Saturday, May 31, 2014

YZJ update 3: Trying to figure out the accusations

Below is what I posted at valuebuddies. The first part was a reply to a fellow forummer.

[quote='yeokiwi' pid='84646' dateline='1401546694']
The three agreements that were signed between 成清波 and 任元林.

http://www.cninfo.com.cn/finalpage/2014-05-27/64069606.PDF

As a listed company, can these kind of agreements be signed without informing the rest of the shareholders?

The main accusation is based on the following paragraph:
[quote]
甲方: 成清波
乙方: 任元林

5.在约定的回购期间和甲方受乙方委托行使标的股票股东权利期间,甲方必
须确保天津国恒始终处于盈利状态(以上市公司披露的报表为准);乙方有权派
员或委托会计师事务所定期和不定期对天津国恒进行财务审计,甲方必须给予积
极配合;对于天津国恒 2013 年度财务决算和财务会计报告书编制必须有乙方人
员参加并会签,同时甲方必须确保天津国恒 2013 年度盈利和在经乙方同意的情
况下,才能提交给上市公司会计师事务所进行年度会计报告审计。否则乙方有权
随时取消甲方对标的股票的回购权,同时有权立即收回委托甲方行使的一切股东
权利。另外,如果标的股票股价连续 3 个交易日下跌,或跌至 1.5 元/股以下,乙
方有权立即取消甲方对标的股票的回购权,同时有权立即收回委托甲方行使的一
切股东权利。
[/quote]
[/quote]

Hi YeoKiwi and CF,

I read through the original agreement: (the 046 report)
http://www.cninfo.com.cn/finalpage/2014-05-27/64069606.PDF,

the terms of conditions include (pg 6)
3.甲、乙双方一致同意遵守保密义务,不将本协议内容透露和泄露给第三方,
否则违约方将赔偿因此给对方造成的损失。

There is condition of secrecy. Hmm... Isn't 成清波 shooting himself?
Next:
2.在约定的回购期间内和甲方拥有回购权的情况下,甲方应当认真履行基于
《授权委托书》的股东权利,切实维护天津国恒权益,如果甲方不认真履行基于
《授权委托书》的股东权利,[u][b]有可能致使天津国恒股票停牌或摘牌[/b][/u],或连续股价
下跌和发生其他损害天津国恒权益行为,造成天津国恒和乙方经济损失,则甲方
应当承担赔偿责任。[u][b]同时乙方有权立即取消甲方对标的股票的回购权,同时有权立即收回委托甲方行使的一切股东权利[/b][/u]。

If that is the case, the third accusation (三)涉嫌侵犯上市公司独立运作
Doesn't hold, isn't it?
http://www.cninfo.com.cn/finalpage/2014-04-29/63943086.PDF
They are making a loss

http://www.cninfo.com.cn/finalpage/2014-04-30/63952066.PDF
Company suspended on 5 May

Also, since the shares are transferred to TaiXingLiyuan, TXLY is effectively the biggest shareholder with management rights, but because 成清波 has the rights to repurchase the shares, TXLY thereby gave management rights to 成清波 and co, subjected to various conditions, apparently, the profitability and no suspension conditions are not meet.

The crux of the argument is insider trading, the buying of shares after the agreement is sealed. I read the document a few times, I couldn't find a clause that stated YZJ cannot buy more of Tianjin GuoHeng Railway.

Also, the harsh conditions of profitability, no lower than $1.5 etc, are merely conditions, does it constitute as insider info? There is no guarantee of profits.

(四)涉嫌违规获得上市公司股权
在股权回购协议之补充协议中规定:“相关方配合深圳市中级人民法院通
过强制执行,[u][b]最终以大宗交易方式将标的股票过户至丙方名下[/b][/u]”。公司认为,
国联信托作为新扬子公司的高息放贷渠道,是泰兴力元的关联方。泰兴力元在
债务人配合下,通过大宗交易而非公开拍卖的方式获得质押给关联方的股权,
侵犯了公司其他股东的优先受偿权,侵犯了其他债权人的溢价拍卖获益权,剥
夺了上市公司通过其他方进行重组的可能。

Accusation 4 (Above)is even more bewildering.
3.《股票回购协议》签订后,协议当事人最终确定通过深圳市中级人民法院
将标的股票以大宗交易方式过户至泰兴市力元投资有限公司。 (pg8)

I assume 大宗交易 means married deal, that was agreed during the supplement contract, when TXLY come into the picture.
------------------------

I am not a lawyer, but if I can find so many question marks, it does not seem like Ren will just lose the legal battle when it starts.

6 comments:

  1. sillyinvestor,

    You shout wave!

    Now readers have to find the wind themselves ;)

    ReplyDelete
  2. SMOL,

    I again catch no balls... Can only guess what u mean

    ReplyDelete
  3. YZJ just posted their response to SGX

    ReplyDelete
  4. Yup I saw. Pretty much business as usual as I expect.

    I think this episode really enlighten me how YZJ HTM works.

    ReplyDelete
  5. Would you jump right back to buy yzj ? 😁😁😁
    I still could not understand his the htm works, care to blog it ?

    ReplyDelete
  6. I don't think I will buy back if prices remain at current level. I want more MOS. I think YZJ will emerge from this with zero or minimal damages, but it highlighted the risk of HTM.

    Sure, I will blog about it tonight

    ReplyDelete