Ruixing Coffee’s potential plungeUCAR emergency suspension
After Ruixing Coffee’s financial fraud, Lu Zhengyao “cracked up” again.On April 6, Goldman Sachs released a report saying that Haode Investment, the family fund of Lu Xingyao, the chairman of Ruixing Coffee, had defaulted on a stock pledge loan with an amount of up to 5.A syndicate composed of lenders of US $ 1.8 billion has instructed Credit Suisse Singapore Branch, as the guarantor trustee, to exercise the lender ‘s rights against the collateral, that is, to enforce the procedures involving 76.35 million ADS.In fact, Shenzhou Car Rental, a Hong Kong-listed company in China, was downgraded by the rating agency. The new third board company, Shenzhou UCAR, has applied for a suspension of trading for up to a month because of concerns about the news order.In the final press release, Ruixing Coffee should not have responded to the event of “crowding.”The leader was accused of pledged nearly half of the shares. The report stated that there were 5 in total.1.5 billion shares of Ruixing Coffee Class B common shares and 9544 shares.50,000 shares of Class A common stock were pledged, including additional shares pledged by an entity controlled by the family trust of Qian Zhiya, CEO of Ruixing Coffee.The pledge of stocks by Ruixing Coffee’s management team is not new.In February this year, the Muddy Water Report pointed out that Ruixing Coffee co-existed nearly half of its shares as a mortgage (61 million ADS), accounting for 24% of Ruixing Coffee ‘s total shares, even exceeding Ruixing Coffee ‘s 5The total shares (51 million ADS) in the monthly IPO and the January 2020 placement.According to the report, Chairman Lu Zhengyao, CEO Qian Zhiya and Chairman Lu Zhengyao ‘s sister Sunying Wong have pledged to hold 30%, 47% and 100% of the company ‘s shares respectively.Specifically, Chairman Lu Zhengyao holds approximately 6060.60,000 shares of ADS, of which about 18.18 million shares have been pledged; CEO Qian Zhiya holds 39.06 million shares of ADS, of which about 18.26 million shares are pledged; Lu Zhengyao’s sister Wong Sunying holds about 24.61 million shares of ADS, allWas pledged.Ruixing’s prospectus did not disclose that Sunying Wong was Lu Zhengyao’s sister, but this relationship was disclosed in UCAR’s 2018 annual report.Muddy Water believes that Ruixing’s total cashed nearly half of the shares through stock pledges, while the remaining investors faced a huge risk of stock crashes.Before Ruixing Coffee landed on NASDAQ in 2019, Chairman Lu Zhengyao held a 30% stake.53%; the company founder and CEO Qian Zhiya holds 19% of the shares.68%; Li Hui holds 11 shares.90%, Liu Erhai holds 6 shares.75%.Since then, Ruixing Coffee has been issued.On January 8, Li Hui’s Dazheng Capital reduced its holdings of 38.4 million shares of Ruixing, with a shareholding ratio of 14.06% dropped to 12.15%, cash out 2.300 million US dollars, but still the largest institutional shareholder.Regarding the rumors of selling Ruixing Coffee’s shares, at the time, Liu Erhai’s Yueyue Capital issued a statement saying, “Since investing in Ruixing Coffee in 2018, Yuyue Capital and its related parties have never sold any shares of Ruixing Coffee.”At that time, Ruixing Coffee’s response to muddy water stated that Ruixing Coffee firmly denied all the allegations in the report.The report ‘s argument was flawed, the so-called evidence contained in the report had no solid factual basis, and the report was allegedly based on this unfounded fact and malicious interpretation of the incident.In addition, the report also attacked the management team, shareholders and business partners of Ruixing Coffee. This attachment is false, misleading or completely irrelevant.Shenzhou Car Rental: The ten-year market of Ruixing Coffee without stocks has also been rumored to be the capital relationship between Shenzhou Car Rental and Ruixing Coffee.On April 6, Moody’s lowered the corporate family rating and senior unsecured rating of car rental companies in China from “B1” to “B2”, and added to the downgrade watch list.Moody’s said, “The downgrade and merger downgrade watch list reflect Moody’s solution, that is, Ruixing Coffee’s statement may damage China’s car rental opportunities for funding and operations.On the morning of April 7, China Auto Rental announced that the company has not held any American depositary shares or other securities of Ruixing Coffee, and the group has not participated in any commercial transactions of Ruixing Coffee.Although Lu Zhengyao is the shareholder and chairman of Ruixing Coffee, he resigned as CEO of the company in April 2016 and changed his position as a non-executive director.Since then, it does not need to participate in the daily management of the group.Shenzhou Car Rental also explained that, overall, Mr. Liu Jian, the chief operating officer of Ruixing Coffee, has ceased to serve as the department director of the company since 2015.On the date of termination announcement, the business relationship and operation of the Group with financial institutions remained normal.As a result, after the resumption of car rental in Shenzhou today, the market opened higher, and the rate of termination of the press was once up to 35%.Hurun Research Institute: Lu Zhengyao and Qian Zhiya collectively dropped $ 1 billion. Regal Goldman Sachs said that in exercising its rights under the loan arrangement, the lender has begun to enforce the collateral, with too many people in theThe obligations under the loan arrangement include the conversion of Class B common stock of Ruixing Coffee into ADS.If all the loan pledged stocks are sold, Lu Zhengyao ‘s right to vote at Ruixing is not in conflict, but Qian Zhiya ‘s actual income and voting rights will be significantly reduced.A securities analyst told reporters that the expected merger of shareholders has a chain reaction. The current impact of the liquidation on ownership control is not significant, and the specific implementation needs to be followed.According to Dong Yizhi, a special judge of the Netizen E-Commerce Research Center and a lawyer of Shanghai Zhengce Law Firm, according to US law, providing false financial reports and deliberately committing securities fraud crimes is punishable by 10 to 25 years ‘imprisonment for individuals and companies.The fines are up to USD 5 million and USD 25 million.At the same time, the audit agency may also be involved in a crime and may face strict burden of proof.Ruixing Company, related directors and supervisors, auditing agencies and other intermediaries may also face huge class actions.The earliest is that on April 6, the Hurun Research Institute released the “Special Report on the Change of the Wealth of Global Scientists Two Months After the Epidemic”, which showed that due to financial fraud, the expectations of Ruixing Coffee Chairman Lu Zhengyao and CEO Qian Zhiya fell together.Out of a billionaire list.On April 7, S & P Global Ratings downgraded the issuer’s credit rating from B + to B- from B + to the credit watch list.Today, China ‘s new third board company, China UCAR, announced that due to the latest rumors in the public media related to the company, it may have an impact on China UCAR ‘s stock transfer price. In order to protect the interests of investors and avoid abnormal changes in the company, according toAccording to relevant regulations, upon application by the company, the company’s stocks will be suspended from April 7, 2020, and the resumption of trading will be no later than May 6, 2020.Sauna, Ye Wang Chen Weicheng Editor Xu Chao Yue Caizhou Proofreading Liu Baoqing