ST Huawang (603007.SH) issued an announcement. The company received the China Securities Regulatory Authority on December 7, 2023...
Zhitong Finance App News, ST Huawang (603007.SH) issued an announcement. On December 7, 2023, the company received the China Securities Regulatory Commission's “Decision on Administrative Supervision Measures” ([2023] No. 159) and “Decision of the Jiangsu Securities Regulatory Bureau on Issuing Warning Letter Measures against Huawang Ecological Engineering Co., Ltd. and related personnel”.
According to reports, in 2017, the company acquired 60% of the shares of Zhengzhou Water Construction Engineering Co., Ltd. (“Zhengzhou Water”) and signed an agreement with the original shareholders of Zhengzhou Water. Zhengzhou Water achieved a total net profit of not less than 142 million yuan during the 2017 to 2019 performance commitment period. In April 2018 and March 2020, the company also signed two supplementary agreements with the original shareholders of Zhengzhou Water. Some of the terms involved the company's commitment to provide subsequent support for matters such as water financing guarantees and project acceptance in Zhengzhou, and to reduce the net profit amount of 15 million yuan from the original performance promise. The above supplementary agreement was not reviewed by the board of directors or shareholders' meeting. The signing of two supplementary agreements was an important step forward in the early acquisition. The company did not make an interim announcement, in violation of the provisions of section 2 (1) and section 32 of the “Administrative Measures on Information Disclosure of Listed Companies” (Securities Regulatory Commission Order No. 40).
The actual controller of the company, Xiao Guoqiang, then chairman, Li Hongbin, then secretary of the board of directors, and Xiao Jiejun, then secretary of the board of directors, violated the provisions of section 3 of the “Administrative Measures on Information Disclosure of Listed Companies” (Securities Regulatory Commission Order No. 40), failed to perform their duties faithfully and diligently, and were responsible for the company's irregularities. According to the provisions of Article 59 (3) of the “Administrative Measures on Information Disclosure of Listed Companies” (Securities Regulatory Commission Order No. 40), the Jiangsu Regulatory Bureau decided to take administrative supervision measures to issue warning letters against the company, Xiao Guoqiang, Li Hongbin, and Xiao Jiejun, and record them in the securities and futures market integrity file.