respond to a letter of concern and was once called for “forced delisting” by the Shenzhen Stock Exchange. ③ Strict control has become a major regulatory trend.
Finance Association, April 21 (Reporter Yan Jun) Once the police shouted “If you do not respond within three days, you will be forcibly delisted”. On the evening of April 21, *ST Meishang announced that the company was investigated by the Securities Regulatory Commission for suspected illegal disclosure of information.
This time, after the company was administratively punished for financial fraud in June 2020 and before, the Securities Regulatory Commission opened another investigation against the company.
Fraudulent issuance, financial fraud, stock price manipulation... *ST Meishang frantically tested the bottom line of laws and regulations and became the company that received the most letters of concern from the Shenzhen Stock Exchange.
*ST Meishang was listed on December 22, 2015. It is a bullish stock that has created 14 trading platforms and opened at a maximum of 153 yuan. More than 8 years have passed, and the current stock price is only 0.41 yuan left. As of April 19, *ST Meishang's “Suggestive Notice Concerning the Risk of the Company's Stock Listing Being Terminated Due to a Stock Price Below Face Value” shows that by the close of the day, the closing price of the company's stock had been below 1 yuan for 10 consecutive trading days and was on the verge of delisting.
There are many forms of financial fraud, and they have been called by the regulatory authorities to “delist if you don't respond”
On April 21, *ST Meishang announced that the company was investigated by the Securities Regulatory Commission due to suspected illegal disclosure of information. At the same time, *ST Meishang also received a decision on administrative supervision measures from the Shenzhen Securities Regulatory Bureau, detailing the company's two major problems: irregular financial accounting and failure to fulfill its obligation to disclose information in accordance with regulations.
*ST Meishang's irregularities in financial accounting are astonishing, including many issues such as the actual control company not being included in the scope of consolidation and disclosure of financial statements, correcting accounting errors up to 6 times, not considering the impact of impairment, and careless and untimely calculation of impairment.
In terms of information disclosure, it involves a number of important matters, such as failure to promptly disclose major litigation matters, failure to promptly disclose administrative penalty information on controlling shareholders, and failure to disclose related transactions in accordance with regulations.
*ST Meishang's main business is ecological restoration, ecological cultural tourism, etc. Since 2022, the company has been exposed to many problems such as financial fraud, fraudulent issuance, the actual controller Wang Yingyan's encroachment on huge sums of money from listed companies and even fraud in listed prospectus. As a result, the company has also become a regular customer of “letters of concern” issued by regulation. Since this year, *ST Meishang has also become the company that has sent the most letters of concern from the Shenzhen Stock Exchange.
On April 15, the Shenzhen Stock Exchange issued an ultimatum to *ST Meishang due to failure to respond to the letter and other materials. If *ST Meishang has not responded in a timely manner, *ST Meishang will be dealt with in accordance with the relevant provisions of Chapter 10 (4) of the “GEM Stock Listing Rules (revised in August 2023)”.
The “GEM Stock Listing Rules” stipulate: “If the closing price of GEM company shares falls below 1 yuan per day for 20 consecutive trading days, the listing of their shares will be terminated.”
According to previous media reports, *ST Meishang inflated profits in a variety of ways, including not limited to recovering uncollected accounts receivable in advance by false bookkeeping, preparing false original documents to accrue interest into accounts, falsifying bank interest income, not adjusting project revenue according to approved amounts, and inflating subsidiary revenue.
But after repeated fraud, what is the real financial situation of the company? On April 19, *ST Meishang's announcement disclosing new litigation matters and the cumulative progress of litigation matters showed that the company's case as the defendant involved a total amount of 2,654 billion yuan, accounting for 383.96% of the company's 2022 audited net assets.
It is worth noting that *ST Meishang's actual controller, Wang Yingyan, also treated supervision as incorporeal, and continued to violate regulations. As a result of manipulating the securities market, 113 securities accounts traded Meishang Ecology ended up losing 238 million yuan. The Securities Regulatory Commission imposed an administrative penalty of 5 million yuan, and was banned from entering the market for life.
The trend of strict supervision and control continues
Under the main line of strong supervision, risk prevention, and promotion of high-quality development, strict supervision and control have become a major trend in supervision. In the new “Nine National Rules” that have just been released, the word “strict” appears 20 times and “supervision” appears 33 times; of the nine regulations, there are 7 articles involving “strict supervision and control”, including supervision of listed companies and institutional supervision.
Judging from current regulatory attitudes and trends, both listed companies and intermediaries have ushered in more comprehensive and strict supervision, resolutely making supervision “prickly” and angular.
The supervision of listed companies has carried out a full chain and resolutely said no to acts such as financial fraud. The supervision has emphasized many times that it will strictly implement the delisting system, form a new “should retreat” ecosystem, severely crack down on illegal acts such as financial fraud and market manipulation to maliciously avoid delisting, carry out a full chain and penetrating crackdown on related crimes such as “hollowing out” listed companies and illegal allocation of funds, and implementing major illegal forced delistings.
Following the investigation by the Securities Regulatory Commission against *ST Meishang, industry insiders told the Financial Federation that the company has a huge risk of delisting, and that investors may be able to file claims against the company due to financial fraud, illegal credit disclosure, etc.