① Involving insider trading*ST Jiangte shares, Ganfeng Lithium announced tonight that the company and the chairman were fined more than 5 million yuan; ② Ganfeng Lithium announced that it had received advance notice of the administrative penalty in this case as early as December 2022, but it took a year and a half for the formal penalty to finally come to an end.
Financial Services Association, July 6 (Reporter Liu Yue) 19 months after the regulatory fines were announced, the penalties in the Ganfeng Lithium (002460.SZ) insider trading case finally came to an end. The company and Chairman Li Liangbin and others received administrative penalty decisions.
Ganfeng Lithium announced this evening that the company received an “Administrative Penalty Decision” issued by the Jiangxi Regulatory Bureau of the China Securities Regulatory Commission. The company is suspected of insider trading “*ST Jiangte” shares. The Jiangxi Regulatory Bureau of the China Securities Regulatory Commission decided to seize 1.1053 million yuan of the company's illegal proceeds and imposed a fine of 3.3159 million yuan; issued a warning to Chairman Li Liangbin and fined 0.6 million yuan; issued a warning to then-board secretary Ouyang Ming and fined 0.2 million yuan.
As early as December 7, 2022, Ganfeng Lithium announced that the company and related parties had received an advance notice of administrative penalties from the Jiangxi Securities Regulatory Bureau for suspected insider trading of Jiangxi Special Electric Co., Ltd. (*ST Jiangte) shares. Compared to tonight's announcement, there has been no change in the details of the administrative penalty.
Simple backtracking. In July 2022, Ganfeng Lithium's suspected insider trading case was investigated by the Securities Regulatory Commission, causing an uproar in the market. According to reports, the main reason the company was sued by the Securities Regulatory Commission is that the company purchased shares of Jiangte Electric during merger and acquisition negotiations with Jiangte Electric.
According to the announcement, since June 2020, Ganfeng Lithium has been in touch with Jiangte Electric under the impetus of the Yuanzhou District Government. On August 12, 2020, Jiangte Electric and Ganfeng Lithium signed a “Memorandum of Cooperation”, agreeing that Ganfeng Lithium will exclusively subscribe for all non-public shares of Jiangte Electric (the number of shares issued shall not exceed 30% of Jiangte Electric's total share capital) to become the controlling shareholder of Jiangte Electric, and Li Liangbin became the actual controller of Jiangte Electric.
However, the merger and acquisition of Ganfeng Lithium and Jiangte Electric did not go well. On August 20, 2020, Jiangte Electric disclosed an announcement that plans for the non-public offering of shares were terminated due to the failure of the two parties to agree on key provisions such as solutions to avoid competition in the industry.
The non-public offering of shares planned by Jiangte Electric may result in changes in the controlling shareholder and actual controller of the company. Prior to disclosure in accordance with the law, it was insider information as stipulated in the Securities Law. The sensitive period is from June 9, 2020 to August 13, 2020. Li Liangbin, Ouyang Ming, and Yang Mouying of Ganfeng Lithium, relevant directors and executives of Jiangte Electric, and relevant staff from the Yichun City and Yuanzhou district governments are insiders. Among them, Li Liangbin and Ouyang Ming learned that the time was no later than June 18, 2020.
According to the announcement, due to Li Liangbin's decision and arrangement, Ouyang Ming is specifically responsible for the specific operation of the securities department staff, and the “Ganfeng Lithium” securities account traded “*ST Jiangte” stocks during the insider information sensitive period. On June 22, 2020, Ganfeng Lithium transferred 30 million yuan to the “Ganfeng Lithium” securities account. From June 23 to July 2, 2020, the “Ganfeng Lithium” securities account purchased 15.6777 million shares of “*ST Jiangte” shares, with a purchase amount of 26.4838 million yuan; from July 8 to 9, 2020, all were sold, with a sale amount of 27.6329 million yuan, making a profit of 1.1053 million yuan. The funds from the sale of shares were deposited in the “Ganfeng Lithium” securities account.
Looking back at Jiangte Electric's stock price performance, the stock price increased by about 12.35% from June 23 to July 9, 2020 (based on the closing price of the day), but the stock price was still at the bottom during this period, dwarfing the “epic” market in the later stages.
(Image credit: Choice)