On the evening of November 11, ST Busen announced that it had received the “Notice of Filing a Case from the China Securities Regulatory Commission”. The China Securities Regulatory Commission decided to investigate the company because the company was suspected of failing to disclose major events as required.
At the close of trading on November 11, ST Busen’s market value was only 1.01 billion yuan. As of October 31, the company had 4,538 shareholders.
Picture source: Wind
The problem of letter disclosure is “repeated violations”
ST Busen said that during the investigation period, the company will actively cooperate with the China Securities Regulatory Commission’s investigation and fulfill its information disclosure obligations in strict accordance with regulatory requirements.
But in fact, ST Busen letter disclosure problem is not uncommon.
Picture source: Wind
On October 17, , Shenzhen Stock Exchange issued a decision to notify and criticize ST Busen and related parties. , it was found that on September 10, 2019, ST Busen signed an “Equity Transfer Agreement” with related party Yilian Huihua, and planned to acquire 60.4% of Guangdong Xinhui’s equity held by Yilian Huihua for 138.316 million yuan.
However, this equity acquisition plan has caused frequent problems. It was found that on September 12, 2019, ST Busen disclosed the “Announcement on Foreign Investment and Related Transactions”, and in the main content of the transaction agreement only disclosed “If the People’s Bank of China approves and vetoes this If there is an equity transfer, the “Equity Transfer Agreement” will automatically terminate”, and the relevant specific provisions of the agreement were not fully disclosed.
At the end of October 2019, Wang Chunjiang, the company’s then chairman and legal representative, learned that the company was not qualified to become a major investor in the payment institution Guangdong Xinhui because it did not meet the relevant regulations on payment service management, but failed to disclose the above in a timely manner information.
As of December 31, 2019, the company paid RMB 63 million for the equity transfer to Yilian Huihua. In September 2020 and after the expiration of the one-year period, the company and Yilian Huihua did not reach an extension agreement in writing, but the parties to the transaction continued to advance the equity transfer matter with practical actions, and the “Equity Transfer Agreement” was substantially extended.
The Shenzhen Stock Exchange stated that ST Busen failed to fully disclose the important terms of the “Equity Transfer Agreement” and failed to promptly disclose important developments such as not meeting the conditions of the major investor and the substantive extension of the agreement, which constituted information. Disclosure of Violations.
Therefore, the Shenzhen Stock Exchange issued a notice of criticism toST Busen; Zhao Chunxia, then chairman and acting board secretary of the company, Wang Chunjiang, then chairman, and vice chairman , General Manager Du Xin, and then Secretary of the Board of Directors Zhang You issued a notice of criticism.
In addition, on October 12 this year, ST Busen received the Zhejiang Securities Regulatory Bureau’s “Decision on Taking Measures to Issue Warning Letters to Zhejiang Busen Clothing Co., Ltd. and relevant responsible personnel.”
The Zhejiang Securities Regulatory Bureau stated that after investigation, it was found that Beijing Oriental Hengzheng Technology and Trade Co., Ltd., as the controlling shareholder ofST Busen, holds 15.55% of the company’s total share capital. The above-mentioned shares were waiting to be frozen by the Tianjin Second Intermediate People’s Court from June 24, 2022 to June 28, 2022.
Busen Shares failed to perform its information disclosure obligations in a timely manner after becoming aware of the above matters, and did not disclose it until August 27, 2022.
The above behavior violates Articles 3, 4, 22 and 24 of the “Regulations on the Administration of Information Disclosure of Listed Companies” (CSRC Order No. 182) provisions. According to relevant regulations, the Zhejiang Securities Regulatory Bureau decided to take supervisory and administrative measures by issuing warning letters to ST Busen, Wang Yazhu, and Kan Dong respectively, and recorded them in the securities and futures market integrity files.
On the evening of October 12, ST Busen also released a rectification report simultaneously. The company’s rectification report stated that it will take this rectification as an opportunity to learn lessons deeply and conscientiously implement various rectification measures.
In fact, the company has received 6 regulatory letters this year, Multiple rectification reports have been issued.
Both revenue and net profit dropped
ST Busen said that the company uses “Busen Men’s Wear” as its main brand. While doing its best to do its core business, in order to improve its operating capabilities and add new profit growth points, the company will add a new information service segment in 2020. , mainly provides merchant expansion agency services for institutions with payment transaction licenses.
In the first three quarters, the company achieved operating income of 117 million yuan, a year-on-year decrease of 43.82%; net profit attributable to the parent company was -70.073 million yuan, a year-on-year decrease of 261.96%.
On September 28, ST Busen announced that the company’s board of directors reviewed and approved the “Proposal on Terminating the Implementation of the 2020 Restricted Stock Incentive Plan and Buying Back and Cancellation of Restricted Stocks” and agreed to terminate the implementation of the 2020 Restricted Stock Incentive Plan. and repurchase and cancel corresponding restricted stocks.
On September 5, ST Busen announced that the company’s non-public stock issuance plan has expired. The company stated that since the shareholders’ meeting reviewed and approved the non-public stock issuance plan, the company has been actively promoting matters related to the non-public stock issuance. However, due to factors such as changes in the capital market environment and financing timing, no substantial progress has been made so far.