On August 26, the board of directors of *ST Aige issued an announcement stating that the company will hold the second extraordinary general meeting of shareholders in 2021 on September 13, 2021.

A-share listed company *ST Aige (002619.SZ), which suffered a loss of 2.56 billion yuan in 2019 and 1.25 billion yuan in 2020, has fallen into a state of internal strife: the controlling shareholder Rizhao Yiju Equity Investment Center (referred to as Rizhao Yiju) filed a lawsuit against the company The temporary proposal submitted to the company's second extraordinary general meeting of shareholders in 2021 was rejected by the board of directors. The main content of the proposal is to nominate 9 candidates for the board of directors.

Behind the internal fighting is the bitter fruit of a traditional enterprise starting to "play" cross-border mergers and acquisitions.

The controlling shareholder "missed" the board of directors

html On August 26, the *ST Iger board of directors issued an announcement stating that the company will hold the second extraordinary shareholders' meeting of 2021 on September 13, 2021.

There are four matters for consideration at the meeting:

.01 Elect Mr. Zhu Xiongchun as a non-independent director of the fifth board of directors;

.02 Elect Mr. Li Fei as a non-independent director of the fifth board of directors ;

.03 Elect Ms. Yao Yanshuang as a non-independent director of the fifth board of directors;

.04 Elect Mr. Lu Chengjie as a non-independent director of the fifth board of directors;

Motion 1	"Proposal on changing the business scope, reducing board members and other matters and changes"
Motion 2	"Proposal on Nominating Ms. Qin Danfeng as Non-Employee Representative Supervisor of the Fifth Board of Supervisors in the General Election of the Company's Board of Supervisors 》
Proposal 3	"Proposal on the election of non-independent directors of the fifth board of directors"
Proposal 4	"Proposal on the election of independent directors of the fifth board of directors of the company"

.01 Mr. Xu Zili was elected as an independent director of the fifth session of the Board of Directors;

.02 Mr. Liang Ruiling was elected as an independent director of the fifth session of the Board of Directors.

Regarding the above proposals three and four, Rizhao Yiju put forward different opinions on August 31 and submitted three temporary proposals to the extraordinary general meeting of shareholders:

Proposal 1	"Proposal on the General Election of Non-Independent Directors of the Board of Directors"
Proposal 2	"Proposal on the General Election of Independent Directors of the Board of Directors"
Proposal Three	"Proposal on Modifications"

In the first proposal, Rizhao Yiju proposed Zhang Yunxia, Wang Wanyuan, Tao Shuai, Li Qingyan, Zhang Yong and other five people for the company. Not Candidates for independent directors. In the second proposal, Rizhao Yiju nominated Zhao Lisan, Wang Yan and Yang Minghai as independent director candidates.

However, all three proposals of Rizhao Yiju were rejected and could not be submitted to the extraordinary general meeting of shareholders for consideration. Beijing Junzhi Law Firm stated that after verification by lawyers, none of the director candidates nominated by Rizhao Yiju disclosed their educational background, part-time job status, or status as directors, supervisors, or senior managers in other institutions in the past five years.

There are flaws in the content of the temporary proposal. *ST Egger will not submit the temporary proposal proposed by Rizhao Yiju to the company's second temporary shareholders' meeting for review in 2021. The basis and related decisions are in compliance with the "Company Law" and the "Shareholders' Meeting of Listed Companies" "Rules" and other laws, regulations, normative documents and the relevant provisions of the "Articles of Association".

All the companies acquired at high premiums were thundered

Aigras was formerly known as Julong Pipe Industry . It was listed on the Shenzhen Stock Exchange small and medium-sized board in 2011. Its original main business was the concrete water pipeline business. After the listing of

, Julong Pipe’s main business growth was weak and its performance declined year after year.

In 2014, Julong Pipe Industry planned to acquire 100% of the equity of Aiglas Technology (Beijing) Co., Ltd. held by Rizhao Yiju Equity Investment Center (Limited Partnership) and others at a high premium through private placement, transforming the field of mobile gaming.

The announcement shows that 100% equity of Aiglas Technology was valued at 2.5 billion yuan. The estimated value-added rate during the equity acquisition was 1522.63%, forming goodwill of approximately 2.267 billion yuan.

In 2015, the reorganization was completed, and Julong Management’s main business became mobile online game development and operation. Yiju Investment held 15.46% of the shares of Julong Pipe Industry at that time and became the company's largest shareholder.

In 2017, Julong Pipe Industry also acquired 100% of the equity of Hangzhou Souying and Beijing Thumb Wan at a high premium, and signed a performance gambling agreement with the two companies.

Among them, the acquisition price of 100% of the equity of Beijing Thumb Wan was 338.5 million yuan, and the estimated value-added rate during the equity acquisition was 1609.64%, bringing goodwill of 269.4918 million yuan; the acquisition of 100% of the equity of Hangzhou Souying was priced at 1.355 billion yuan, and the equity acquisition was valued at 1.355 billion yuan. The assessed value-added rate is 1537.55%, forming goodwill of approximately 1.063 billion yuan.

After that, Julong Pipe sold its concrete water pipeline business and its related assets and liabilities, and fully transformed into the mobile Internet industry.

On July 11, 2017, Julong Pipe Industry issued an announcement that the company name was changed to Aiglas Co., Ltd., and the securities abbreviation was changed to Aiglas. After the reorganization of

, Aigaras achieved rapid growth from 2015 to 2018.

In 2019, Aigaras suffered huge losses. The 2019 annual report shows that Aiglas’ revenue was 550 million yuan, a decrease of 33.24% compared with the same period last year, and the net profit loss attributable to shareholders of listed companies was 2.556 billion yuan, a decrease of 481.53% compared with the same period last year, and a decrease of 481.53% compared with the same period last year. The sum of net profits is even greater.

The main reason for the loss is that the performance of Aigaras Technology itself and its two subsidiaries, Beijing Thumb Play and Hangzhou Souying, did not meet expectations, and accrued goodwill impairment.

Among them, Eglas Technology has accrued a goodwill impairment of approximately 1.855 billion yuan; Hangzhou Souying has not completed its performance commitments and has a goodwill impairment of approximately 907 million yuan; Beijing Thumb Play has not completed its performance commitments and accrued a goodwill impairment of approximately 907 million yuan. Valued at 182 million yuan.

According to the performance gambling agreement signed at the time of the acquisition, the original shareholders of Beijing Thumb Play should compensate Aiglas in a total of 150.7797 million yuan. After deducting the cash consideration receivable for the equity transaction, they still need to compensate Aiglas of 87.0088 million yuan; Hangzhou Search The shareholders of the original film should compensate Aigaras for a total of 896.7714 million yuan. After deducting the cash consideration receivable for the equity transaction, they still need to compensate Aigaras for a total of 530.9414 million yuan.

We also summarized the goodwill generated by Aiglas's "cross-border mergers and acquisitions":

In 2014, the company's mergers and acquisitions transformed, generating 2.267 billion yuan in goodwill.

In 2015, the acquisition of Hangzhou Souyingjing generated 1.063 billion yuan in goodwill.

In 2015, the merger and acquisition of Thumb Play generated 269 million yuan in goodwill.

In 2019, goodwill exploded, with a net profit loss of 2.56 billion yuan that year, and a loss of 3 billion yuan after deducting non-net profits, of which goodwill impairment was 2.96 billion yuan, and receivables bad debt losses were 79.28 million yuan.

is expected to suffer a full-year loss of 925 million yuan to 1.131 billion yuan in 2020, and the main reason for the loss is the impairment of goodwill of many previously acquired companies.

Important shareholders frequently reduced their holdings

Aiglas's stock price also skyrocketed and plummeted with the company's profit growth and huge losses.

In September 2016, Aiglas hit a record high of 15.05 yuan (before restoration of rights), and then fell all the way, reaching a low of 1.66 yuan this week. In 5 years, the market value has dropped by nearly 90%.

On the evening of November 17, 2020, an announcement issued by Aiglas showed that Yiju Investment, a shareholder holding more than 5% of the shares, planned to reduce its holdings by no more than 18.364 million shares due to its own capital needs.

According to disclosures, in 2015, Julong Pipe acquired 100% of the equity of Aiglas by issuing stocks, paying cash to purchase assets and raising supporting funds, and Yiju Investment subscribed for 68.4251 million shares. This year’s third quarter report shows that Yiju Investment holds 223 million shares of Aiglas, accounting for 12.07%.

This is the second round of reduction of Yiju Investment’s holdings this year. The announcement shows that from April to May 2020, Yiju Investment reduced its holdings of 9.5258 million shares in listed companies, with a price range of 2.2-2.27 yuan/share, and cashed out approximately 21.4331 million yuan.

Also the actual controller of Aigaras, Dragon Group, has started to frequently reduce its holdings. On the evening of the 17th, 2020, the listed company also disclosed a simplified equity change report stating that Julong Holdings, the actual controller's acting in concert, was involved in a breach of contract due to a pledged repurchase transaction, and pledgee CITIC Securities planned to pledge its shares. No more than 40.8919 million shares will be subject to default disposal.

also disclosed the reduction of holdings of Julong Group this year. From May to November 2020, Julong Holdings, Julong Culture, Lu Rengao, and Lu Chengjie reduced their holdings of 91.7864 million shares of listed companies in total, at an average price of 1.87-2.57 yuan/share, and cashed out more than 200 million yuan.

The risk of holding reduction by important shareholders continues. In August this year, 71.0873 million shares of Aiglas held by Yiju Investment were judicially frozen by the Hangzhou Intermediate People's Court. The specific matters involved are unknown, but the data from Tianyancha shows that Yiju Investment was once involved in the registration of business premises. Unable to contact him, he was listed on the list of abnormal business operations. There were also more than 20 surrounding risks and more than 100 early warning reminders.

In addition, Julong Group is also planning to transfer its controlling stake. In October 2021, the listed company's announcement showed that the actual controller and its persons acting in concert are planning to transfer the company's controlling interest in an agreement with Sichuan Juxin. If the agreement transfer is implemented, Sichuan Juxin or its designated party will directly hold Iger. Lars holds approximately 15.79% of the shares, and this matter will involve a change of control of the listed company. However, so far, there has been no substantial progress in the above-mentioned transfer of control.

Conclusion

In fact, there are a lot of listed companies that are keen on Internet finance , games, film and television and other emerging industries that cross borders. The depression of traditional industries, the rise of technological changes, the upgrading of consumption patterns, and changes in corporate production models have all made these industries more popular.

But transformation is not easy, especially in an industry that you are not familiar with. The reserve of talents and funds is the biggest problem. Cross-border mergers and acquisitions are not necessarily a shortcut, but may also be a dead end.

Every other line is like a mountain, and crossing boundaries is not so easy. This sentence could not be more suitable for Aigaras.