Changzhou Tiansheng New Materials Co., Ltd. disclosed on October 22, 2014 that its shareholders Lv Zewei, Sun Jian, Wu Haizhou, Xu Yi had signed an agreement that the shareholders’ voting right in correspondence of 23.81% share had been entrusted to Hangzhou Shuncheng Equity Investment Partnership (Limited Partnership) to execute, which made Hangzhou Shuncheng the new controlling shareholder and Zhaobing the new de facto controller of the company.
Noticing this event during the afterward examination, Shenzhen Stock Exchange (SZSE) have issued enquiry letters to the listed company and relevant parties to enquiry matters regarding the trading objectives, the law compliance, impact on the listed company, and risk. Relevant persons have also been interviewed by the SZSE.
As indicated by both parties of the agreement, the original objective of the agreement was to introduce new shareholder into the company on the premise of legal compliance, injecting quality asset to and accelerating the development of the company. They had least inclination to evade the regulation that ‘back-door listing is not allowed for the companies listed on the ChiNext Board’.
After they cautious consideration, both sides of the agreement deemed that even though the controlling shareholder’s proxy voting right was not banned in the law and regulation, it would cause harmful impact on the company’s stable operation and management. Both sides have fully understood the risk that might involved in the controlling shareholder’s proxy voting rights. In order to maintain the stable operation and management of the company, and avoid the market speculation, both sides, after considerable consultation, agreed to cancel all the clauses concerning the shareholder’s proxy voting right in the above-mentioned agreement. After the cancellation of the above-mentioned clauses in the agreement, there will be no alteration in the status of controlling shareholder and de facto controller of the company.
Relevant principal from SZSE expressed that public companies should strengthen their standard operation in compliance with the law and regulation. SZSE, while encouraging the public companies to speed up their development via acquisition and reorganization, require the public company to abide by the regulation that ‘back-door listing is not allowed for the ChiNext Board’.