①Ningbo Shanshan stated that this matter will not have any impact on the company's daily production and operation management; ②From 2018 to 2022, the disclosure and information rating of Ningbo Shanshan was respectively C, C, C, B, B.
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On June 27th, Cailian Press (Reporter Wang Bin) reported that Ningbo Regulatory Bureau of China Securities Regulatory Commission issued a warning letter to Shanshan Stock Co., Ltd. (600884.SH) and related company personnel due to the misuse of funds by controlling shareholders and failure to fulfill the deliberation procedure for some related transactions and failure to timely disclose the information to the public.
Shanshan Stock announced tonight that the company has recently received the "Administrative Supervision Measures Decision" issued by the Ningbo Securities Regulatory Bureau. From January 2022 to April 2024, the controlling shareholder Shanshan Holdings Co., Ltd. ("Shanshan Holdings") has accumulated a use of company funds of RMB 1.788 billion through procurement advances, project advances, etc., of which, the annual amount of funds used for 2022 is RMB 830 million, the annual amount of funds used for 2023 is RMB 808 million, and the amount of funds used from January to April 2024 is RMB 150 million.
According to the announcement, Shanshan Holdings has fully repaid the above-mentioned interest on the use of funds in 2022, the amounts used in 2023 and 2024 and their interest, by the annual report of Shanshan Stock Co., Ltd. in 2023. However, Shanshan Stock Co., Ltd. failed to disclose the non-operational use of funds by the controlling shareholder from January 2022 to June 2023 in the 2022 interim report, 2022 annual report, 2023 interim report, and other regular reports, resulting in the omission of relevant information disclosure in the above-mentioned regular reports.
Wu Sihua, a lawyer at Zhejiang Jun An Century Law Firm, told Cailian Press that if a controlling shareholder misappropriates a large amount of funds from a listed company in violation of regulations by fictionalizing business or exploiting loopholes in the internal governance mechanism of the listed company, the relevant responsible personnel may be subject to corresponding administrative penalties, and serious violations may constitute a crime. The company may also be held liable for civil compensation.
In addition, Shanshan Stock Co., Ltd. also failed to fulfill the deliberation procedure for some related transactions and failed to disclose them in a timely manner. According to the "Administrative Supervision Measures Decision", on January 3rd and April 3rd, 2023, Shanshan Stock Co., Ltd. paid a total of 450 million yuan and 70 million yuan to the related party Ningbo Huafan Network Technology Co., Ltd. as purchase prepayments and real estate taxes, respectively, which constituted related transactions, but Shanshan Stock Co., Ltd. did not convene a board of directors for deliberation or disclose them to the public in a timely manner.
In addition, on January 25th, 2024, the company paid 600 million yuan to the related party Shanghai Junsheng Tongda Real Estate Co., Ltd. as a purchase prepayment, which constituted a related transaction, but the company did not convene a board of directors for deliberation or disclose it to the public in a timely manner.
Ningbo Securities Regulatory Bureau stated that Shanshan Stock Co., Ltd.'s above behavior violated the relevant provisions of the "Management Measures for the Disclosure of Listed Company Information", and the chairman of the board of directors of the company, relevant responsible directors and deputy general managers, CFO, and board secretary failed to fulfill their duties diligently and are responsible for the company's above violations.
In response to the above violations, Ningbo Securities Regulatory Bureau decided to take administrative supervision measures by issuing a warning letter to Shanshan Stock Co., Ltd. and its chairman of the board of directors Zheng Ju, director and deputy general manager Li Fengfeng, CFO Li Keqin, and board secretary Chen Ying, and include them in the integrity files of the securities and futures market.
Shanshan Stock Co., Ltd. stated that the company and relevant personnel have attached great importance to the "Administrative Supervision Measures Decision" after receiving it, and will submit a written report to the Ningbo Securities Regulatory Bureau as soon as possible in accordance with regulations. The company also stated that this matter will not affect its daily production and operation management.
According to the information disclosure performance evaluation results of listed companies released by the Shanghai Stock Exchange, from 2018 to 2022, the information disclosure rating of Shanshan Stock Co., Ltd. was C, C, C, B, and B, respectively. According to the evaluation guidelines issued by the exchange, the information disclosure rating of listed companies is divided into four levels from high to low: A, B, C, and D, which means excellent, good, qualified, and unqualified, respectively.
In terms of performance, in Q1 of this year, Shanshan Stock Co., Ltd. achieved a revenue of 3.752 billion yuan, a year-on-year decrease of 15.67%; a net profit attributable to the parent company of -73.2818 million yuan, a year-on-year change from profit to loss, and a net profit of RMB 572.6 million in the same period of the previous year.