Liu Changko Dictation: How does ang state education open a A-share door?

Since then, the "Private education promotion law" has become a difficult hurdle for the training institutions to enter a a-share. However, June 18 this year, this hurdle was passed by Shanghai Ang State education. As the first successful entry of a A-share training institutions, ANG education is how to solve the relevant policy constraints, Ang Li's strategy and experience can be replicated by other training institutions? Recently, Ang state education Chairman Liu Changko as a guest multi-network special event "they", tells about the UPS listing twists and turns experience. The following content according to the content of the speech: I came to Beijing yesterday, in order to participate in today's marathon, yesterday, when I saw Beijing such a severe haze, I gave myself a rational decision, if tomorrow morning PM2.5 index more than 200, I will abandon the race. But I took a look at Tiananmen Square this morning, I have a little regret at the scene, because I saw tens of thousands of marathon enthusiasts in warm up, enthusiastic competition, I feel is too sentimental, but in the face of nearly 400 PM2.5, I know for health, rational people should abandon the game. Later, I was thinking about a problem, when we are a person to make decisions, often very sensible, very rational, but in the face of group Choice, we often find it difficult to stick to their own hearts. In fact, we are doing education and training industry is also the case. From Hope dashed to dawning: Consider backdoor new Nanyang in 2007, 2008, after the new Oriental listing, the industry is like dropping the next bomb, everyone listed as a major goal, all want to do the listing of this job. Mr. Yu has been saying that he regrets the listing. I do not know whether this sentence is his true heart, or his excuse. But I believe that in a very quiet time, he may really think so, but in the face of market demand, in the face of shareholder demand, perhaps as I have just talked about the same as running a marathon, then the market environment has made it difficult for you to stick to your choice. After seeing the new Oriental listing, we are also anxious. The education and training industry in the past is like farmers farming, a point of cultivation, a harvest, is also very simple life. But after the capital came in, the competitive landscape was broken. In 2008, we also introduced an investment organization, but unlike many other training institutions, we introduced an industrial organization, the Baoyugang of Hong Kong. After the investment was over, we also launched a domestic listing in 2010. The ownership structure of our enterprise is comparatively special. The largest shareholder is the industrial group affiliated to Shanghai Jiaotong University, and the other is the management team. After the family came in, is equal to Jiaotong University is the first major shareholder, the package is the second largest shareholder. So we have 2010 years of Ping An securities, ask a law firm, to our organization, to help us do a full set of listing preparation. But in 2012, when we were almost ready, when we were serious about communicating with the Ministry of Education, the Ministry of Education told us that educational and training institutions could not be listed domestically. So we basically abandoned the domestic independent IPO. But in those two years, the agency'sThe approach gives us a lot of grooming. This carding in fact to our follow-up in this year can be successful with the new Nanyang Integration, played a very very big role. Later, we have a lawyer to advise, he said that since you can not independent IPO, why not with the new Nanyang restructuring. New Nanyang This enterprise is very special, it is a public company holding a listed enterprise, 1992 on the market, 20 years did not do any action in the capital market, because it is the enterprise of Jiaotong University, business inside also contains some education business, this lawyer told us, in his opinion, New Nanyang is the only domestic a-share market with education business listed companies. In his speech, we are determined to see if we can start the integration with the new Nanyang, but one of the biggest problems in our minds is the legal aspect. The setback of the water test reorganization: Break through the legal restrictions on the non-operating institutions This I think all of you in the education and training are aware that the private education institutions are registered in the Civil Affairs Department, the Civil Affairs Department registration is called non legal person, usually a school is a company, But the income and profits of schools can be merged into the company. This is actually a question worth exploring. Last year's March 25, our industry group decided to start restructuring, and then the new Nanyang suspension. In fact, we did not have too much in mind at that time, April 1, lixin about 60 accountants to our company, financial audit, the country Hao also sent three people to enter, together with the evaluation agencies, brokerage, and so on, a total of nearly 80 people's team worked for a full one months. In the process, I was impressed by a number of points: 1th, from the legal level, law firms in the history of corporate ownership changes in the search is very strict. Our business is June 18, 1992 set up, from June 18 set up that day, to last May, the entire history, the adjustment of your equity, and all have to check. We have made a round of capital increase in 2008 years, give a lot of employee equity, but these employee's equity is at that time is held, is by me and our company another founder on behalf of, then in this time all want to turn into the dominant shareholder, in the business sector all have to turn out. In this process, the law firm has to talk to everyone to make sure that there is no equity dispute over the shares. So at the legal level, the clarity of ownership and governance structure is very important. The other is actually the biggest problem of lawyers, as I mentioned earlier, that is, the Private Education Promotion Act, which is about the non-corporate entity of education. 2nd, from the level of accounting, we need to audit strictly according to accrual basis. Many of our colleagues here know that the vast majority of enterprises for tuition income recognition is the adoption of the system, that is, income to confirm income, rather than according to the actual service to the phased recognition of income. Luckily we've been preparing for it since 2008, and the entire income has been made up to the accrual basis. We have a strong IT management system to support our day-to-day management operations, otherwise, tens of thousands of, hundreds of thousands of ofStudents, without the relevant data support, can not be based on the accrual basis of financial accounting. In May, after the work of our intermediary agencies ended, we began reporting to the Ministry of Education for approval. Our materials in accordance with the procedures are first reported to the Ministry of Education of the state-funded management department, the state-owned assets received after the material, from the state-level value added to maintain the point of view, that there is no problem, after receiving the information, let us wait for notice. But then we wait for the notice is this project needs to get the Ministry of Education Law and Regulation Department, Planning Department, the Secretary of the circulation of the approval, I was in the heart is a bit cold, I feel this thing some hanging. The consultation process took about two months, with a lot of information added, in the consultation process, I have been involved, from the relevant departments of the Ministry of Education, they think that our educational and training institutions, is the "Private Education Promotion Act" inside the operating training institutions, but in the "Private Education Promotion Act" there is a sentence, The registration of the operating training institution is in the business sector, but the relevant registration rules are promulgated separately by the State Council, but the registration regulations have not been introduced. For the four kindergartens we hold, the Education Department considers this to be a national educational system and is not recommended for inclusion in listed companies, so the ministry is generally very supportive. Then we stripped off the kindergarten, good and then reported to the Ministry of Education, the Ministry of Education approved, and then submitted to the Ministry of Finance, the Ministry of Finance is also the implementation of state-funded supervision and management, the Ministry of Finance also approved, this time our confidence is very sufficient, that should be no problem. Then we report all the materials to the SFC, but after the report, the SFC has been communicating with us, the main problem is the legal and regulatory issues. November 19, the SFC reorganization Committee to review our project, and ultimately rejected our reorganization application, a very important issue, is the law and regulation issues. Because from the point of view of the SFC's reorganization committee, they will refer to the relevant industry authorities, but the main look is the existing laws and regulations, if the education of the university can be approved, which means that in China's capital market, the future of non-business assets, including hospitals or many other institutions, These non-commercial assets can be incorporated into the system of listed companies. So from the point of view of the reorganization Committee members, their dismissal is understandable. Two attempts after a positive policy: solving the problem of non-operating assets in fact, last July, the Shanghai city issued a relevant policy, operating training institutions can be allowed to register in the business sector. At the time of the meeting, a legal member of the reorganization Committee also mentioned the matter, when she said, "Your main business is in Shanghai, why not transfer all your schools registered in the Civil Affairs department to the business sector." But at that time the policy has just been introduced, the relevant implementation methods are not very familiar with, we think that the Ministry of Education and the Ministry of Finance have approved, that do not change the problem is not small, so there are some lucky psychology. After the dismissal, we took about four months to change all our training schools and outlets in Shanghai to be registered in the business sector. This May, IWe submitted the material to the SFC, from the perspective of early feedback, we feel that this is not a big problem. It was dismissed for two reasons, and the 1th is that the enterprise assets contain a large number of non-profit assets (non-running institutions). The second is the fire problem. When the materials were submitted in May this year, the above two issues were resolved 100%. So at that time we felt that this should not be too much, then the June 18, we have this project on the Reorganization Committee audit, five members probably asked for 30 minutes, and then unanimously passed. After the reorganization of the new Nanyang and the Ngong Legislature, many friends in the education circle called me and asked me about some of the relevant situations. First of all, I think this thing is a very good thing, because we do this education is a very good supplement to public education, I believe that if we do a good job, we can bring a lot of new ideas to our country's future education, so very meaningful. We also know, in fact, education and training still need some funds for research and development inputs, if can be combined with the capital market, can have a certain capital injection, can let us do something bigger, do something better for students, I think this itself is very meaningful. From another point of view, there are a lot of friends asked me, this enterprise can not also be restructured with the listed companies. I saw a lot of training companies in the previous paragraph, want to do some mergers and acquisitions, but look down the feeling there are two very big problems: the first issue is financial: most training institutions in the financial aspects of the concept of financial accounting or cash flow, not strictly according to the governance structure of an enterprise to govern, Not strictly according to the financial norms to establish accounts. So it is very difficult to comb it, here is perhaps more important point is, because it did not have the basis of data accumulation, you even want to put its account from the flow of the account to the accrual system can not turn, because there is no data basis. Another issue is legal: there are two other issues in the law and Regulation, the first one being the unclear ownership structure of many companies. Another problem is what I have just said, the people are not registered to the industrial and commercial registration, as far as I know, it seems that only Shanghai, Wenzhou issued the relevant policies, Chongqing recently seems to be in the pilot. But if the other cities do not have this policy, that is to say you have no way to register these institutions from the Civil Affairs department to the business sector, I believe that the material as long as submitted to the SFC, the SFC will certainly dismiss you. So this is a very central problem for most educational and training institutions. Of course, if the laws and regulations can be changed, a large number of domestic education and training institutions in the domestic listing of legal obstacles will be swept away, but if this policy is not introduced, the domestic training institutions independent IPO will still be difficult. So I think that this is a certain scarcity of education and the new Nanyang. First, the new Nanyang itself is the subordinate enterprises of Jiaotong University, and the ANG state education is also, while the new Nanyang is a A-share is the only one with education and training business listed EnterprisesSecond, the policy is positive, that is, Shanghai issued the relevant operating training institutions registration regulations. So these two things get together so that we can make this happen. Right, even at the scene, I still gave up the Beijing marathon this year, I think it is a rational decision. Here to share these with you, thank you!