Gree real estate (600185. SH) opened the word limit, triggered the company’s share price plummeted last night is its announcement.
According to the disclosure of Gree real estate on the evening of December 30, Lu Junsi, chairman of the company, received the “Notice of investigation” from the CSRC. Because he was suspected of insider trading in the securities market, according to the relevant provisions of the securities law of the people’s Republic of China, the CSRC decided to put him on file for investigation.
The company immediately added that the issue of shares to acquire 100% of the shares of Zhuhai duty-free group of major asset restructuring, there may be the risk of suspension or termination.
For Lu Jun four involved in insider trading was put on file for investigation, a person close to Gree real estate disclosed to the financial Associated Press, “it should be tax-free injection, affected by this, many people have been questioned.”
In this regard, the reporter asked Gree real estate investor relations department, the relevant person in charge said that it is not convenient to respond at present.
Key insider trading
Gree real estate said in the announcement that during the investigation period, Lu Junsi can perform his duties normally and the board of directors of the company can also operate normally. This matter will not affect the company’s daily production and operation activities, and the company’s operation, management, business and financial status are normal. Nevertheless, the company has been challenged.
In the view of the above-mentioned people close to Gree real estate, the incident of Lu Junsi being put on file for investigation is more serious, but ultimately it depends on the degree of Lu Junsi’s participation.
According to Article 43 of the measures for the administration of material assets reorganization of listed companies, those suspected of insider trading are generally put on file for inspection and given administrative punishment after verification. If a person is suspected of committing a crime, he shall be transferred to a judicial organ for investigation of criminal responsibility in accordance with the law. In addition, the administrative license of refinancing, merger and reorganization may be suspended for the listed companies that have been put on file for inspection. Moreover, intermediary agencies and related personnel who are directly responsible may be suspended or disqualified.
On May 22 this year, Gree real estate announced a major asset restructuring plan, which plans to issue shares to the state owned assets supervision and Administration Commission of Zhuhai City and urban construction group, and pay cash to purchase 100% equity of Zhuhai duty-free group.
Subsequently, the share price of Gree real estate changed dramatically. After the resumption of trading on May 25, it rose for eight consecutive trading days, becoming the bull stock at that time.
However, Gree real estate received a letter of inquiry from the Shanghai Stock Exchange on June 3. In the inquiry letter, the Shanghai stock exchange required Gree real estate to give full risk warning in combination with the company’s production and operation, shareholder reduction and recent major asset restructuring, and to self check whether the list of insiders of insider information submitted in the early stage is complete and whether there is insider trading.
On the evening of June 17, Gree real estate replied to the Shanghai Stock Exchange’s inquiry about its major asset restructuring. If the company’s stock trading information is not disclosed, it should not affect the company’s normal operation. It has also conducted self-examination on the holding and trading of shares of the listed company by insiders of the reorganization within six months before the suspension of trading, and has obtained the certificate of shareholding and trading change of insiders of the insider information provided by Shanghai Branch of China registration and Clearing Corporation.
There was a demand for the stock price to rise
It is worth mentioning that it is not the first time that Gree real estate and lujunsi have become the focus of the market. On November 23, the Shanghai Stock Exchange issued a notice criticizing Lu Junsi, chairman and President of Zhuhai Investment Holding Co., Ltd. (hereinafter referred to as “Zhuhai investment”), the controlling shareholder of Gree real estate.
The circular pointed out that in August 2016, Gree real estate issued 442 million new shares in a non-public manner at the price of 6.78 yuan per share, raising 3 billion yuan. During the implementation of the non-public offering scheme, Zhuhai investment signed the conditional forward purchase agreement in response to the requirements of six fixed increase objects. However, Zhuhai investment did not timely disclose the major issues of non-public shares issued under the forward purchase agreement, which violated the relevant provisions.
According to media reports, at that time, Zhuhai investment also promised an annualized rate of return of 6.5% for the funds participating in the fixed increase of Gree real estate.
Lu Junsi, as the chairman of the board of directors of the controlling shareholder Zhuhai investment, as the main person in charge of the listed company and the controlling shareholder and the first person responsible for information disclosure, participated in the signing of relevant agreements, but failed to perform his duty diligently, failed to urge the controlling shareholder Zhuhai investment to inform the company of relevant matters and disclose them in time, and was responsible for the violations of the controlling shareholder.
According to the agreement, if the closing price of the secondary market of Gree real estate does not meet certain conditions within one year after the expiration of the lock-in period, Zhuhai investment needs to purchase the fixed increase shares from the fixed increase object. However, after the sales restriction period, due to the low stock price of Gree real estate, the stocks held by the above-mentioned fixed increase objects could not make profits, and did not get the cover of Gree real estate.
Last year and this year, four institutions that participated in the fixed increase applied to the court to freeze the 41.11% shares of Gree real estate held by Zhuhai investment. The four institutions are Guangzhou Financial Holding Group Co., Ltd., Hangzhou binchuang Equity Investment Co., Ltd., China Resources Shenzhen International Investment Trust Co., Ltd. and Guangzhou Xuanyuan Investment Management Co., Ltd.
“Zhuhai investment needs to complete all the details according to the agreement. After the fixed increase party withdraws according to the agreement, the equity freeze will be unfrozen.” A lawyer engaged in corporate securities once told the Financial Association. Shen Meng, executive director of Xiangsong capital, pointed out that the tender offer plan and major asset restructuring plan announced by Gree real estate have the effect of stimulating the stock price, and can be used as a solution that can cover all the details without paying.
In fact, during the period from May 25 to July 10 after the announcement of the tender offer for Zhumian group, the stock price of Gree real estate rose by 226.42%.
Tianyancha app shows that a number of cases of disputes over investment contracts between fixed value-added enterprises and Zhuhai have come to an end in recent months when fixed value-added enterprises withdraw their lawsuits.
It is also worth mentioning that before the announcement of the proposed tender offer for 100% of the equity of Zhumian group, Gree real estate was inquired by the Shanghai stock exchange for its medical company and mask export business, asking it to explain whether it used the hot market information to influence the stock price and whether there were any credit approval violations.
A person from Party B who served Gree real estate at that time disclosed to the financial association that Gree real estate was really making masks at that time. At that time, Gree real estate also wanted to acquire a target company in the medical industry, including the planned acquisition of the equity of Zhumian group later. Gree real estate also really wanted to raise the share price.