Private enterprise boss overseas backdoor lost in prison exposure management abuses

In the case of generous company's overseas listing, it reflects the risk of the transnational capital game, the greed of the overseas capital players and the management malpractice of the private enterprises.　　At the end of August 2010, Zhengzhou Chinese Court of Zhengzhou Generous Industrial Co., Ltd. (hereinafter referred to as "Zhengzhou generous") and Suzhou Generous Special Vehicles Co., Ltd. (hereinafter referred to as "Suzhou generous") the actual controller Li Rongsheng suspected of "financial fraud" case, will be published trial results. September 2009, Zhengzhou generous and Suzhou generous in the process of listing in Hong Kong Shell, and partners Wangxiaofeng disputes, resulting in the case of the listing of the death.　　Subsequently, the Zhengzhou police to Li Rongsheng suspected "financial fraud" for the basis of their custody.　　Li Rongsheng Two companies to the Hong Kong market borrow shell listing, but after entering the road stage, Lee found his stake in a series of complicated arrangements, by the absolute holding was diluted to only 2%, the company's control fell into the hands of intermediary agencies. Li Rongsheng immediately terminated the process of overseas borrowing and listing.　　But the attendant is, Lee himself in prison, the company account was closed, funds broken, operating into a predicament. Overseas direct listing or backdoor listing is one of the ways that some private enterprises solve the capital thirst.　　There are many successful cases, but due to the complex environment of overseas capital markets, the mixed intermediary agencies and private enterprises themselves, there are some enterprises through the ordeal, some drubbing and return.　　In the case of generous company's overseas listing, it reflects the risk of the transnational capital game, the greed of the overseas capital players and the management malpractice of the private enterprises. Listing Route Zhengzhou Generous was founded in 1984, Li Rongsheng shareholding 74%, is the first company engaged in bridge construction machinery leasing business.　　2005, Li Rongsheng also set up a generous Suzhou, the main production of special vehicles. Reporter access to relevant data shows that Suzhou generous 2008-year output value of nearly 400 million yuan, net profit of more than 30 million yuan.　　Earlier, Li Rongsheng to the media, if there is no backdoor incident, Zhengzhou generous and Suzhou generous two companies, the 2009 turnover will reach 1.2 billion yuan, 200 million of the profit.　　But the Li Rongsheng, which began in March 2009, has changed the trajectory of two generous companies in the market.　　Li Rongsheng's deputy lawyer Changong to the "Financial national weekly" reporter detailed Wangxiaofeng operation generous shell listing specific means and through. Wangxiaofeng, by Vande holding Li Rongsheng Zhengzhou generous 74% stake. Formally take the China Equity Investments 2¥q ("Wangxiaofeng wholly owned" Infrastructure Team Corporation ("Chinese Construction Heavy Industry Group Co., Ltd.") China Equity Investment Co., Ltd. "acquisition of Li Rongsheng Holdings Zhengzhou generous 74% equity, while the Zhengzhou generous increase of 37.8195 million yuan, the result is the total access to Zhengzhou generous 89.6% equity, ZhengState generous change to foreign holding enterprises. Suzhou generous second largest shareholder in Jiangsu Hui Fu Oriental Investment Company representative Yu Qiuxi for fear of Li Rongsheng to Zhengzhou generous conveying benefits, so find Li Rongsheng to discuss, Hui Fu East also want to take part in Zhengzhou generous shares.　　According to this idea, by Hui Fu Oriental's three investment companies and Li Rongsheng at the same time to Zhengzhou generous increase of 60 million yuan, both sides out 30 million yuan.　　However, as a result of the increase of 60 million yuan must be registered in the Henan provincial Trade and Industry Bureau, in order to simplify registration procedures, the parties agreed to reduce the increase to 37.8195 million yuan.　　In Wangxiaofeng's intervention, the parties agreed to Li Rongsheng and Hui-rich eastern part of the increase in Wangxiaofeng controlled by the company's behalf. For Suzhou generous, through the "China Construction heavy Industry" under the Topbest Glory 2¥q in Suzhou set up a wholly foreign-owned enterprise Suzhou Ding Excellent Technology Co., Ltd. "agreement control" and Suzhou generous total net profit to the Suzhou Ding excellent.　　"China Construction heavy Industry" by the merger and acquisition method to replace into Hong Kong stock Exchange listed companies FEI Development Holdings Limited (1141.HK), Fei Development will be renamed as "China Construction Heavy Industry Group Co., Ltd.". "We suddenly discovered that we were cheated before we went public. "August 20, 2010, Suzhou Generous executives accepted the" Financial countries weekly "reporter said," originally agreed to be listed by the Wangxiaofeng to hold Zhengzhou generous equity, the listing and then return, but Wang Jie Stark, change generation to hold for true; we're listing to raise money, But finally found that Li Rongsheng control of the listed company shares only 2%, the rest are convertible bonds, add up to 19%, and the restricted period of 2 years, which is far from the original intention of the listing. "At the end of July 2009, Li Rongsheng team went to Hong Kong Roadshow, The first time to see the stock market after the benefit distribution scheme: NET assets of 209 million yuan Xuzhou generous and net assets of 25 million yuan Zhengzhou generous bundled listing, access to FEI development paid 2.043 billion Hong Kong dollars, of which, Li Rongsheng and its team accounted for 754 million (31,342,304 shares +　　650 million convertible shares), Wangxiaofeng obtained 1.246 billion (500 million Hong Kong dollar cash +94,026,910 shares + 634 million convertible stock), Wangxiaofeng became the FEI development actual control person. Li Rongsheng immediately objected.　　Subsequently, FEI Development issued a notice, the end of the acquisition of "China Construction heavy Industry Company", the road to backdoor stopped. Controversy over "financial fraud" since October 2009, Li Rongsheng has been in custody for 10 months.　　Shrouded in the Li Rongsheng side, is still "financial fraud" shadow.　　Suzhou generosity of an executive staff to reporters, "fraud" refers to the Wangxiaofeng aspects of Zhengzhou generous 37.8195 million yuan to increase funds. In accordance with the design of both sides, in order to meet the conditions of overseas listing, generous company to change into Sino-foreign joint ventures, Li Rongsheng agreed to be Wangxiaofeng on behalf of Zhengzhou generous part of the equity. In accordance with the June 2009 Equity Transfer Agreement, Zhengzhou generous 74% shares are transferred to Wangxiaofeng in Virgin registered "China Equity Investment Company" in RMB 18 million, which is hung under the name of "China Construction heavy industry group". "The price of 18 million yuan is far below the real value of Zhengzhou's generous assets. "The value of Zhengzhou's generous assets should be 40 million or 50 million yuan," the executives said.　　"But since it is a Wangxiaofeng, these figures are ignored in the actual operation, and the money is not actually paid for in the field." Generous company assets to be bundled listing, the two assets, Zhengzhou generous dishes than Suzhou generous, Wangxiaofeng is only a piece of Zhengzhou. Subsequently, the two sides agreed to Zhengzhou generous to increase capital, the amount of 37.8195 million yuan. According to the arrangement, this part of the funds will ultimately be borne by the generous companies, the actual control Li Rongsheng and Suzhou Generous investors Yu Qiuxi representative of the Hui-rich Oriental Fund, each bear half.　　According to this arrangement, Li Rongsheng in advance will be 10 million yuan to Qiushui pool, please transfer to Wangxiaofeng aspects. Yu Qiuxi is one of Wangxiaofeng's agents in mainland China, and the deal between Li Rongsheng and Wangxiaofeng was brokered by him, and Wangxiaofeng never personally entered the negotiations in the mainland. Yu Qiuxi is the second largest shareholder in Suzhou, with a shareholding of 18%. But the Qiushui pool did not pay that half of the increase in capital, and did not receive the 10 million yuan transferred to Wangxiaofeng. "This 10 million yuan was Yu Qiuxi as an invitation to attract investment incentives."　　Suzhou's generous executive said. By August 2009, before the listing of the road, the Wangxiaofeng aspect in the form already is Zhengzhou generous big shareholder. In order to complete the asset evaluation before the IPO, the Wangxiaofeng aspect will 37.8195 million yuan to increase the funds to remit into Zhengzhou generous.　　These additional funds subsequently a part of the inflow to Suzhou generous, because Zhengzhou generous external leasing machinery from Suzhou generous supply.　　The word "scam" comes from that. "We only know that Yu Qiuxi has introduced a powerful overseas boss who has no idea that this person is Wangxiaofeng," said Wangxiaofeng, a senior executive at Wangxiaofeng, who mentions the key figure in the backdoor listing. "Prior to this, Wangxiaofeng in the domestic securities market has been very well-known."　　According to the relevant information, Wang graduated from the Cufe of the mainland in his early years and emigrated to Canada, mainly in the capital market of Hong Kong, and then gradually became involved in China. At the beginning of 2005, Wangxiaofeng, a senior executive at Sun Hung Kai Securities in Hong Kong, was chairman of Zhejiang Jin Shun trust.　　In July of that year, "the Bank of Scotland with 497.5 million Yuan stake in the Jinxin Trust" news hit, afterwards showed that the behind-the-scenes planning is Wangxiaofeng. At that time Jinxin Trust foreign investment subject was founded in 2005, the pan-surplus investment, the Scottish bank in the pan-surplus investment, only indirectly holding less than 4% of shareholders.　　Wangxiaofeng was chairman of the Jinxin Trust and directed the failed capital operation at the time of the Jinxin trust carrying a huge 2 billion-dollar debt and running into trouble. Suzhou generous after the end of the shell listing, bank accounts were frozen, capital turnover difficulties.With the help of Baosteel Group's financial support and Suzhou Municipal government, Suzhou's generous normal operation was restored. "Early, why, we have gone astray. "This is the most generous of Suzhou executives say." "We should have relied on the Suzhou government to find a reliable investment agency from the start." "Generous companies did not fully verify the financing channels beforehand."　　According to the introduction, the Suzhou government has a special team to help companies listed, but the company in the search for the public before and the government to ventilate. Wangxiaofeng intervention in Suzhou generous shell listing time, is in the spring of 2009.　　In June of that year, the CSRC launched the new issue system reform, the IPO reopened, in a few peer enterprises have landed a domestic A shares, the battered Suzhou generous, is still recovering from the vitality.　　Overseas listing is poison medicine?　　Overseas listing of the enterprises are not only generous family. For the vast majority of private enterprises, the domestic stock market threshold is too high, cumbersome procedures, and long queues waiting.　　Domestic financing difficulties, some companies began to seek other financing channels, "overseas listing" as one of the options. At present, China's small and medium-sized private enterprises listed abroad, mostly in the Hong Kong SAR, Singapore's gem and the United States OTCBB market. Its main way of listing, one is the IPO way directly listed, the second is to buy shell or shell listing.　　Because the direct listing procedure is complicated, the cost is high, the time is long, in order to avoid the domestic complicated examination and approval procedure, seemingly is one kind of "shortcut" the overseas borrowing shell listing by the private enterprise's favor.　　However, there are many pitfalls and crises in the overseas borrowing of shell listings. Saving money is a major factor in the overseas listing of many private enterprises. However, in terms of direct costs, overseas markets are much higher than the mainland market. The information shows that the financing cost accounted for the proportion of the financing, Nasdaq is more than 10%, and in Hong Kong, the motherboard is as high as 20%, the fixed cost of listing in Hong Kong is about HK $10 million, even in the Hong Kong gem, the cost is generally more than 15 million yuan, financing costs accounted for 10% of the financing amount　　~15% Singapore's initial listing cost about 8 million ~1000 million yuan, slightly lower than the cost of listing in Hong Kong. Xu Hongcai, a researcher at the Center for International Economic Research in China, said that overseas IPO intermediary fees are higher, intermediaries usually take 10% to 30% of the listed companies as intermediary fees, plus in Hong Kong, Singapore and other overseas listings, P/E is generally within 15 times times, compared with the domestic often dozens of times times the difference between the earnings　　Domestic assets are virtually lost. Offshore backdoor listings may also face risks. Xu Hongcai a negative attitude toward buying a shell listing, noting that the shell company itself will pay the price to issue new shares, and the original shareholders of shell companies will share their interests after the listing. "Private entrepreneurs who do not understand the rules of the game in overseas capital markets, and the misleading of intermediaries, tend to go public by buying a shell," he said. "Some private enterprises have bought shell companies and injected their own assets, but the agency has notThere is the stock name and code of the shell company, which is eventually manipulated by the intermediary agency.　　There are some intermediary agencies claimed not to charge fees, only to get a partial equity, and in the listing, the original private owners but become small shareholders. This time, by the Wangxiaofeng operation of the generous company overseas listing, originally arranged by Wangxiaofeng to hold Zhengzhou generous equity, after the listing and return, but after the operation of the layer, Wangxiaofeng become a major shareholder of listed companies, and generous actual control Li Rongsheng but only control the listed company shares 2%, protest, and financing the original intention runs counter.