Welcome to the wechat subscription number of chuangshiji
By Zhang Kexin
According to the punishment of the General Administration of market supervision, a lawyer said that “for 45 companies involved in fines, the maximum penalty is 90 million yuan, compared with 61 million yuan, which is not small”. In the future, what kind of punishment may Ruixing face for financial fraud?
Will lucky coffee (NASDAQ: LK) be full of vitality soon?
On September 22, the State Administration of Market Supervision announced that it had made an administrative punishment decision on Ruixing coffee (China) Co., Ltd., Ruixing coffee (Beijing) Co., Ltd., and 43 third-party companies that played a role in helping false publicity in Ruixing incident, with a total penalty of 61 million yuan.
In this regard, Ruixing also made a quick response with sincere attitude, saying that it would further “guarantee stable operation”.
A screenshot of lucky statement.
Obviously, the total penalty of 45 companies is 61 million yuan, which is just a drop in the bucket compared with the capital benefits that lucky seized by virtue of the inflated net income of 2.12 billion yuan and the false increase of costs and expenses of 1.34 billion yuan in 2019.
As the first punishment result received by Ruixing in China, it attracted public attention as soon as it was released. “It seems that Ruixing coffee has come back to life”. When landing Ruixing coffee app, no crown financial researcher also found that Ruixing was steadily introducing new products, including Mid Autumn Festival Limited moon cakes, surrounding fashionable products and coffee series.
But how far away is lucky from real safety?
Is the fine of 61 million yuan light?
In fact, the punishment result of the State Administration of market supervision is only “the first boot falls to the ground”. In view of Ruixing’s financial fraud, the Ministry of Finance and the Securities Regulatory Commission will continue to disclose specific penalties in the future.
However, due to the scope of power of the regulatory agencies, the punishment of the State Administration of market supervision only aims at false propaganda.
According to the notice, during April to December, 2019, Ruixing, with the help of a number of third-party companies, falsely increased key marketing indicators such as sales revenue, cost and profit margin of relevant commodities in 2019 due to its competitive advantages and trading opportunities. The data will be widely used by the public through various deceptive channels from August 2020 to April 2020.
Among them, the third-party companies that helped Ruixing coffee counterfeit include Zhengzhe international trade (Xiamen) Co., Ltd. controlled by Wang Baiyin, who was previously accused of transferring interests with Lu Zhengyao, Beijing chehang Tianxia Consulting Service Co., Ltd., and Beijing Shenzhou Youtong Technology Development Co., Ltd.
Lu Zhengyao, former chairman of lucky coffee.
According to the investigation, Beijing Shenzhou Youtong Technology Development Co., Ltd. has no equity connection with the Shenzhou car rental and Youche owned by Lu Zhengyao, and Shenzhou Youche Co., Ltd., once a non natural person investor of Beijing auto bank Tianxia Consulting Service Co., Ltd., also withdrew in 2015. Therefore, it is impossible to confirm the possibility of Lu Zhengyao’s participation in counterfeiting according to the relevance.
Finally, 45 companies including Ruixing were fined 61 million yuan for violating the relevant regulations of the Anti Unfair Competition Law of the people’s Republic of China.
As for the amount of penalty, after consulting with you Yunting, senior partner and intellectual property lawyer of Shanghai Dabang law firm, the uncrowned financial researcher learned that according to the Anti Unfair Competition Law of the people’s Republic of China, a company that constitutes a false propaganda or helps to conduct false publicity shall be fined not less than 1 million yuan but not more than 2 million yuan, and its business license may be revoked.
“As a result, 45 companies involved in fines will be fined 90 million yuan at most, compared with 61 million yuan.” You Yunting said.
In the future, according to the scope of powers of the Ministry of Finance and the CSRC, what are the possible penalties for lucky coffee?
According to you Yunting, “the punishment of the Ministry of finance should be related to making false accounts, involving the accounting law.”
Among them, according to Article 43 of the accounting law, those who forge or alter accounting documents and account books and prepare false financial and accounting reports, which constitute a crime, will be investigated for criminal responsibility according to law. If the person in charge directly in charge and other persons directly responsible may be fined not less than 3000 yuan but not more than 50000 yuan, and the accounting personnel among them shall not engage in accounting work for five years.
“The CSRC is more likely to be involved in the crime of illegal disclosure and non disclosure of important information, which is also a criminal responsibility.” “If the circumstances are serious, the person in charge and other persons directly responsible for the case shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also, or shall only, be fined not less than 20000 yuan but not more than 200000 yuan,” you Yunting told the UN crowned financial researcher
“But lucky coffee is a listed company in the United States, so there is no case in practice whether this is applicable. But I personally think it should be applicable. ” You Yunting added.
It can be seen from this that, as far as the punishment result of the State Administration of market supervision is concerned, Ruixing can be said to have “survived a disaster”. However, in the future, the market may be most concerned about whether Lu Zhengyao needs to bear the relevant criminal responsibility in China, which needs to be issued by the Ministry of Finance and the CSRC.
Will Lu Zhengyao be punished?
Although a number of investors and lawyers have told Wumian financial researcher, “it is impossible for the company’s actual controller not to be unaware of such a large amount of fraud”, but “legal attention should be paid to evidence, and the power of self-examination is limited after all.”.
In June this year, Caixin reported that “the relevant departments have mastered the mandatory e-mail of Ruixing Chairman Lu Zhengyao on the financial fraud of the company”. Up to now, there has been no criminal accountability directly pointed out by the evidence.
Review of Ruixing’s fraud.
This seems to give Lu Zhengyao a lot of time to “get out.”.
In July this year, Lu Zhengyao and Ruixing successively went through the board of directors, the general meeting of shareholders of the company, and the trial of the court in Cayman against the liquidation of the remaining shares of Lu Zhengyao and Qian Zhiya led by Credit Suisse Group. Since then, Lu Zhengyao left Ruixing’s board of directors and management and lost all shares.
However, at that time, the market believed that this was just Lu Zhengyao’s “golden cicada” plan. Although he was no longer in office, he was still able to control lucky by firmly grasping the board of directors and the company’s business decisions.
Lu Zhengyao, at the cost of his resignation as chairman of the board of directors, squeezed out Li Hui, Liu Erhai and Shao Xiaoheng as “former comrades in arms”, and recommended all of them to the top.
Among them, Shao Xiaoheng is the leader of the special investigation team of Ruixing coffee. During the investigation, Lu Zhengyao was dissatisfied with the active promotion of self-examination.
In this regard, Hao Junbo, an American stock rights lawyer and a lawyer representing Ruixing coffee investors, once told 11 people in finance and economics that “if the three people (Shao Xiaoheng, Li Hui, and Liu Erhai) are removed, it means that the investigation may not continue. A complete replacement may also be conducive to confusion of responsibilities. These three people don’t want to be removed. They want to continue to investigate and find out the responsibility. ”
Fortunately, on September 2, Shao Xiaoheng was reappointed as an independent director of the company at the latest special shareholders’ meeting held by lucky coffee. According to Caixin, whether it will return to the board of directors was passed by a close vote at the shareholders’ meeting.
It is speculated that “it should be the driving result of big Zheng capital and pleasure capital”. Therefore, can the internal investigation continue smoothly?
Dazheng capital said that the restoration of Shao Xiaoheng’s directorship would enable the board of directors to continue to urge the company to implement the remedial measures proposed by the Special Committee on financial fraud. According to Caixin, a person close to Ruixing was quoted as saying that the remedial measures include the handling of employees suspected of fraud and severing the relationship with the third party of related party transactions.
At present, Dazheng capital is the actual controller of lucky coffee, accounting for 7.15% of the shares, and the voting right has increased to 43.5%. The board of directors of the company is composed of four independent directors from outside, including Shao Xiaoheng, and three executive directors. The three executive directors were previously regarded as Lu Zhengyao’s “own people”, mainly in charge of the company’s management and operation.
In addition, Caixin quoted Ruixing insiders as saying, “as the company has entered the provisional liquidation process, shareholder class action, creditor litigation and so on are in suspension.”. In the future, it is still uncertain whether the company can find out the key evidence of Lu Zhengyao’s remote control fraud, and the degree of punishment or administrative punishment it will face overseas.
As for Ruixing, which strives to maintain “normal operation”, it is not known whether it will be unable to conduct a new round of financing due to the drag of the investigation, thus causing operational problems.
After all, Ruixing coffee is a hot potato for investors at this time, and the company can only stop bleeding by greatly compressing the franchise store Xiaolu tea and closing the store on a large scale.
At this time, the question of “whether the business model and business logic of lucky coffee is established or not” has really become the first problem to be solved by the company.
(statement: This article only represents the author’s point of view, not Sina’s position.)