Promise to "repurchase as soon as possible", details of "clearance and reduction of holdings" exposed! 8 consecutive board bull shareholders apologize
As the stock price surged on the 8th consecutive board, shareholders holding over 7% quietly cleared their positions and reduced their holdings, shocking the market. The exchange quickly issued a regulatory letter on September 6th, and the China Securities Regulatory Commission immediately issued a notice of filing on September 7th.
On the evening of September 7th, Wo Le Home announced that Mr. Yu Fanyi and his concerted actions expressed sincere apologies for the illegal reduction of holdings. Yu Fanyi and his concerted action personnel promise to repurchase the excessive reduction of shares in violation of laws and regulations as soon as possible within the scope allowed by laws and regulations. If the repurchase of these shares involves profits, all of them will belong to the listed company.
It is worth noting that Yu Fanyi, the clearing and reducing shareholder of Wo Le Home, is not the first to commit this. Previously, when he raised his name to invest in Wo Le Home, Yu Fanyi was also issued a warning letter by the Jiangsu Securities Regulatory Bureau for failing to fulfill his credit obligations. At that time, he explicitly stated that he would "prevent such situations from happening again.". But after two years, he was once again suspected of violating the rules.
Details of Clearance and Reduction Exposed Shareholders Promise to Repurchase Excessively Reduced Shares
The announcement regarding the "Reply to the Shanghai Stock Exchange Regulatory Work Letter" released by Wo Le Home this evening exposed the details of the clearance and reduction of holdings in Fan Yi.
According to the announcement from our home furnishing company, from January 27, 2021 to February 1, 2021, Yu Fanyi and his concerted action persons cumulatively increased their holdings of approximately 3.5227 million shares of the company through centralized bidding. After the increase, Yu Fanyi and his concerted action persons held a total of approximately 19.029 million shares, accounting for 6.00% of the total share capital of the company at that time.
Starting from February 2021, Yu Fanyi and his concerted action parties have once again accumulated a total increase of approximately 3.4375 million shares through bidding transactions, accounting for 0.9646% of the total share capital at that time. As of June 30, 2021, the total number of shares held by Yu Fanyi and his concerted action persons was 22.4404 million shares, accounting for 6.9646% of the total share capital of the company at that time.
On April 30, 2022, Wo Le Home announced that the registered capital of the company had been reduced from 322 million yuan to 316 million yuan. The number of shares held by Fan Yi and his concerted action persons remained unchanged, and the shareholding ratio had been changed from 6.9646% to 7.1124%.
On August 28th, Wo Le Home started a strong upward trend of "8 consecutive boards". On September 5th, during the seventh consecutive day of limit up trading at Wo Le Home, Yu Fan Yi and his concerted action persons reduced their holdings by 2.9079 million shares through bidding transactions, with a reduction ratio of 0.9216%, and did not violate their information disclosure obligations.
On September 6th, Yu Fanyi and his concerted action team once again reduced their holdings through centralized bidding. Among them, Yu Fanyi reduced his holdings by 9.0534 million shares, Liu Fujuan reduced his holdings by 1.7857 million shares, Avi Management Industry reduced his holdings by 1.203 million shares, Avi Venture Capital reduced his holdings by 301400 shares, and Avi Trading reduced his holdings by 527000 shares. Yu Fanyi and his concerted action parties have cumulatively reduced their holdings by 5% of the total share capital of the company, but the relevant shareholders have not stopped trading in a timely manner in accordance with Article 63 of the Securities Law of the People's Republic of China and Article 13 of the Measures for the Administration of Takeovers of Listed Companies.
On the same day, Yu Fanyi, Avi Management, Avi Venture Capital, and Avi Trading continued to reduce their remaining holdings. Among them, Yu Fanyi continued to reduce his holdings by 10100 shares through centralized bidding, Avi Management reduced his holdings by 4.5732 million shares, Avi Venture Capital reduced his holdings by 1.6105 million shares, and Avi Trading reduced his holdings by 471000 shares. In addition, Evergrande Management purchased 4200 shares through centralized bidding.
According to the announcement from our home furnishing company, Yu Fanyi and his concerted action personnel have promised to repurchase the excessive reduction of shares in violation of regulations as soon as possible within the scope permitted by laws and regulations. If the repurchase of these shares involves profits, all of them will belong to the listed company.
This means that, as stated in the announcement, the shares to be repurchased by Yu Fanyi and his concerted action parties in the later stage will mainly be a portion of the shares that exceed a 5% proportion, with approximately 6.6606 million shares.
The China Securities Regulatory Commission has initiated an investigation
At noon on September 7, we LeHome announced that shareholders Yu Fan Yi and his persons acting in concert Liu Fujuan, Yantai Evey Pipe Industry Co., Ltd., Xizang Evey Venture Capital Co., Ltd., and Yantai Evey Trading Co., Ltd. received a notice of filing issued by the China Securities Regulatory Commission on September 7, 2023. In accordance with the Securities Law of the People's Republic of China, the Administrative Penalty Law of the People's Republic of China and other laws and regulations, the CSRC decided to file a case against the above-mentioned shareholders of the company due to their suspected excessive shareholding reduction.
I, Le Home Furnishings, stated that this filing is aimed at shareholders who hold more than 5% of the company's shares, and the company's production and operation activities will not be affected. During the investigation, Yu Fanyi and his concerted action team will actively cooperate with the investigation work of the China Securities Regulatory Commission, and strictly fulfill their information disclosure obligations in accordance with relevant laws, regulations, and regulatory requirements.
Previously, the company announced that, after verification with other shareholders, on June 30, 2023, shareholders of the company held a total of 22.4404 million shares in Fan Yi and his concerted action persons, with a shareholding ratio of 7.1124%. As of the close on September 6th, the total number of shares held by the above-mentioned concerted action persons has decreased to 4200 shares, with a shareholding ratio of 0.0013%.
This afternoon, the stock price of Wo Le Home continued to decline, hitting the limit at the end of the trading day, with a total transaction amount of 1.165 billion yuan and a turnover rate of 23.05%.
The China Securities Regulatory Commission will seriously deal with illegal reduction of holdings
The changes in the shares of shareholders of listed companies have always been a concern in the market. The China Securities Regulatory Commission has recently issued new reduction regulations, regulating the reduction behavior of controlling shareholders and actual controllers from the dimensions of breaking the rules, breaking the net, and distributing dividends. However, driven by interests, the illegal reduction behavior of shareholders of listed companies continues to be prohibited, and the "post event remedies" of the parties involved are mostly limited to apologizing for "insufficient understanding of the rules" and "misoperation".
On August 18th, the relevant person in charge of the China Securities Regulatory Commission (CSRC) stated in an interview with reporters on activating the capital market and boosting investor confidence that major shareholders, directors, supervisors, and senior executives are the "key minority" of listed companies, and have special obligations and responsibilities in the company's business development and governance operations. They should effectively protect the interests of the company and small and medium-sized shareholders. The Securities Law, Company Law, and relevant regulatory rules have clear provisions on the holding period and selling quantity of major shareholders, directors, supervisors, and senior executives. Major shareholders, directors, supervisors, and senior executives shall strictly abide by and shall not evade the reduction restrictions in any way. Recently, the China Securities Regulatory Commission has clarified the regulatory framework and eliminated potential institutional loopholes regarding the reduction of holdings by major shareholders, directors, supervisors, and senior executives through divorce, dissolution, and separation.
Next, the China Securities Regulatory Commission will continue to do a good job in reducing holdings: on the one hand, we will resolutely crack down on illegal reduction behaviors, promptly and seriously deal with behaviors such as excessive reduction, undisclosed reduction, and avoidance of restricted reduction. We will comprehensively use various means such as administrative supervision measures, administrative penalties, self-discipline measures, or restricted trading to severely punish violators, forming a deterrent and maintaining the order of the capital market; On the other hand, closely monitor the issue of shareholder reduction reflected in the market, carefully analyze and evaluate in depth, timely study and optimize the reduction rules, further regulate the reduction behavior of major shareholders, directors, supervisors, and other relevant parties, and enhance institutional constraints.
On August 27th, the China Securities Regulatory Commission (CSRC) announced that, based on full consideration of market concerns and careful study and evaluation of the share reduction system, the CSRC has made the following requirements to further regulate the reduction behavior of relevant parties: if a listed company has a situation of breaking through the stock market or breaking through the net profit, or has not received cash dividends in the past three years, and the cumulative amount of cash dividends is less than 30% of the annual net profit in the past three years, the controlling shareholder or actual controller shall not reduce their shares in the company through the secondary market. The concerted action of the controlling shareholder and actual controller shall be carried out in accordance with the above requirements; If a listed company discloses that it has no controlling shareholder or actual controller, the first largest shareholder and its actual controller shall comply with the above requirements.
At the same time, strict control should be exercised over the total amount of reduction in holdings by shareholders of other listed companies, guiding them to arrange the reduction pace reasonably according to market conditions; Encourage controlling shareholders, actual controllers, and other shareholders to promise not to reduce their holdings or extend the share lock up period.
The China Securities Regulatory Commission is urgently revising the Several Provisions on the Reduction of Shares by Shareholders, Directors, Supervisors and Senior Officials of Listed Companies, enhancing the effectiveness of the rules, refining relevant liability clauses, and increasing the crackdown on illegal reduction of shares.
