On the evening of May 19, Ruixing coffee announced that the company received the delisting notice from Nasdaq on May 15, and plans to hold a hearing on it. Before the results of the hearing, Ruixing coffee will continue to be listed on NASDAQ.
At present, Ruixing coffee is suspended. In addition, on May 12, the board of directors of Ruixing coffee terminated CEO Qian Zhiya and coo Liu Jian, asked them to resign from the board of directors and received their resignation.
Source: tiger trade
Many famous organizations step on thunder
Institutions reduce their holdings significantly in advance
By the end of the first quarter, 240 institutions held Ruixing coffee, accounting for up to 34.43% 。
It is worth noting that 64 institutions cleared their positions in the first quarter and sold them in total fifteen thousand three hundred and fifty-eight point one nine Million shares. Another 32 institutions reduced their holdings but did not clear their positions and sold them in total six thousand two hundred and fifty-eight point zero seven Million shares. If lucky coffee goes out of the market, it’s a lucky escape.
Tiger According to trade data, as of May 1, traditional investment managers held by capital research and management companies one thousand and eight point seven seven 10000 shares, holding ratio of 3.98% ; followed by Bank of America and BlackRock, holding four hundred and ninety-seven point three seven 10000 shares and four hundred and eighty-three point eight two Ten thousand shares with shareholding ratio of 1.96% and 1.91% New York Life Investment Company, pilot, Goldman Sachs and Wellington management company also hold a certain proportion of ruixinga Coffee.
In terms of hedge funds, Melvin capital, Renaissance and tybourne capital also hold more than 2 million shares of Ruixing coffee. In terms of venture capital / private equity, Dazheng capital holds one thousand eight hundred and nine point seven three 10000 shares, holding ratio of 7.15% In addition, in terms of investment banking, Morgan Stanley holds lucky coffee three hundred and sixty-four point nine one 10000 shares, holding ratio of 1.44% Haina international group and JPMorgan Chase also hold one hundred and seventy-eight point eight five 10000 shares and one hundred and fifty-nine point two six Ten thousand shares; Credit Suisse, Barclays, Wells Fargo, etc. also hold Ruixing coffee.
Or face us $10 billion recovery
After Ruixing’s fraud, investors have launched class action lawsuits. What punishment will Ruixing face? What are the responsibilities of compensation?
Zhongzhengjun interviewed Zhang Dan, partner of Beijing Anjie law firm. She said that Ruixing’s responsibilities mainly include civil liability and administrative liability, which may involve criminal liability. But at present, Ruixing’s executives are all in China, so it is less likely to be prosecuted for criminal liability.
In terms of administrative responsibility, if the exchange orders to delist, it has actually assumed administrative responsibility, but it may face some other penalties.
In terms of civil liability, it is mainly the compensation liability of civil litigation, that is, investors get compensation by initiating a lawsuit against Ruixing. Zhang Dan said that there are many law firms specialized in class action of small and medium shareholders in the United States. According to her understanding, after Ruixing’s fraud, four law firms specialized in class action have filed a lawsuit against Ruixing on behalf of investors, and the court has accepted it.
According to the analysis of song Yixin, a lawyer in Shanghai, if we take the period from the beginning of 2020 to the present, it is roughly estimated that Ruixing, who is facing class action, will face a total compensation of about 11.2 billion US dollars, equivalent to 75.4 billion yuan.
According to public information, on May 15, the high court of Hong Kong issued an asset freezing order to restrict any asset sale or transfer between Ruixing and entities registered in Hong Kong until further decisions were made by the courts. Among them, the 14 private equity and hedge funds that invested in Ruixing convertible bonds filed Ruixing coffee compensation lawsuit.
If there is a huge amount of compensation in the future, not only the company will make compensation, but also the relevant responsible directors will be liable for compensation. However, it is worth noting that Ruixing’s executives have previously purchased directors’ liability insurance, which is covered by a number of insurance companies. In this compensation, these insurance companies will also share the responsibility. However, it is not excluded that the insured insurance company believes that Ruixing’s executives constitute fraud and should not trigger insurance liability. Therefore, it may further cause compensation disputes between the executives and the insurance company about directors’ liability insurance in the future.
In fact, Zhang Dan believes that Ruixing coffee may face bankruptcy after huge compensation.
Review of Ruixing’s fraud
On April 2, local time, Ruixing coffee suddenly announced that since the second quarter of 2019, Liu Jian, the company’s chief operating officer and director, and several of its employees have engaged in some misconduct, including fabricating some transactions. The company will take some temporary remedial measures, including suspension of Liu Jian and his employees who are involved in his misconduct, suspension and termination of contracts and transactions with parties involved in the identified fabricated transactions.
According to the data confirmed in the preliminary internal investigation, from the second quarter of 2019 to the fourth quarter of 2019, the total sales related to the fabricated transactions is about 2.2 billion yuan.
The news caused a storm. Ruixing coffee fell sharply at the opening on April 2, triggering eight times of circuit breaker trading, and the stock price of the previous day twenty-six point one zero USD / share plummeted to four point nine one USD / share, closing on the last trading day (April 6) before the suspension four point three nine USD / share. At the beginning of 2020, the share price of Ruixing coffee once reached fifty-one point three eight USD / share.