In just three months, the former chairman of the board was investigated, two former executives were arrested, inventory disappeared, increased to 900 million, and 5 billion bad debts were exposed! Advance loss of 3 billion, or will face delisting! How many more ray? What happened to this 62 year old daily chemical company that has been listed in a shares for 28 years?
On the last day of January 2021, Guangzhou Langqi (000523, SZ), which is deeply trapped in the “black hole” of inventory, issued the performance forecast for 2020. It is estimated that the huge loss in 2020 will be 2.46 billion yuan to 3.56 billion yuan, from profit to loss. It is worth mentioning that the accumulated net profit in 30 years from 1990 to 2019 is only 577 million yuan, and the average annual profit is only about 19 million yuan. Such a company with an average annual net profit of only about 20 million in the past 30 years will lose 4.3-6.2 times of the accumulated net profit of the past 30 years in 2020!
At the same time, Guangzhou Langqi expects its net assets to be – 1.25 billion to – 1.95 billion yuan by the end of 2020. It may face delisting under the “new delisting rules”, and the company has also made a risk warning in the announcement.
Up to now, there are nearly 37000 shareholders stepping on thunder, and the latest market value of Guangzhou Langqi is only about 1.8 billion yuan. Who will pay for the inventory black hole of Guangzhou Langqi when former executives are frequently investigated? When can the current dilemma of litigation and overdue debts be alleviated? Who should be responsible for this huge financial “hole”? What should these nearly 37000 shareholders do?
Huge loss of 2.46-3.56 billion yuan, huge collection and storage funds are still difficult to fill the “black hole”
Since September last year, Guangzhou Langqi, an old daily chemical listed company, has fallen into the center of the storm: strange “missing” inventory, overdue huge debts, freezing of multiple bank accounts, freezing of land collection and storage funds, waiting for freezing of shares of some subsidiaries and grandchildren, frequent litigation and arbitration, issuing warning letter by CSRC, regulatory letter by Shenzhen Stock Exchange, and approval by CSRC Case investigation.
With the “thunder” all the way, the stock price of Guangzhou Langqi has been falling. Since September 2020, the stock price of Guangzhou Langqi has been cut. As of the close of January 29, the stock price of Guangzhou Langqi was 2.83 yuan / share, with a sharp drop of 5.03% on that day, and the total market value was only 1.776 billion yuan.
Guangzhou Langqi repeatedly stressed in the announcement that the company’s relevant risks are caused by trade business, and the rest of the business sectors are operating normally without significant adverse effects.
With the deepening of the investigation, the amount of suspected inventory of Guangzhou Langqi also increased from 572 million yuan to 898 million yuan, and the related suspected criminal acts are still under investigation.
According to the announcement disclosed by Guangzhou Langqi on January 4, as of December 30, 2020, the book balance of the company’s trade business accounts receivable was 3.130 billion yuan, and the overdue amount was 3.130 billion yuan; the book balance of the company’s trade business prepayment was 1.596 billion yuan, and the amount aging more than 90 days was 1.576 billion yuan; the company has obtained evidence to show that there is a third-party warehouse inventory amount in the trade business that is inconsistent with the actual account The total amount of delivered goods reached 898 million yuan, and the inventory of 342 million yuan was still unable to accurately verify the quantity and determine the ownership of goods due to site conditions.
The reporter of daily economic news noted that although Guangzhou Langqi will recognize about 2.6 billion yuan of non operating income in 2020 through the land acquisition and storage of the old headquarters, it is still difficult to fill the “black hole” of its trade business.
On January 31, the performance forecast released by Guangzhou Langqi showed that it was expected to lose 2.46-3.56 billion yuan in 2020, while the profit was 61 million yuan in the same period of last year, a decrease of 4109% – 5902% compared with the same period of last year.
Guangzhou Langqi explained the reasons for the performance changes in the announcement as follows:
First, the company actively and orderly withdrew from the bulk trade business with low efficiency and high income. As a result, the business income of bulk trade business in this period has decreased significantly, and the business income of other sectors except trade business is roughly the same as that in 2019.
Second, the company and its subsidiaries have withdrawn about 5 billion yuan of credit impairment losses. The company expects that a large number of trade businesses are related to criminal cases, and the possibility of recovery of related receivables and prepayment delivery is low. Based on the principle of prudence, the company made bad debt provision of about 3.2 billion yuan for accounts receivable of bulk trade business with business risk, and made bad debt provision of about 1.8 billion yuan for prepayment of bulk trade business with business risk.
Third, the provision for asset impairment is about 1.16 billion yuan, including 898 million yuan for the relevant third-party warehouse inventory transferred to the pending property profit and loss, and 139 million yuan for the held for sale assets of Jiangsu Qiheng agrochemical Technology Co., Ltd., which has 25% shares, after offsetting the advance equity transfer.
2415633950041362432.jpeg Langqi in Guangzhou. Photo by Wang Fan
The company says it will not conceal the crime
The reporter of “daily economic news” noticed that with the intervention of Guangzhou Langqi self inspection and public security organs, it was confirmed that there were criminal acts of relevant personnel behind the “black hole” of the company’s trade business. At present, many people have been taken compulsory measures by relevant departments.
Among them, Yao Zhiqi, the actual controller of the relevant warehousing company, has been put on file for investigation by Guangzhou police for suspected crimes; Chen Jianbin, former vice chairman and general manager of Guangzhou Langqi, and Wang Zhigang, former Secretary of the board of directors, have been put on file for investigation by the supervisory organ for suspected illegal duties; Deng Yu, Huang Jianbin, middle-level managers of Guangzhou Langqi, etc., have been arrested for embezzlement of funds by Nansha of Guangzhou Public Security Bureau The case was put on file for investigation.
According to Guangzhou Daily, Fu Yongguo, former chairman of Guangzhou Langqi, and some middle-level managers of Langqi company are under disciplinary review and supervision for suspected taking advantage of their positions to help enterprises controlled by some social personnel to seek illegal interests in the process of conducting business with Guangzhou Langqi, and accepting bribes from the other party. In the process, some of them were also found The supervision organ and the public security organ are investigating and investigating the suspected collusion with social personnel inside and outside to obtain the funds of the listed company.
“The company’s trade business involves the criminal acts of internal and external collusion and malicious encroachment on the assets of state-owned listed companies. At present, the supervision organs, public security organs, securities regulatory departments and other relevant departments are investigating, and the company has not yet known the specific conclusion. In the future, the company will perform the obligation of information disclosure in accordance with the law and regulations according to the investigation progress of relevant departments. ” Guangzhou Langqi said to reporters.
The official added: “the new team of the company will not conceal these criminal acts, and concealment is also a continuous harm to the company. Problems can’t be avoided. We can only fulfill the obligation of information disclosure in time and maintain normal production and operation stability at the same time. ”
The relevant person in charge of Guangzhou Langqi told the “daily economic news” that because the relevant personnel are suspected of malicious criminal acts of internal and external collusion, according to the principle of punishment before the people, the civil proceedings can only be carried out after the criminal proceedings are started. The company will bring the relevant civil proceedings in time after the investigation organ has found out the facts of the suspected criminal crimes, and firmly safeguard its legitimate rights and interests.
“At present, the investigation work of supervision organs, public security organs and other relevant departments is still in progress, and the company is still unable to know how much loss can be recovered or reduced through criminal recovery of stolen goods. According to the self-examination and the visit to customers and suppliers, the company, based on the principle of prudence and in strict accordance with the relevant provisions of the accounting standards, has withdrawn the corresponding provision for impairment of trade business receivables in 2020, which leads to huge losses. ” Guangzhou Langqi relevant person in charge said.
Or facing delisting, 2021 will become the key year of “shell protection”
According to the Shenzhen Stock Exchange’s Stock Listing Rules (revised in 2020) revised and issued on December 31, 2020 (the “new rules for delisting”), the Shenzhen Stock Exchange will implement the delisting risk warning for the listed companies whose audited net assets at the end of the latest accounting year are negative, that is, * ST; the first accounting year after the listed companies appear the above situation, If the audited net assets at the end of the period are negative, or the financial accounting report is issued with a qualified opinion, unable to express an opinion or negative opinion, the listed company will be delisted.
As the net assets of Guangzhou Langqi are expected to be negative by the end of 2020, under the “new rules for delisting”, Guangzhou Langqi will face the realistic risk of delisting. 2021 will be the key year for the company to successfully “protect the shell”. To ensure that it will not be directly delisted, Guangzhou Langqi must correct its net assets in 2021, and ensure that the type of annual audit report in 2021 is standard unqualified opinion.
Under the situation that the net assets are expected to be negative in 2020 and many internal management problems are exposed, Guangzhou Langqi will still face great pressure and challenges in 2021. So, does the company have a “shell protection” plan?
Guangzhou Langqi’s aforementioned internal staff told reporters: “relevant risk matters do show that there are loopholes in the company’s internal control system. After the new management of the company is in place, it has been speeding up the improvement of the company’s internal control system and the management system. As for whether it will withdraw from the market and whether there is a “shell protection” scheme, the announcement shall prevail, and the company will perform the relevant information disclosure obligations in a timely manner. ”
The reporter of daily economic news noticed that there have been some changes in the operation and management of Guangzhou Langqi. According to the announcement, after the inventory incident in September last year, Guangzhou Langqi first adjusted the company structure and functions of relevant departments at the end of October 2020, and the adjusted functional departments were set as “five departments, one office, one center”. Then, in early January 2021, the company decided to liquidate and cancel the joint-stock company Guangzhou Huiyin Langqi Equity Investment Fund Management Co., Ltd., and increase the capital of 200 million yuan to the wholly-owned subsidiary Guangzhou Langqi daily necessities Co., Ltd., the core production base of daily chemical products.
The reporter of daily economic news also learned from Guangzhou Langqi that the company has suspended the bulk trade business of chemical industry in October 2020 for the trade business that induces risks; in addition to bulk trade, daily chemical plants are in normal operation, and some upstream raw materials of surfactants and washing powder exports related to daily chemical business are also in normal operation.
“At present, the company firmly promotes the strategic goal of returning to the main business. The company’s own daily chemical brands such as “Langqi”, “gaofuli” and “Wanli” have a certain influence in the market. Its Huatang food also operates well. Guangshi Pineapple Beer has a bright future. In the future, the company will adhere to the development direction of green daily chemical and health food industries. ”