According to the first-instance judgment of the Jinhua Court, the total value of the 175 million shares pledged by Shin Kong Group to Southwest Securities was only 340 million yuan based on the latest market price.

Source: Cailianshe

Original title: Southwest Securities The nearly 1 billion entrusted asset management plan fell into disgrace. The former richest woman in Zhejiang was awarded 930 million in damages, involving a huge loss of more than 4 billion in the listed company

After more than a year of prosecution, after After Shin Kong Group filed for bankruptcy and suffered a huge loss of more than 4 billion yuan in 2019, Southwest Securities ushered in the first-instance judgment of Zhejiang Jinhua Intermediate Court, confirming the ownership of 930 million yuan of creditor's rights.

However, the current total market value of Shin Kong Yuancheng (002147.SZ), which has been processed by ST, is only 3.56 billion yuan. According to the first-instance judgment of the Jinhua Court, the total value of the 175 million shares pledged by Shin Kong Group to Southwest Securities was only 340 million yuan based on the latest market price. This means that this time, the capital of Southwest Securities Asset Management Plan lost as much as 460 million yuan of the 800 million yuan in financing principal paid.

Legal sources said that in this equity pledge dispute case, the guaranteed part can be paid off first. However, due to the sharp decline in stock prices, the actual funds recovered by the brokers may not be enough to cover all claims. The person further said that if the company's bankruptcy is accepted, if you want to recover the remaining part, you can participate in bankruptcy liquidation as an ordinary creditor's right and declare the creditor's rights to the bankruptcy administrator.

Southwest Securities’ 930 million entrusted asset management plan is involved in a lawsuit

On May 9, 2016, Shin Kong Holdings Group Co., Ltd. (hereinafter referred to as Shin Kong Group) and the plaintiff Southwest Securities signed the "Stock Pledged Repurchase Transaction Business Agreement" (hereinafter referred to as the "Business Agreement"), stipulating that both parties agreed to the basis The terms and conditions of this agreement are used to conduct stock pledged repurchase transactions, which is a transaction in which Party A pledges the stocks or other securities it holds to Party B, injects funds to Party B, and agrees to return the funds and release the pledge in the future.

After the signing of the aforementioned "Business Agreement", the two parties executed the above-mentioned business in three stock pledge transactions. They were signed as "Business Agreements" on May 9, 2016, May 23, 2016, and June 2, 2016 respectively. "Three "Stock Pledged Repurchase Agreements" that are effective components, Shin Kong Group pledged 57.71 million shares, 80.47 million shares, and 63.89 million shares of Shin Kong Yuancheng shares to Southwest Securities, injecting funds of 300 million yuan and 400 million yuan respectively. and 300 million yuan, the repurchase period is 3 years, the annual interest rate for the repurchase is 6.9%, the interest payment method is the 20th of the last month of each natural quarter, and the liquidated damages rate is one thousandth per day.

On October 11, 2017, Southwest Securities and Shin Kong Group signed the "Partial Repurchase Agreement for Stock Pledged Repurchase Transactions". Shin Kong Group repurchased part of the stock for a repurchase amount of about 200 million yuan, including a principal of 2 billion, with an interest of more than 790,000 yuan.

On September 20, 2018, Shin Kong Group failed to pay the interest on the financing principal as agreed. Two months later, on November 16, Southwest Securities sued Shin Kong Group to the Chongqing Higher People's Court. After that, the case was transferred to the Intermediate People's Court of Jinhua City, Zhejiang Province for trial, and the first instance has now been concluded. Previously, on October 16, 2018, the court had ruled to conduct pre-litigation property preservation of Shin Kong Group’s property worth 829.7 million yuan.

On April 25, 2019, Zhejiang Jinhua Intermediate People’s Court ruled to accept Shin Kong Group’s bankruptcy and reorganization application.

On June 27, 2019, Southwest Securities applied to change the lawsuit for payment of the company's creditor's rights to a lawsuit for confirmation of creditor's rights. There are six main claims:

1. Request for a judgment to confirm that Southwest Securities has a creditor's right of 800 million yuan in principal against Shin Kong Group;

2. Request a judgment to confirm that Southwest Securities has interest claims against Shin Kong Group from June 21, 2018 to the date when the financing principal and interest are actually paid off, based on the financing principal of 800 million yuan, calculated at an annual interest rate of 6.9%;

3. Request a judgment to confirm that Southwest Securities has the right to default on Shin Kong Group from September 20, 2018 until the date of actual repayment of all financing principal and interest, based on the financing principal of 800 million yuan, calculated based on the annual interest rate of 17.1%

4. Request a judgment to confirm that Southwest Securities has a legal fee claim of 700,000 yuan against Shin Kong Group;

5. Request a judgment to confirm that Southwest Securities has 175 million shares of Shin Kong Yuancheng stock (002147.SZ) pledged to the plaintiff against Shin Kong Group Priority to be reimbursed ;

6. The litigation fees, preservation fees and other expenses for realizing the creditor's rights in this case shall be borne by Shin Kong Group.

The court held that since Shin Kong Group had filed an application for bankruptcy reorganization with the court on April 25, 2019, in accordance with paragraph 2 of Article 46 of the "Enterprise Bankruptcy Law of the People's Republic of China" "claims with interest attached shall be accepted from the bankruptcy application" According to the provisions of “Stop accruing interest from that time”, the loan interest, liquidated damages, etc. involved in the case should be calculated until April 24, 2019.

Secondly, Article 28 of the "Business Agreement" stipulates that "all expenses incurred by Party B to realize its claims shall be borne by Party A. Therefore, Southwest Securities' request for Shin Kong Group to pay legal fees of 700,000 yuan is in compliance with the agreement and the court supports it.

According to the relevant provisions of the "Enterprise Bankruptcy Law of the People's Republic of China", the claims involved in the case should be repaid through the bankruptcy proceedings of Shin Kong Group. In the lawsuit, the plaintiff also applied to change the lawsuit for payment in this case to a confirmation lawsuit.

On January 14, 2020, The first-instance judgment of the court is:

1. It is confirmed that Southwest Securities has a claim against the Shin Kong Group of RMB 800 million in principal, 47.23 million yuan in interest, and 82.46 million yuan in liquidated damages, totaling 929.7 million yuan;

2. It is confirmed that Southwest Securities has a claim against the defendant Shin Kong Group The claim for legal fees is RMB 700,000;

3. It is confirmed that the plaintiff Southwest Securities has the priority to receive repayment from the proceeds from the discount, auction or sale of the 175 million shares of Shin Kong Yuancheng stock pledged by the defendant Shin Kong Group within the scope of claims determined in the first and second items above. ;

4. The other claims of the plaintiff Southwest Securities Co., Ltd. are dismissed. The case acceptance fee of 4.25 million yuan and the preservation fee of 5,000 yuan will be borne by the defendant Xinguang Group Co., Ltd.

Southwest Securities stated in the announcement on the evening of February 11. As the manager of the asset management plan, the company only strictly follows the instructions of the client to handle relevant matters. The client will actually bear the final litigation results of the case. The above-mentioned case has no impact on the company's operations, financial status and solvency. All bonds were paid in full and on time, and no default occurred.

This means that the final loss of the equity pledge was the capital party of the asset management plan, and Southwest Securities was only responsible for the recovery.

Shanghai Chuangyuan Lawyer. Xu Feng, a partner of the firm, told reporters that in this equity pledge dispute case, the guaranteed part can be paid off first. However, due to the sharp decline in stock prices, the actual funds obtained by the securities firms may not be enough to cover all claims. It said that if the company is accepted for bankruptcy and wants to recover the remaining part, it can participate in bankruptcy liquidation as ordinary claims and declare claims to the bankruptcy administrator.

Shin Kong Group is expected to suffer a huge loss of 4.4 to 4.9 billion in 2019.

As early as 2018. On September 26, Xinguang Group was issued a letter of concern by the Shenzhen Stock Exchange due to a bond default of 2.23 billion yuan, and its founder Zhou Xiaoguang was listed as the person subject to execution by the court.

After that, Xinguang Yuancheng's 2018 results were announced, with a loss of 212 million yuan that year. According to the company’s official introduction, Shin Kong Group Co., Ltd. is a large-scale private group that integrates industry and finance with roots in China, global reach, and focus on innovation and empowerment. Since its establishment in 1995, it has been involved in jewelry, manufacturing, real estate, finance, Internet, investment, etc. industry. As of April 2018, it has 1 listed company, nearly 100 wholly-owned subsidiaries and holding companies, and more than 40 joint-stock companies.At its peak, the company's total assets reached more than 80 billion yuan.

Sky Eye Check shows that as of February 11, 2020, there were 105 court opening announcements involving Shin Kong Group, and there were 152 self-risks.

Zhou Xiaoguang started from scratch as a rural child, setting up a street stall, and later started a business with her husband Yu Yunxin. She is known as "China's most inspiring female entrepreneur" and "Zhejiang's richest woman". Zhou Xiaoguang once said in an interview that he is not afraid of starting over from scratch and is very confident in himself. He will face difficulties and challenges no matter what.

On December 31, 2019, the Market Ban Decision [2019] No. 3 issued by the Anhui Securities Regulatory Bureau showed that when Zhou Xiaoguang and Yu Yunxin served as directors and actual controllers of Shin Kong Yuancheng, they instigated and arranged for Shin Kong Group to occupy listed company funds for non-operational purposes related party transactions, illegal guarantees of listed companies, and joint borrowings, and failed to perform information disclosure obligations, and the circumstances were serious. In accordance with Article 233 of the Securities Law and Articles 3 and 5 of the Prohibition on Securities Market Entry (CSRC Order No. 115), the Anhui Securities Regulatory Bureau decided to impose a 10-year securities market ban on the two persons. No entry measures.

Xinguang Yuancheng is also in a very unfavorable situation. According to its 2019 performance forecast released on the evening of January 21, the company's annual loss reached between 4.4 billion and 4.9 billion yuan. Compared with the loss of 212 million yuan in 2018, the loss expanded. Dozens of times more.