The dream of dense weaving connected to the Dragon Department was finally shattered

In Chang Yuan Investment, Fujian Yue Huadiao two "Shenlong series" listed companies, by the regulatory authorities to investigate and even towards the edge of the city, Chen Kegen, Chen Ken two brothers as the actual control, to the listed companies as an important link, through the complex equity and interpersonal relationships woven a series of related enterprises of the thick thorough of the rich network. It is this net, gradually let two of listed companies of the vitality of the disappearance of the perilous Jing today, with the improvement of the legal system of China's securities market and the improvement of the level of corporate governance, Chen's brother's "The Dragon System" has become a typical case in a historical stage.　　Remind investors, listed companies and regulators to work together to prevent similar incidents from happening again. The problem of "occupying capital" of the affiliated enterprises in the dense network has been brought down by Chang-yuan investment in Fujian Chang Yuan Investment Co., Ltd. was established in 1993, listed in Shenzhen in March 1996, as of 2006 its main shareholders include Shenlong Group, Shenlong International, Xiangshan Gold Coast Hotel Co. 11.57% of the shares.　　The Dragon Group and the Dragon International's actual control person is the former wind and cloud Chen brothers.　　At that time, Chang-yuan investment in the main subsidiaries and equity enterprises, including Fujian, Hong Kong blessing, Shanghai Zhong Fu, excellent star textile and so on, including the former two for its wholly-owned subsidiary, 2001 years after the years, the Chang-yuan investment in some of the funds are flowing through these subsidiaries. 2001-2004, the Gold Shuttle real estate, Fonte trade, overseas benefit real Estate, Xin whole trade, Jiangsu Octopus Real Estate and other enterprises with Changyuan investment close, through with Changyuan Investment or its company signed a loan contract, the transfer of the end of the paragraph, reduce receivables and other means of illegal occupation of listed company funds.　　As at the end of 2004, the above-mentioned companies occupy Chang-yuan investment fund balance is 26.895 million yuan, 10.613 million yuan, 3.021 million yuan, 1.05 million yuan, 10.935 million yuan.　　This series of companies may not be able to identify the mystery if they are not carefully identified. Illegal accounting at that time, the Golden Shuttle real Estate legal representative for Chen Kegen, Fonte trade holding shareholder is Chen Ken brother-in-law, overseas benefit real Estate legal representative, Xin all trade deputy general manager and other people also have countless ties with Chen's brother.　　And the above-mentioned illegal accounted for enterprises are Chang-yuan investment related enterprises.　　In addition to misappropriation of listed company funds through affiliated enterprises, Chen Brothers is also suspected of directly to the capital of the hand into the Chang-yuan investment, to make a direct investment in the Chang-yuan Securities Company to finance the financing of the company or into its control of the companies, to encroach on the shares of the Chang-yuan investment April 2007, Chang-yuan investment has been due to the actual control of the Chen Kegen to delay the disclosure of 2005 annual report by the SFC administrative Punishment, October 14, 2008, the company includes the time as Chairman, general manager, independent director, including four persons in charge of the 2001 interim notice did not disclose the relevant transactions, 2001-2004 Annual Report and 2005 years in the report did not disclose the relevant party accounts for the payment of the letter of the violation of the law was punished.　　Chen Kegen, as one of the actual controllers of the Chang-yuan investment, is prohibited by the regulatory authorities and shall never be a senior manager of any listed company or securities business organization. Long-term, continuous violation of capital to make Chang Yuan investment vitality, due to three consecutive years of losses, the former Chang-yuan investment since June 16, 2006 suspended listing.　　After the company through a major asset restructuring to achieve profitability and return to the listing on April 14, 2008, the major shareholder changes to Mountain Forestry, the company changed its name "Fujian Fu Industrial Co., Ltd.", referred to as St-Fu, continue to trade in the market. False records whitewash Huadiao bubble finally and Changyuan investment finally successful reorganization, founded in 1984, in October 1991, the first listing of the "Shenlong" another veteran listed companies in Fujian Huadiao less fortunate.　　More than 10 years after the listing, in the continuing false record of the fake peace, the Fujian Vietnamese Huadiao "painstakingly" financial bubble finally dashed, the Beatles hat finally returned to the city. From 2004 to 20,073 years, Fujian Vietnamese Huadiao and its directors and senior executives also received the administrative penalty decision issued by the SFC two degrees. April 2004, "Fujian Shenlong Development Co., Ltd." (hereinafter called Shenlong Development) renamed Min Yue Huadiao, as the company 2001, 2002 annual report falsely increased profits and other reasons, when the Dragon Development Chairman, director and President of the Chen Ken, Chen Kegen was identified as the market ban,　　The former 3 years of the latter 5 years shall not be any listed companies and engaged in securities business institutions of senior management positions. Although the Chen brothers withdrew from the Huadiao board of Directors since then, the Exchange and guarantee activities based on false finance between the company and many affiliated companies continued.　　Public data show that the Fujian Vietnamese Huadiao by less bad debt preparation, fictitious transactions, less interest and other methods in the 2004 annual report false record profit of 48.277 million yuan.　　Market personage Analysis, the Huadiao of the Min Yue is an inevitable, beginning from 2001, the company capital chain began to tighten, but at the same time its external guarantee also increased sharply, the market guesses it is by whitewashing the report plot to carry on refinancing "circle money" in the two level market. "From the way of forgery, Fujian Yue Huadiao case is almost a violation of the ' encyclopedia '." "Case trial personnel, usually listed companies falsely recorded profits mainly through the following ways-less interest, by shortening the age of accounts receivable less to mention bad debt preparation, the use of the company's shares of frequent transactions improperly confirm investment income, fictitious contract, cash flow between the associated accounts.　　The officials said that the listed companies in the system often have complex equity relations, which has brought a lot of difficulty to the supervision Department. Probing into the regulation of affiliated companies "from the public data such as administrative penalty decisions, it can be seen that, although the ' Shenlong ' two listed companies in the case of different offences, but the perpetrators and companies involved overlap, these people and the company also has countless ties with Chen's brother." Although laterChangyuan Investment, Fujian Vietnam Huadiao Company's board of directors has not seen the name of Chen brothers, but in fact they still through the internal agent to firmly control the listed companies.　　"Industry expert Yang Chaoquan lawyer said that the capital market should be a good faith market, but sometimes also an adventurer's paradise, China's securities market, the legal system is still constantly improving, so there will inevitably be a small number of people like Chen Brothers defy the law to test the bottom line of policies and laws." The relevant person in charge of the Securities and Futures Commission introduced, through the listed companies, especially the "criminal six" after the release, the regulatory authorities to strengthen its dispatched agencies to the after the follow-up and continue tracking efforts, the major shareholders and the actual control of listed companies to occupy the problem of capital occupied greatly relieved, especially after 2006, The problems of the two listed companies are similar. "In the case of actual control, directors should strictly implement the company's duty of loyalty and diligence and perform their duties as far as possible," he said.　　The owner said. Industry scholars said that the new "securities law" to clarify the actual control of the listed companies to conduct information disclosure violations, the actual control person also should undertake the legal responsibility, this provides the supervision Department strict law enforcement to provide the better sharp weapon, but actually when the related company occupies, the financial false and so on question, in view of the correlation relation's complexity degree, Often not found in time.　　Therefore, it is worth pondering how to supervise the listed companies or the listed companies with hidden relationship. In addition, some scholars mentioned that the SFC has no jurisdiction over the problems of large shareholders occupying listed companies ' funds, and can only punish the illegal information disclosure, in view of the fact that the criminal law has a higher standard of the severity of the plot, whether it should give the SFC a certain degree of punishment should also be considered.