Kuailu Group was sentenced to withdraw the lawsuit or completely "break up" with Shenkai for failing to pay legal fees in advance

On the evening of August 3, Shenkai announced that it had received a "Notice Letter" sent by lawyers representing natural person shareholders such as Gu Zheng, Wang Xiangwei, and Yuan Jianxin, informing the company that Shanghai Yexiang Investment Management Co., Ltd. filed a lawsuit against the equity transfer dispute. The Shanghai City Higher People's Court has recently issued a ruling confirming that the case will be handled as a withdrawal.

The outcome of the battle for control of Shenkai shares is gradually emerging, and the fate between Kuailu Group and Shenkai shares may end.

On the evening of August 3, Shenkai announced that it had received a "Notice Letter" sent by lawyers representing natural person shareholders such as Gu Zheng, Wang Xiangwei, and Yuan Jianxin, informing the company that Shanghai Yexiang Investment Management Co., Ltd. filed a lawsuit against the equity transfer dispute. The Shanghai City Higher People's Court has recently issued a ruling confirming that the case will be handled as a withdrawal.

In response, an analyst who has long observed the matter told reporters that this means that Yexiang Investment, a subsidiary of Kuailu Group, finally gave up suing natural person shareholders such as Gu Zheng, Wang Xiangwei, and Yuan Jianxin and Ningbo Huijia Investment Management Center.

It is worth mentioning that Yexiang Investment has previously transferred all of its equity in Shenkai shares to Zhejiang Junlong Asset Management Co., Ltd., and many people who have served as senior executives in Kuailu Group have also announced their departure from Shenkai shares. However, what remains unresolved is where the largest shareholder and actual controller of Shenkai shares belongs.

The above analysts believe that a series of incidents mean that Yexiang Investment may completely break up with Shenkai, and the answer from the actual controller of Shenkai will soon emerge.

Yexiang Investment withdraws the lawsuit.

In June this year, Ningbo Huijia Investment Management Center signed an "Equity Transfer Agreement" with natural person shareholders such as Gu Zheng, Wang Xiangwei, Yuan Jianxin, Gao Xiang, and Gu Bing. Ningbo Huijia Investment Management Center plans to pay a total of approximately 878 million yuan. It obtained a 15% stake in Shenkai shares. At the same time, the above-mentioned natural person shareholders and Yexiang Investment signed the "Agreement on Dismantling of Voting Rights Entrusted" to withdraw the voting rights of 15% of Shenkai shares.

However, shortly after the signing of the above agreement, Yexiang Investment denied a series of agreements signed with Ningbo Huijia and natural person shareholders of Shenkai and filed a lawsuit with the court.

Regarding this matter, in the view of Gu Bing, the above-mentioned natural person shareholder of Shenkai, the lawsuit is just a delaying tactic adopted by Yexiang Investment.

Recently, the above litigation came to fruition. Yesterday evening, Shenkai issued an announcement stating that on August 3, 2016, it received a "Notice Letter" sent by lawyers representing natural person shareholders such as Gu Zheng, Wang Xiangwei, and Yuan Jianxin, informing the company that Shanghai Yexiang Investment Management Co., Ltd. filed a lawsuit against the equity transfer dispute. In the case of the Shanghai City Higher People's Court recently issued a ruling confirming that the case will be handled as a withdrawal of the lawsuit. The ruling shows that the court filed a dispute over equity transfer between the plaintiff Shanghai Yexiang Investment Management Co., Ltd. and the defendants Ningbo Huijia Investment Management Center (Limited Partnership), Gu Zheng, Wang Xiangwei, Yuan Jianxin, Gao Xiang and Gu Bing on June 27, 2016. After the plaintiff Shanghai Yexiang Investment Management Co., Ltd. served the notice of payment of litigation fees in accordance with the law, the application for reduction, postponement and exemption was not approved and still did not pay in advance. In accordance with relevant regulations, it was ruled that "this case should be handled according to the withdrawal of the lawsuit by Shanghai Yexiang Investment Management Co., Ltd."

Since Yexiang Investment sued the above-mentioned natural person shareholders of Ningbo Huijia and Shenkai Co., Ltd. and was ruled by the court to withdraw the lawsuit, will the equity transfer agreement signed by Ningbo Huijia and Gu Zheng and other natural person shareholders continue to be fulfilled? Regarding this matter, relevant persons from the Secretarial Office of Shenkai Co., Ltd. told Securities Daily that the publicly released information should prevail.

It is worth mentioning that the equity transfer agreement signed by Ningbo Huijia and Gu Zheng and other natural person shareholders will affect the ownership of Shenkai's largest shareholder seat and actual controller.

In September last year, Yexiang Investment, a subsidiary of Kuailu Group, obtained 13.07% of Shenkai shares through agreement transfer and increased holdings, becoming the largest shareholder of the listed company.

On July 26, Shenkai received a "Notice Letter" from shareholders Yexiang Investment, Kuailu Group and Zhejiang Junlong Assets on changes in shareholders 'equity of listed companies. Through equity transfer, Junlong Assets now holds 100% equity of Yexiang Investment, and indirectly holds 47577481 shares of Shenkai Company through Yexiang Investment, accounting for 13.07% of the company's total share capital. Kuailu Group no longer holds equity in Yexiang Investment. Information such as the price of the transaction and the change in the actual controller of Yexiang Investment were not shown in the above announcement.

However, in accordance with relevant regulations, the shares of the acquired listed company held by the acquirer shall not be transferred within 12 months after the acquisition is completed.

Kuailu Group's transfer of 100% equity interest in Yexiang Investment to Zhejiang Junlong Assets attracted the attention of the Shenzhen Stock Exchange. The Shenzhen Stock Exchange required Shenkai to explain whether the equity transfer was in compliance with regulations.

The above analysts believe that in view of Yexiang Investment's withdrawal of the lawsuit, the identity of the actual controller of Shenkai shares will soon emerge.

Many senior executives resigned.

Although Shenkai has not yet explained the actual controller of the company, judging from the information released so far, Kuailu Group may completely part ways with Shenkai.

Recently, Shenkai announced the resignation of executives. Company director Zou Jianhua resigned as a company director and corresponding committees; in addition, Wang Weipeng, deputy general manager and secretary of the board of directors of the company, also submitted a written resignation report. Zou Jianhua and Wang Weipeng no longer hold any positions in listed companies. In addition, in July this year, Sun Ye, the company's director and chairman, also applied to resign due to personal reasons.

It is understood that after Yexiang Investment won the largest shareholder seat of Shenkai, Sun Ye, Zou Jianhua, Wang Weipeng and others also entered the senior management of Shenkai. According to the 2015 annual report released by Shenkai, Sun Ye was appointed as the president of Shanghai Kuailu Investment (Group) Co., Ltd.; Zou Jianhua was appointed as the capital operation center of Shanghai Kuailu Investment (Group) Co., Ltd. from January 2015 to March 2016. General manager of the domestic investment business department; Wang Weipeng was appointed as assistant to the president of Shanghai Kuailu Investment (Group) Co., Ltd. from December 2014 to October 2015.

As of August 3, the senior management of Shenkai also includes Huang Jialiu, Fang Xiaoyao and others serving as senior executives in Kuailu Group.

Editor: yvette