Deep Exempted Huaxing Optoelectronics' 51 Billion Treasury Li Dongsheng Suspected Insider Trading
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On June 18, TCL Group issued a suspension on the trading day after the suspension of trading.
TCL Group said that the company's partner, Shenchao, mainly represents the Shenzhen Municipal Government as a carrier for supporting the development of integrated circuits and new flat panel display devices. As of June 14 this year, Huaxing Optoelectronics has received an entrusted loan of 5.1 billion yuan from Shenchao Company for the 8.5th generation TFT-LCD project construction of Huaxing Optoelectronics. According to the evaluation report, Huaxing Optoelectronics has reached the capacity conditions required by the project preferential policies. Shenchao Company agreed to waive the debt of Huaxing Optoelectronics' 8.5th generation TFT-LCD project of 5.1 billion yuan, and will cooperate with Huaxing Optoelectronics to handle the relevant procedures such as mortgage cancellation.
TCL Group expects that this will increase Huaxing Optoelectronics' revenue in 2013 by approximately RMB 380 million (calculated from June 14, 2013).
However, on June 6th before the release of the company's major positive news, TCL Group also announced that Li Dongsheng increased its shareholding of 1.165 million shares through the Shenzhen Stock Exchange's securities trading system on June 5, 2013, accounting for the company's total share capital. 0.01%.
Judging from the time interval between the two announcements of the company, the loan exemption announcement from the TCL Group's announcement of the increase in holdings to the 18th was released, only three valid trading days.
Lawyer said Li Dongsheng was suspected of insider trading
In this regard, Liu Benhua, the director of Guangdong Benben Law Firm, told this reporter that “the chairman of the company, as an insider insider, has increased its shareholding in the sensitive period of the window, which is suspected of insider trading.â€
Lawyer Liu Guohua said that according to Article 7 of the Guidelines for the Shareholders of Listed Companies of the Shenzhen Stock Exchange (Amendment), the shareholders of the listed company and their concerted actions must not increase their shares in the company during the following periods: “One is the company’s performance report or periodic report. Within 10 days before the announcement, if the performance report is not released and the date of the announcement of the periodic report is postponed for special reasons, it shall be counted from the 10th day before the original appointment announcement date; the second is within 2 trading days after the announcement of the major transaction or major event to the announcement of the event; It is from the date of other major events that may affect the stock price to 2 trading days after the announcement."
According to the actual situation of the TCL Group, Liu Guohua believes that Li Dongsheng’s increase in holdings violates the requirements of the second paragraph above. "As far as the actual situation of Huaxing Optoelectronics is concerned, the entrusted loan exemption cannot be completed within one or two days. The company should have started planning very early. Therefore, the increase in holdings during this period is an increase in the sensitive period of the window. Li Dongsheng, as the chairman of the company, cannot be ignorant of this matter."
In fact, our reporter further investigated and found that the issue of Huaxing Optoelectronics' application for loan exemption was inadvertently leaked as early as February 27 this year when TCL Group disclosed its 2012 annual report.
In the note on page 118 of the company's annual report, TCL Group mentioned that Shenchao Technology invested a total of 5.41 billion yuan in project construction funds for Huaxing Optoelectronics in the form of entrusted loans. TCL Group clearly stated that the loan interest rate is zero interest rate, and The assets formed by the funds were 5.521 billion yuan to provide mortgage for the entrusted loan. After the mass production of Huaxing Optoelectronics Phase II, after the project reached the mass production target of 90,000 sheets for three consecutive months, the professional production capacity was evaluated by the professional organizations recognized by both parties. Shenchao Company reported in writing to the Shenzhen Municipal People's Government. After approval, the asset mortgage procedure will be lifted and all debts formed by the entrusted loans not exceeding 5.41 billion yuan will be exempted.
It can be seen that although TCL Group did not issue a formal announcement before, the application for the entrusted loan exemption by Huaxing Optoelectronics was already in full swing, but it was not possible to estimate the financial impact on the company.
Not only that, this year, in addition to the sudden increase in holdings before the major favorable announcement, Li Dongsheng also increased the company's shares through the Shenzhen Stock Exchange Securities Trading System on January 15, May 10, and May 13 this year 1414.39 Ten thousand shares. Since January 1, 2013, Li Dongsheng has accumulatively increased the company's stock by 153.089 million shares, accounting for 0.18% of the total share capital.
Internal control problems have been rectified
For TCL Group, in addition to Li Dongsheng's increase in the company's shares during the sensitive period of the window, the company has just been exposed to many problems in corporate governance and internal control and was asked to rectify.
From March 11 to March 22, 2013, the Guangdong Securities Regulatory Bureau conducted on-site inspection and guidance on the company's corporate governance, financial accounting, and information disclosure since 2011. On May 16, TCL Group issued a rectification report on the on-site inspection of the Guangdong Securities Regulatory Bureau.
It is worth mentioning that one of the rectification requirements put forward by the Guangdong Securities Regulatory Bureau mentioned that there are problems in the company's information disclosure, and that the company did not register the inside information insiders in time.
In addition, in the huge investment of Huaxing Optoelectronics in May 2011, Li Dongsheng had the final say. According to the company, as the chairman and CEO of the company, Li Dongsheng, was the director of Huaxing Optoelectronics, the investment of Huaxing Optoelectronics has been approved by the board of directors of Huaxing Optoelectronics. Therefore, the company has not fulfilled the approval procedures of the strategic and investment departments and financial departments of TCL Group. And Li Dongsheng approved the project of Huaxing Optoelectronics to invest 690 million yuan to build the 4.5-generation LCD experimental line.
However, if it is in accordance with the company's relevant system regulations, it should be reviewed by the strategy and investment department of the Huaxing Photovoltaic Company and the financial department, and then reported to the company's CEO for approval.
In addition, Huaxing Optoelectronics also experienced human error in the accounting of income tax expenses. During the on-site inspection, Guangdong Securities Regulatory Bureau found that Huaxing Optoelectronics did not consider the difference between the amortization period of the company's intangible assets and the tax law when calculating the 2012 income tax expenses, and the company's government subsidies related to assets should be adjusted for taxation, etc., causing Huaxing Optoelectronics 2012. Annual income tax expenses are reduced. Not only that, but also the problems in the company's financial accounting, including the accrued advertising fees included in the current operating expenses, early recognition of sales revenue and the failure to confirm the cost in a timely manner.
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