Reflection on the loss of 400million brought by Sh

Reflection on Shanghai Lvxin's acquisition of Zhejiang Demi with a loss of 400million

release date: Source: Internet editor: China Packaging Views: 313 copyright and disclaimer

core tip: the capital market has always been full of "stories". In many cases of M & A and reorganization, the two sides of the transaction have worked together to tell a perfect story and deceive shareholders from time to time. The story between Shanghai Lvxin packaging materials technology Co., Ltd. (A-share: 002565, referred to as "Shanghai Lvxin") and Zhejiang Demi Color Printing Co., Ltd. (referred to as "Zhejiang Demi") is another situation: the listed company is fooled by the acquisition target. Zhejiang Demi, the acquiree, fabricated stories and financial frauds, and lifted a stone and hit himself in the foot. The actual operator is in the most lifelong prison. Here we will introduce some of the prison of the experimental operation. Shanghai Lvxin, a listed company, blindly acquired in order to maintain performance growth. After the acquisition, it lacked necessary management and integration, which eventually led to the hollowing out of Zhejiang Demi's assets and the loss of hundreds of millions. What's more, the profit compensation agreement signed that year

[China Packaging News] the capital market has always been full of stories. In many cases of M & A and reorganization, the two sides of the transaction have worked together to tell a perfect story and deceive shareholders from time to time. However, there are still some challenging problems to be solved between Shanghai Lvxin packaging materials technology Co., Ltd. (A-share: 00) and Zhejiang Demi Color Printing Co., Ltd. (hereinafter referred to as Zhejiang Demi) through the previously introduced method to enhance the fatigue strength of metal, but it is another situation: the listed company is fooled by the acquisition target. Zhejiang Demi, the acquiree, fabricated stories and financial frauds, and lifted a stone and hit himself in the foot. The actual operator was finally in prison. Shanghai Lvxin, a listed company, blindly acquired in order to maintain performance growth. After the acquisition, it lacked necessary management and integration, which eventually led to the hollowing out of Zhejiang Demi's assets and the loss of hundreds of millions. What's more, the profit compensation agreement (BET agreement) signed that year could not be implemented at all, and the so-called M & a market value management of listed companies needed to be reconsidered

the acquiree made financial fraud, and the acquirer lost hundreds of millions

Shanghai Lvxin is the first enterprise in the global environmental protection special packaging paper segment. Zhejiang Demi is a large-scale private enterprise specializing in the production of paper containers and printing and packaging supplies. The story of both sides originated in 2013. On June 28 of that year, Shanghai Lvxin purchased 60% equity of Zhejiang Demi for 73.8 million yuan and became its largest shareholder. However, the two sides agreed that the original operators of Zhejiang Demi, Wang Bin and Wang Zhaode, who still retained 40% equity, would be responsible for the actual operation

on May 27 this year, the actual operators of Zhejiang Demi, Wang Zhaode and Wang Guoyou, were criminally detained by Tongxiang Public Security Bureau of Zhejiang Province on suspicion of duty embezzlement. Previously, on April 21, Shanghai Lvxin reported to the Tongxiang public security organ that Wang Zhaode, the actual operator of Zhejiang Demi, and others had committed illegal acts such as misappropriation of funds, occupation of positions, and loan fraud. At the same time, Shanghai Lvxin also successively filed a lawsuit with Tongxiang people's court and Jiaxing intermediate people's court, requesting to speed up the liquidation of Zhejiang Demi

why did the merger and acquisition parties finally go to court? According to the person in charge of Shanghai Lvxin, after the acquisition, in order to support the development of Zhejiang Demi, Shanghai Lvxin provided a large amount of financial support to the company, including a guarantee of about 170 million yuan and a loan of 21.23 million yuan. The purpose of supporting the development of Zhejiang Demi is to expect the actual operators of Zhejiang Demi, such as Wang Bin and Wang Zhaode, to be diligent and dutiful and operate and manage the company well. However, what surprised Shanghai Lvxin was that after signing the contract, Wang Bin, Wang Zhaode and others violated the company's internal management system, failed to fulfill their obligations of loyalty and diligence to the company, and there were serious violations and other behaviors

in order to avoid greater losses, its 2014 annual sales reached 11.7 billion euros from the end of December 2014 to 2015. In early January, the internal audit department of the investor conducted an inventory of Zhejiang Demi, confirmed the main customers and suppliers of Zhejiang Demi, and visited some customers with large accounts receivable balances and suppliers with large accounts payable balances. The results confirmed that Zhejiang Demi falsely increased its accounts receivable by 140million yuan at the end of 2014, And there is a hidden relationship between the main customers and suppliers or their upstream and downstream enterprises and the actual managers of Zhejiang Demi. Wang Bin, Wang Zhaode and others could not give a reasonable explanation for the reasons for the lack of inventory

the person in charge of Shanghai Lvxin said that in less than a year and a half after the signing, Zhejiang Demi's assets were almost emptied, causing them direct and indirect economic losses of up to 400million yuan