Baoneng scale is invalid! On site shareholder representative: Come and witness history... regulatory action! Direct Attack on the "Treasure Fire Controversy": Extraordinary Shareholders' Meeting Recalls Four Directors | Shareholders

In July, the scorching heat in Zhongshan kicked off the board seat battle between the Baoneng and Torch factions.

On the afternoon of July 24th, Zhongju High tech decided to hold the extraordinary shareholder meeting for the election of the board of directors as scheduled. A reporter from Securities Times · E Company saw at the shareholder meeting that shareholders need to have their faces collected and recognized when registering for entry. The venue is heavily guarded, with numerous security guards, and photography and video recording are often prohibited. On the evening of the same day, Zhongju High tech announced that the company held its first extraordinary general meeting of shareholders in 2023. Four directors recommended or associated with Baoneng, He Hua, Huang Wei, Cao Jianjun, and Zhou Yanmei, were dismissed from their positions as directors of the board of directors. Three of the four directors recommended by the Torch department were approved, namely Liang Daheng, Lin Ying, and Liu Gorui. However, another candidate for directors, Liu Gehui, unexpectedly failed to run.

Outside the venue, there was also a surge of undercurrents, with former employees claiming to be from the Baoneng department demanding salaries on site, and an independent director of Zhongju High tech stating that "the meeting did not have a speaking session for independent directors," and accepting media interviews outside the venue. During the meeting, Baoneng announced through its official website that the board of directors has approved the proposal to cancel the extraordinary shareholder meeting on July 24th. Tonight, Baoneng also issued a statement stating that the extraordinary shareholder meeting organized by Torch Group on July 24th was illegal and invalid. The original directors will continue to perform their duties.

In response, the Shanghai Stock Exchange also quickly took action and issued a regulatory work letter regarding information disclosure matters related to Zhongju High tech, involving general shareholders, controlling shareholders, and actual controllers.

Conference venue: Strict security

According to the revised plan, the first extraordinary shareholder meeting of Zhongju High tech in 2023 will be held at 2:30 pm today at the Zhongshan Torch International Convention and Exhibition Center. Zhongju High tech was originally planned to hold the event in the comprehensive building of Guangdong Meiweixian Seasoning Food Co., Ltd. at No.1 Chubang Road. A consultation desk was set up in front of the Meiweixian factory room to guide shareholders to the venue, and a notice board was placed to temporarily not receive shareholders.

A reporter from Securities Times · E Company noticed that at the Torch International Convention and Exhibition Center, security measures are strict both inside and outside the venue. Uniformed security guards can be seen everywhere in the lobby and hallways, with security guards at every entrance and exit. Fire trucks, emergency power vehicles, and police cars are also on standby at all times.

Starting from 1 pm, shareholders will be allowed to enter the venue for registration, and facial recognition will be used for registration. "I have never encountered such a situation after attending so many shareholder meetings," an investor told reporters about strict on-site security.

The entrance of the conference is particularly guarded, and entering the venue requires a detailed identity verification process. Mr. Wu, who claimed to be the representative of Northeast Securities, said that the institutions were arranged by the organizers in separate sub venue rooms and did not participate in the voting process. Representatives of the institutions present mostly believed that the Baoneng series would be eliminated.

An on-site staff member stated that this registration is mainly for institutional investors, with approximately dozens of individual shareholder investors.

In addition, multiple media outlets also conducted on-site reports at the entrance of the shareholders' meeting, paying attention to the dynamics and potential issues involved.

Entering the venue, the reporter saw that almost every row of seats had staff members wearing red cards. This meeting was presided over by Chairman Zheng Yizhao and Employee Supervisor Mo Hongli.

It should be noted that this shareholders' meeting was convened by the supervisory board of Zhongju High tech on its own. On the evening of July 7th, Zhongju High tech announced the notice that the company's supervisory board would convene an extraordinary shareholders' meeting on its own. The proposals reviewed by the shareholders' meeting mainly included the removal of four directors and the election of four new directors. At the meeting convened by the supervisory board, supervisor Song Weiyang raised objections. The meeting resolution was only confirmed by the signatures of supervisor Zheng Yizhao and supervisor Mo Hongli.

On July 18th, Zhongju High tech announced a change in the venue for the extraordinary shareholders' meeting, due to limited reception capacity at the original venue. The meeting address has been changed to the conference hall on the second floor of Zhongshan Torch International Convention and Exhibition Center, and other notices for the original extraordinary shareholders' meeting remain unchanged.

On and off the field, there are constant interludes

At the meeting venue, there is a grand theater that can accommodate a thousand people, but shareholder representatives present are scattered, with about a hundred people; The company's conference staff and security personnel are on high alert, and photography is prohibited in the venue. About 20 security guards and auxiliary police officers patrol. A shareholder representative told reporters that they have never seen a scene where security personnel are almost more than shareholders. In the past, they did not allow registration to scan their faces when attending shareholder meetings; A shareholder representative claimed to be "here to make soy sauce" to witness history.

Before the formal convening of the meeting, independent director Qin Zhihua stood up and asked if there was a speaking session for the independent director, but was not formally responded to and requested to sit down to maintain order in the venue; Subsequently, the meeting was held normally to read out proposals and vote on matters.

During this period, the host replied to three questions:

1. It used to be the board of directors, but this time it is the board of supervisors. Please introduce the differences in the convening methods?

Reply: Shareholders request to convene a general meeting of shareholders is the power granted by the company law. Shareholders holding more than 10% of the shares have the right to propose proposals to the board of directors. However, since the board of directors has no feedback within 10 days, the board of supervisors convenes a general meeting of shareholders; regarding legality, it is to ask lawyers I have shown legal opinions, which are in line with the company law and the company's articles of association. The voting procedures and results are legal and results.

2. Temporary change of address for convening shareholder meetings?

Reply: Public investors are paying close attention to this shareholders' meeting. In order to protect the safety of shareholders and ensure the smooth convening of the shareholders' meeting, they have chosen to hold it in the conference area of the Convention and Exhibition Center.

3. Does the proposal conform to the articles of association?

Response: Compliance.

Outside the venue, there were also interludes performed. At the entrance of the venue, a person claiming to be a former employee of Baoneng appeared. The man stated that he had come as a debt representative to seek compensation and protect his rights, hoping to negotiate with Baoneng related personnel. This indicates that at the time of the conference, Baoneng Company is facing some pressure and demands from creditors. "The news we received earlier was that Yao Zhenhua would come, but so far we haven't seen him appear," the man said.

On site heated discussions among shareholders

Subsequently, during the vote counting process, investors moved outside the venue and Qin Zhihua spoke in front of the crowd, stating that he was not speaking for Mr. Yao, but for 70% of the small and medium-sized shareholders; It is not suitable to hold a shareholders' meeting now, and it should be held after the lawsuit is concluded, because the current shareholders' meeting is being held by the supervisory board, which is a related party to the lawsuit; Even if a general meeting of shareholders is held, small and medium-sized shareholders should take separate votes.

In addition, Qin Zhihua said that Zhongju Hi tech is a good company, but now there is Lei, who exposed the land dispute cases more than 20 years ago, and two executives were investigated. He proposed to take responsibility from the management for many times, but failed to get an effective response; I also oppose frequent changes in management and demand that both parties negotiate and nominate candidates.

When Qin Zhihua spoke, he was accompanied by personnel wearing work permits, and there were also multiple security guards who came to request the audience to leave, or repeatedly interspersed through the audience, or requested that no video recording be allowed. A shareholder representative said, "Let him finish speaking."; Some personnel wearing work permits also refuted Qin Zhihua's viewpoint, believing that the shareholders' meeting should not be held and the company's development should not be stopped just because of ongoing litigation.

A shareholder representative from Shenzhen rushed to attend the meeting and told E company reporters that from the perspective of shareholding ratio, Baoneng Group should find it difficult to continue to hold the position. "Ten years in the east and ten years in the west," Baoneng's own financial chain is currently problematic, and its holdings are continuously being auctioned off, making it difficult for the company to trust them. Huoju Group is also difficult to say, hoping to introduce strong strategic investors.

Some shareholder investors have also expressed that they are not in favor of Baoneng, but it is not appropriate to hold a shareholder meeting now until the lawsuit is over.

Some shareholders who claimed to have held shares since 2019 expressed that it was difficult to vote this time, but ultimately checked in favor of the motion to dismiss the four Baoneng management in the voting column.

Some minority shareholders have expressed that the recent struggles between major shareholders have caused instability in people's minds, especially Baoneng, a well-known group, which has repeatedly released news that is only beneficial to itself using its official website influence, creating a chaotic impression of the company to the outside world. This has also brought great negative impacts to the brand and operation of listed companies, ultimately harming the interests of all investors, especially small and medium-sized shareholders. I hope this struggle can end as soon as possible and return to a normal and stable state. The management of the company should also be entrusted to people who understand the industry and the company for operation and management.

The on-site voting results of the meeting were originally planned to be announced at 4 o'clock, but were later informed by the staff that there would be a delay and the vote counting system was quite complex. On the evening of July 24th, Zhongju High tech announced that the company held its first extraordinary general meeting of shareholders for 2023, which passed a resolution to dismiss Ms. He Hua from her position as a director of the 10th board of directors, Mr. Huang Wei from his position as a director of the 10th board of directors, Mr. Cao Jianjun from his position as a director of the 10th board of directors, and Ms. Zhou Yanmei from her position as a director of the 10th board of directors. Mr. Liang Daheng, Ms. Lin Ying, and Mr. Liu Gorui were elected as non independent directors of the 10th Board of Directors of the company, but Mr. Liu Gehui was not elected.

According to the announcement of Zhongju High tech, the witnessing law firm for this shareholder meeting is Beijing Deheng Law Firm, and the witnessing lawyers are Zhang Chi and Ye Xiaoqian. The lawyer witnessed the conclusion and opinion that the convening and convening procedures of the company's shareholders' meeting comply with the requirements of relevant laws, administrative regulations, and normative documents such as the Company Law and the Rules for Shareholders' Meetings, and comply with the relevant provisions of the Company's Articles of Association; The qualifications of the attendees and conveners of this shareholders' meeting are legal and valid; The voting procedures and results of this shareholders' meeting are legal and valid.

Baoneng: Invalid

Just as the extraordinary general meeting of shareholders was being held in the afternoon, a resolution titled "Resolution of the 14th Meeting of the 10th Board of Directors of Zhongju High tech Industrial Co., Ltd." suddenly appeared on the official website of Baoneng Group, stating that the board meeting had been held on the same day and a proposal to cancel the extraordinary shareholders' meeting on July 24th had been passed.

According to the above announcement by Baoneng, the 14th meeting of the 10th Board of Directors of Zhongju High tech was held by communication on July 24th. The meeting was jointly convened by independent directors Li Gang, Huang Wei, and Zhou Yanmei, and chaired by Chairman He Hua. There were 9 directors who were supposed to attend, but 6 were actually present. Among them, directors Yu Jianhua and Wan Hequn, and independent directors Gan Yaoren did not reply within the specified time.

Baoneng said that the meeting considered the proposal to cancel the interim shareholders' meeting on July 24 by secret ballot. "In view of the serious violations of laws and regulations in the convening of the interim board of supervisors on July 6, the serious infringement of the listed company by the Torch Group and its concerted actors has caused serious losses and consequences, and the four proposals of the interim general meeting of shareholders on July 24, Seriously violate the" Company Law "and the" Articles of Association "and seriously hurt the foundation of the capital market" announcement content shows that according to the "Articles of Association", the general meeting of shareholders can only be held in the Zhongju High-tech Office Building. On July 24, it was announced that the change of the venue of the extraordinary general meeting of shareholders was held in the Torch Development Zone Building, which did not comply with the company's articles of association.

In addition, the above announcement states that the board of directors has approved a proposal to appoint Qin Junxue as the acting general manager: due to the resignation of the company's general manager Deng Zuming due to personal reasons, it is proposed that Qin Junxue, the deputy general manager, will act as the acting general manager until a new general manager is appointed by the board of directors.

On the evening of the 24th, Baoneng Group once again issued a statement on its official website, stating that the extraordinary shareholder meeting organized by Torch Group on July 24th was illegal and invalid. The original directors will continue to perform their duties.

Shanghai Stock Exchange issues a regulatory work letter

On July 24th, the Shanghai Stock Exchange issued a regulatory work letter regarding information disclosure matters related to Zhongju High tech, involving general shareholders, controlling shareholders, and actual controllers.

Timeline of shareholder dispute at Zhongju High tech:

On the evening of July 7th, Zhongju High tech announced that the supervisory board would convene an extraordinary shareholders' meeting on its own and plan to dismiss four directors of the "Baoneng series"

On July 12th, Zhongshan Runtian, a shareholder of the "Baoneng Group", issued a 5000 word statement, reporting that Torch Group and others were suspected of false litigation and manipulating the securities market

On the evening of July 12th, Torch Group declared that the report was an arbitrary smear, fabrication, and distortion of facts

On July 14th, Runda Nakayama once again issued a statement refuting Torch Group and raising eight consecutive questions, questioning the false transactions of that year

On the evening of July 18th, Zhongju High tech announced that Li Cuixu had resigned from his position as General Manager of the company, dismissed Zhang Bihong from his position as Deputy General Manager and Financial Director, and proposed to appoint Deng Zuming as General Manager and Kong Lingyun and Qin Junxue as Deputy General Managers

On the evening of July 19th, Zhongju High tech announced that due to personal reasons, Zou Weidong resigned from his position as Secretary of the Board of Directors and Deputy General Manager of the company

On July 20th, Runtian Nakayama announced that Yao Zhenhua was denied entry to the headquarters of Zhongju High tech for research, and the three newly hired executives have not yet completed their onboarding procedures

On July 20th, the official website of Zhongju High tech issued a statement regarding the incident of "Yao Zhenhua's investigation in the company's factory area was rejected", stating that the visitors did not make an appointment and did not present relevant identification documents

On the evening of July 21st, Zhongju High tech announced that it agreed to appoint Tian Qiu as the Secretary of the Board and Kong Lingyun as the Financial Manager, both of whom have backgrounds in the Baoneng family; Dismiss Li Jian from the position of Deputy General Manager

On the night of July 22nd, "Baoneng Series" attempted to replace the security team of Zhongju High tech but failed

On July 23rd, Zhongju High tech responded that a malicious incident occurred outside the company's factory area, in which an unidentified gang attempted to attack the factory area and disrupt the normal production and operation order of the company

On the evening of July 23rd, Zhongju High tech announced that it had received Deng Zuming's resignation report. Due to personal reasons, he resigned from the position of General Manager of the company

On July 24th, the extraordinary shareholder meeting of Zhongju High tech was held to review the proposal to dismiss four directors