Lai Shen’s psychic infighting has welcomed the change of power for many years. Who should investors support？
The struggle for control among the founders of the A-share "Shanghai Jewelry First Share" Laishen Tongling (603900.SH) ushered in a turning point. On December 23rd, Ma Jun, the new controlling shareholder of the company, announced that he would convene the first extraordinary shareholders’ meeting in 2022 after the relevant resolutions of the board of directors and the board of supervisors were rejected, so as to nominate new directors and re-elect the board of directors of Lai Shen Tongling.
According to the investigation of the First Financial Reporter, there was an unexpected episode in the process of Ma Jun’s proposal to convene an extraordinary shareholders’ meeting. The four directors he requested to be removed chose to resign from the listed company one after another. In the past, these four directors kept the same opinion as Shen Dongjun in voting on many resolutions involving the board of directors, thus forming a "check and balance" on Ma Jun.
The departure of the above four directors may have cleared the "obstacle" for Ma Jun to take power. Once Ma Jun’s proposal is voted by the shareholders’ meeting, the new actual controller of the company will truly realize the purpose of actually controlling the company’s board of directors, so as to relieve the embarrassment of "nominal" power in the past. Then, can Ma Jun, who will regain power in the future, lead Lai Shen to get out of the predicament of past performance and low market value? The outside world remains to be seen.
(Lai Shen psychic listing ceremony)
"pinch point" to block or twist the situation
After being ceded half of the company’s equity by the judiciary and causing Ma Jun to become the actual controller of the listed company, Shen Dongjun, the chairman of Lai Shen Tongling, "stopped" the company at the corporate governance level to further control the listed company.
Prior to this, Ma Jun, the controlling shareholder and director of Lai Shen Tongling, requested to convene an extraordinary general meeting of shareholders, but it was rejected by both the board of directors and the board of supervisors of the company. On December 21st, Ma Jun told the First Financial Reporter that he had convened and presided over the company’s first extraordinary shareholders’ meeting in 2022 according to the Articles of Association, and informed the board of directors in writing.
Previously, Ma Jun issued four bills, with the intention of removing the original directors on the one hand, and adding new directors on the other, so as to "re-elect" the members of the board of directors of the company under Shen Dongjun and achieve the purpose of controlling the board of directors. However, these bills were all rejected by the board of directors and the board of supervisors of Lai Shen Tongling, and they held a meeting to "pinch the point" within the "latest" time required by the rules.
On December 6th, 2021, Lai Shen Tong Ling received a letter from Ma Jun on convening an extraordinary general meeting of shareholders of Lai Shen Tong Ling. As a shareholder holding more than 10% of the company’s shares (currently holding 85,575,000 shares, accounting for 25.13% of the total share capital), Ma Jun requested the board of directors of the company to convene an extraordinary general meeting in time according to the provisions of Article 49 of the Articles of Association.
According to Article 49 of the Articles of Association, shareholders who individually or collectively hold more than 10% of the shares of the company have the right to request the board of directors to convene an extraordinary general meeting of shareholders, and shall submit it to the board of directors in writing; The board of directors shall, in accordance with the provisions of laws, administrative regulations and articles of association, give written feedback on whether to agree or disagree to convene an extraordinary general meeting of shareholders within 10 days after receiving the request.
On December 16th, within "10 days" stipulated in the Articles of Association, Lai Shen Tongling convened a board meeting, vetoed the proposal put forward by Ma Jun, and did not agree to convene an extraordinary general meeting of shareholders. "Lai Shen’s psychic board of directors just’ squeezed’ the board meeting on the tenth day, and they used the’ delay’ time to the extreme." Ma Jun told the First Financial Reporter that on the same day, he also proposed to the company’s board of supervisors to convene an extraordinary general meeting of shareholders, so they must have "squeezed" the board of supervisors to discuss on the fifth day stipulated in the articles of association.
The above Articles of Association also stipulates that the board of directors does not agree to convene an extraordinary general meeting of shareholders, and shareholders who individually or collectively hold more than 10% of the company’s shares have the right to propose to the board of supervisors to convene an extraordinary general meeting of shareholders; If the Board of Supervisors agrees to convene an extraordinary shareholders’ meeting, it shall issue a notice of convening the shareholders’ meeting within 5 days after receiving the request.
Sure enough, on December 21, Lai Shen Tongling convened a board of supervisors, and Ma Jun’s proposal was not passed, and all three supervisors voted against it. "The company’s board of supervisors made a resolution and still did not agree to convene an extraordinary general meeting of shareholders." Lai Shen psychic said.
"They are making a final struggle. In fact, these are all in our expectation. My ultimate goal is to convene and convene an extraordinary shareholders meeting by myself." Ma Jun told reporters.
On the evening of December 23rd, according to Lai Shen’s psychic announcement, the extraordinary shareholders’ meeting convened by Ma Jun will be held on January 10th, 2022. Ma Jun’s intention is still to re-elect the board of directors and nominate new directors.
According to Ma Jun’s proposal, he plans to nominate Huang Guoxiong, Qian Zhi and Chen Yiping as candidates for independent directors of the fourth board of directors of Laishen Tongling, and said that he has fully understood the professional expertise, educational background, work experience and part-time positions of the nominees, and at the same time plans to by-elect Zhuang Ou as a director of the company.
The first financial reporter found that among the above three independent directors, Huang Guoxiong, 52, is currently the general manager of Yize Capital Management Co., Ltd.; Qian Zhi, 53, has a legal background. Since March 2006, he has served as the director and lawyer of Jiangsu Guanwen Law Firm. Since September 2017, he has served as an arbitrator of Nanjing Arbitration Commission, and has served as legal adviser of Nanjing Municipal People’s Government since December 2017. Another independent director candidate is 55-year-old Chen Yiping, who has a financial background. He used to be the secretary-general of Nanjing Institute of Certified Public Accountants, and now he is the director of Nanjing Zhongya Certified Public Accountants and the supervisor of Nanjing Institute of Certified Public Accountants.
According to a survey by the First Financial Reporter, Zhuang Ou, 55, was an "old colleague" of Ma Jun during his stay in the company. His public resume shows that Zhuang Ou has been the head of Lai Shen Tongling Commodity Innovation Center since 2006, and served as the chairman of the company’s supervisory board on January 12, 2015, until he left in August 2018.
After leaving Lai Shen Tongling, Zhuang Ou did not completely "break away" from this company. According to Tianyancha’s industrial and commercial data, Zhuang Ou is also an individual shareholder (holding 6.59907%) of Laishen Tongling shareholder Nanjing Chuanshi Meijing Investment Management Co., Ltd. (hereinafter referred to as "Chuanshi Meijing").
Whether Ma Jun’s above-mentioned proposal can finally be successfully passed at the shareholders’ meeting will "speak" the votes held by investors. By the end of the third quarterly report in 2021, the number of shareholders of Laishen Tongling was 16,490.
The First Financial Reporter inquired and confirmed that at present, Ma Jun is the largest shareholder of Lai Shen Tongling (holding 25.13%). His concerted action, Ma Qiao (the sister of Ma Jun), holds 15.58% of the company’s shares, Yan Yize (the wife of Ma Jun) holds 5.55% of the company’s shares, and Mei Jing, who has been handed down from generation to generation, holds 2.18%. Together, they control Lai Shen Tongling.
In other words, more than half of the shares are held by Shen Dongjun and other shareholders. At present, Shen Dongjun personally ranks as the second largest shareholder of Laishen Tongling, holding 15.58%; Eurostar Diamonds International S.A. and EURO DIAMOND (HK) LIMITED, holding 7.26% and 3.63% respectively. According to the third quarterly report in 2021, the top ten shareholders hold a total of 76.49%.
The extraordinary shareholders’ meeting proposed by Ma Jun will be held in date of record on January 5, 2022. As of December 23, Laishen Tongling’s share price was 7.36 yuan, with a total market value of 2.506 billion yuan.
"I really can’t understand that Shen Dongjun is still unwilling to quit the company’s board of directors. In recent years, under his rule, the company’s performance and stock price have been sluggish. In fact, he is also a shareholder of a listed company. If he is unable to run the company well, he will quickly abdicate and make way for it. If this internal friction continues, the longer it takes, the more unfavorable it is to the listed company. Once the stock price fluctuates and falls, investors from all sides will suffer." An interviewed Lai Shen psychic shareholder told the First Financial Reporter.
It is foreseeable that if the re-election of the board of directors of Lai Shen Tongling cannot be settled, the company’s infighting that has lasted for one year will continue.
Independent director resigned "strangely"
Just after Ma Jun proposed to remove four directors (including one director and three independent directors) during Shen Dongjun’s rule, they chose to leave one after another. In the past, when the battle for control of the company between Shen Dongjun and Ma’s family began, these four directors chose to "stand in line" with Shen Dongjun in the voting of several resolutions of the board of directors of the company to express their unanimous opinion. This has aroused the concern of the outside world. What is the reason for their resignation?
On December 6th, Ma Jun requested the board of directors of Lai Shen Tongling to convene a shareholders’ meeting, and submitted four proposals for consideration at the extraordinary shareholders’ meeting, including the removal of non-independent director Chen Chuanming (Proposal 1) and the removal of three independent directors Zhou Xiaohu, Hu Xiaoming and Dechun Huang (Proposal 3).
The reasons for Ma Jun’s recall show that the above four people had been involved in the division of property in the divorce case between Ma’s family and Shen Dongjun as Lai Shen’s psychic directors.
Ma Jun said that on January 18, 2021, Chen Chuanming, Zhou Xiaohu, Hu Xiaoming and Dechun Huang sent a letter to the Qinhuai District People’s Court in the name of Lai Shen Tong Ling’s directors, suggesting that the court should not divide the shares of Lai Shen Tong Ling involved in Shen Dongjun’s divorce and adopt a discount compensation method to pay Ma Qiao the corresponding price, which is suspected of abusing the powers of directors; On October 26th, 2021, four people voted in favor of the Proposal on Participating in the Second Instance Procedure of the Divorce Case between Shen Dongjun and Ma Qiao as a Third Party without Independent Claim submitted by Shen Dongjun to the Sixth Meeting of the Fourth Board of Directors for deliberation, which was not within the scope of the Board of Directors’ authority and violated its due loyalty and diligence obligations to the company. Ma Jun even pointed out that these three independent directors "lost their independence".
Upon inquiry by the First Financial Reporter, it was learned that the above directors Chen Chuanming, Zhou Xiaohu, Hu Xiaoming and Dechun Huang were appointed to the board of directors of Xinlaishen Psychic in May 2019, July 2019, January 2021 and January 2021 respectively.
Just as Ma Jun proposed to remove the above four directors, they successively chose to resign. The first person who submitted his resignation was Hu Xiaoming, an independent director. On the afternoon of December 9, he submitted a written resignation report to the board of directors of Lai Shen Tongling, "resigning as an independent director of the company and a member of the special committee of the board of directors for personal reasons." Then, on December 16th, the board of directors of Lai Shen Tongling received a written resignation report from director Chen Chuanming, and Chen Chuanming resigned as a director of the company for personal reasons. Five days later, on December 21st, independent directors Zhou Xiaohu and Huang Dechun also submitted written resignation reports, and they resigned as independent directors and members of special committees of the board of directors for personal reasons.
As a result of the resignations of Zhou Xiaohu, Hu Xiaoming and Dechun Huang mentioned above, the proportion of independent directors in the board of directors of Lai Shen Tongling is less than one third. Before the by-election of new independent directors at the shareholders’ meeting, the three of them will continue to perform their duties.
On December 16th, Lai Shen Tongling held a board meeting. In the end, Ma Jun’s proposal to remove the above four directors was not passed at the board meeting with the result of "2 votes in favor, 5 votes against and 0 votes abstained". Even though they have resigned, these three independent directors, Zhou Xiaohu, Hu Xiaoming and Dechun Huang, still agree with Shen Dongjun’s opinion and all voted against Ma Jun’s motion.
Based on their "reasons for opposition", according to the "Guiding Opinions on Establishing the Independent Director System in Listed Companies" issued by the CSRC, the replacement of independent directors should be legal and standardized. If an independent director fails to attend the board meeting in person for three consecutive times, the board of directors will ask the shareholders’ meeting to replace him.
Their "reasons for opposition" said that independent directors should not be dismissed without reason before the expiration of their term of office, except for the above situation and the situation that they are not allowed to serve as directors as stipulated in the Company Law. "The existing independent directors have a term of office of three years, and they are currently in the term of office, which meets the qualifications suitable for their functions and powers, and there is no situation that they are not allowed to serve as independent directors. The independent director’s proposal to the Qinhuai District People’s Court in Nanjing does not belong to any situation that can be dismissed before the expiration of the above term. "
Zhou Xiaohu, an independent director, said that Shen Dongjun’s divorce case may involve a change in the company’s equity, which may have a major impact on the company. "From the perspective of maintaining the company’s operational stability, we should consider the business factors in the judgment process, precisely because of the interests of shareholders, especially the interests of minority shareholders."
Zhou Xiaohu claimed that, in fact, it has also shown that the divorce lawsuit between Shen Dongjun and Ma Qiao has brought great influence to the company’s development. "Including this proposal itself confirms the fluctuations we foresee; As for the shareholders who claimed that Shen Dongjun did not have the ability to be the president of the company, it seriously affected the company’s development, including the increase of inventory, etc. "Since we joined the company, the shareholders who proposed this proposal have never put forward substantive opinions on the company’s business development, and have never shown the willingness to operate and better ability. Therefore, this view is not only far from social common sense judgment, but also gives people the feeling that it is more based on family factors and is opposed for opposition, without considering the interests of many minority shareholders of the company. " Zhou Xiaohu said.
In this regard, a person who participated in Lai Shen’s psychic board meeting told the First Financial Reporter that the board of directors only discussed Ma Jun’s proposal to convene an extraordinary shareholders’ meeting, and neither dismissed Shen Dongjun nor denied Shen Dongjun. However, independent director Zhou Xiaohu put forward a proposal unrelated to convening an extraordinary shareholders’ meeting, which was out of the scope of discussion at all. "
"Before we left (Lai Shen) Psychic in 2018, we actually put forward a lot of opinions on the company’s brand strategy and business strategy, as small as every operation and management detail of the company, but Shen Dongjun, then the chairman, general manager and secretary-general,’ shouldered the burden’, he rejected all our opinions, of course, this is also within his scope of authority." Earlier, Ma Jun told the First Financial Reporter that after leaving the psychic, Shen Dongjun controlled six of the eight seats on the board of directors, and he and his wife, Yi Yize, only had two seats.
"Therefore, we will not pass any opinions and objections on business, so after the announcement, the internal contradictions of the company will be exposed, which is actually not good for the image of listed companies." Ma Jun said.
"If independent director Zhou Xiaohu regards Shen Dongjun’s performance report card for four consecutive years as a strong performance, I seriously question his ability and lack independence and impartiality." Ma Jun said.
In addition to the above-mentioned board of directors, the First Financial Reporter found that Chen Chuanming, Zhou Xiaohu, Hu Xiaoming and Dechun Huang all agreed with Shen Dongjun in previous board resolutions. Including the recent proposal that Shen Dongjun intends to hire Jie Jiang as the company’s president, Ma Jun and Yan Yize clearly expressed their opposition and "even suspected that Shen Dongjun and Jie Jiang’s real purpose was to use transactions and other behaviors to transfer interests and harm the interests of listed companies and small and medium-sized shareholders". In this case, they did not raise any objection and still voted in favor, which was consistent with Shen Dongjun’s opinion.
"As an independent director of the company, we unanimously agreed to this appointment." On December 9th, Zhou Xiaohu, Hu Xiaoming and Dechun Huang issued independent opinions.
For the reasons for the departure of the above four directors, CBN reporter failed to contact them for comment. However, after announcing their resignation, they will completely withdraw from the power struggle within Lai Shen’s psychic. "This is also a good thing for them." An investor who has long been concerned about Lai Shen’s psychic told reporters.
"If the proposal put forward by shareholders violates the interests of minority shareholders, independent directors can’t express their independent opinions fairly. In the future, once they are held accountable by supervision, independent directors will also bear corresponding responsibilities." A former independent director of a listed company told the First Financial Reporter.
Recently, influenced by the trial results of Kangmei Pharmaceutical’s civil compensation case, the A-share market staged a "resignation wave" of independent directors, which played a shocking role for this group. "Many independent directors will pay more attention to their responsibilities and risk of performing their duties when voting on the proposal of listed companies." A listed company research expert said.
Reporting/feedback