**: Company E.
Nearly 2 years after the case was filed for suspected violations of laws and regulations in information disclosure, the ST start-up (603557) penalty has finally landed.
On December 1, ST announced that the company and relevant responsible persons received the "Administrative Penalty Decision" (hereinafter referred to as the "Decision") and the "Market Ban Decision" issued by the China Securities Regulatory Commission. Due to financial fraud, Zhou Jianyong, the general manager at the beginning of ST, and Zhang Limin, the chairman at the time, were banned from the market for 10 years and 5 years respectively.
10-year market ban.
On January 17, 2022, ST Qiqi received the "Notice of Case Filing" from the China Securities Regulatory Commission, and the CSRC decided to file a case against the company due to the company's suspected illegal information disclosure.
On May 10 this year, the company received the "Prior Notice of Administrative Punishment and Market Prohibition" issued by the China Securities Regulatory Commission. On December 1, the final punishment was settled.
According to the decision, there were false records and major omissions in the 2018, 2019 annual reports and 2020 semi-annual reports of ST Start, and at the same time, ST started to fabricate material false content in the public offering documents.
For the above illegal acts, the China Securities Regulatory Commission decided to order the start-up shares to be corrected, give a warning, and impose a fine of 57 million yuan. Zhou Jianyong, then director and general manager of ST Start-up, was given a warning and fined 10 million yuanZhang Limin, the chairman of the board of directors at the time, was given a warning and fined 5 million yuanChen Zhangwang, the then chief financial officer, was given a warning and fined 3 million yuanWu Jianjun, then secretary of the board of directors, was given a warning and fined 2 million yuan.
In addition, according to the "Market Ban Decision", Zhou Jianyong, as the general manager at the beginning of ST, organized and instructed relevant personnel to engage in the above-mentioned illegal acts, and the circumstances of the violation were more serious, and the CSRC decided to impose a 10-year market ban on Zhou Jianyong.
Zhang Limin, as the then chairman and actual controller of the start-up shares, signed and confirmed in the above-mentioned annual report and issuance documents that he should be primarily responsible for the truthfulness, accuracy and completeness of the information disclosure, and the circumstances of the illegal acts were seriousChen Zhangwang directly participated in the above-mentioned illegal acts, and the circumstances of the illegal acts were serious, and the China Securities Regulatory Commission decided to impose a 5-year market ban on Zhang Limin and Chen Zhangwang respectively.
According to the previous announcement of ST start, Chen Zhangwang resigned as chief financial officer in February 2021;Wu Jianjun resigned as secretary of the board in April 2021. Since January 2021, Zhou Jianyong and Zhang Limin have ceased to serve as general manager and chairman of the board of directors respectively since February 2022.
Inflated revenues and profits.
Since its establishment in 2009, ST has been focusing on children's shoes, children's clothing and children's clothing accessories and other related businesses, and its products are mainly for children aged 3 to 13 years.
After investigation, the basic data of financial accounting of ST's initial income and cost were taken from the Daoxun system, and the start-up shares inflated the operating income, operating costs and total profits through the Daoxun system in the form of fictitious procurement and sales business.
In the 2018 annual report, ST started with an inflated income of 69.48 million yuan, accounting for 497%；The inflated profit was 23.15 million yuan, accounting for 10% of the total profit of the year39%。In the 2019 annual report, ST started to inflate its revenue by 18.2 billion yuan, accounting for 1194%；The total inflated profit was 65.91 million yuan, accounting for 37% of the total profit of the year42%。
In the 2020 semi-annual report, ST started to inflate its revenue by 10.9 billion yuan, accounting for 19 percent of the current revenue54%；The inflated profit was 40.37 million yuan, accounting for 50% of the current profit3%。
In the above-mentioned semi-annual report from 2018 to 2020, the total inflated income of ST started by more than 3600 million yuan, inflated profit of about 1300 million yuan.
In addition, on December 13, 2016, Zhang Limin and Liang Moujin, Wu Mouya, Wang Mouzhu and Zhuang Mouqing respectively signed the "Equity Holding Agreement", stipulating that Zhang Limin transferred a total of 20 million shares of ST indirectly held by him to the above four people at a price of 5 yuan per share, but the transfer was not handled for the time being, and Zhang Limin held it on his behalf. The nominee shareholding occurred in 2016 and ended in 2019, and was not disclosed in the financial reports related to ST's start-up.
In 2020, ST completed a convertible bond issuance, raising a total of 5200 million yuan of convertible bonds. After investigation, ST's initial public offering documents also fabricated material false content.
In the prospectus, ST started to increase its revenue by 69.48 million yuan and 50.6 million yuan in 2018 and the first half of 2019, and inflated its total profit by 23.15 million yuan and 18.79 million yuan through fictitious procurement and sales business, and there were major falsehoods in the relevant content.
At that time, the defense of the general finance department was "nominal".
A number of parties and their ** people in the incident put forward defense opinions.
ST Start-up Company believes that the existing administrative penalty evidence can neither prove the existence of fictitious business in 2018 and 2019, nor can it accurately reflect the specific amount of fictitious business of Start-up Shares. Moreover, Zhang Limin, the original actual controller of ST, and Liang Moujin and other entities are actually in a loan relationship, rather than equity holding.
Zhou Jianyong argued that he was completely unaware of the company's inflated revenue, operating costs, and total profits in 2018 and 2019. In this case, the fine of 10 million yuan and the 10-year market ban are obviously too heavy and should be mitigated.
As the chairman at the time, Zhang Limin also pleaded that he was completely unaware of the inflated revenue, costs and profits in 2018, 2019 and 2020.
As the chief financial officer at the time, Chen Zhangwang said that although he was the chief financial officer disclosed to the public by ST Startup, he was not actually the person directly responsible for the financial aspects of the start-up shares, but was the nominal chief financial officer (tool person role). The substantive management and decision-making power in the financial aspects of the start-up shares does not lie with Chen Zhangwang, but with Zou Moujun.
Wu Jianjun, the secretary of the board of directors at the time, argued that there was no subjective intention in this violation of laws and regulations, and he had been diligent and conscientious within his ability. Considering that Wu Jianjun's annual salary in the starting shares from 2018 to 2020 is only more than 300,000 yuan, I sincerely request that the penalty amount be reduced as appropriate. After review, the SFC did not adopt the above defense opinions.
ST Qiqi said that according to the "Decision Letter" received by the company, the investigation of the illegal acts involving this information disclosure has been investigated and concluded. As of the disclosure date of this announcement, the company and its current directors, supervisors and senior management personnel are not involved in the investigation. At present, the company's business situation is normal.
ST said that it will correct the error as soon as possible and actively rectify it. The Company will learn from lessons and lessons, improve the standard operation and information disclosure level of relevant personnel, strengthen the standardization of internal governance, and strictly abide by relevant laws and regulations, and strive to improve the level of corporate governance.
On December 1, ST's starting share price closed at 227 yuan, market value 112.2 billion yuan.
Editor-in-charge: Liu Junyu.
Proofreading: Liao Shengchao.
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