April 02, 2020

Kaiyuan Instrument Family Holdings, doubts about investment

Kaiyuan Instrument, formerly known as Changsha Kaiyuan Instrument Co., Ltd. (hereinafter referred to as “Kaiyuan Limited”), is the source of Changsha County Coal Quality Computer Instrument Factory, a company highly controlled by family members. Once it is successfully listed, it will be a batch of Rich family.

On the evening of March 1, the prospectus for the initial public offering of Kaiyuan Instruments pre-disclosed on the website of the China Securities Regulatory Commission showed that Kaiyuan Instrument is a company mainly engaged in the R&D, production, and sales of coal quality inspection equipment and equipment. It is planned to issue no more than 1500 yuan. Ten million shares, 60 million shares after the issuance, are proposed to be listed on the GEM of the Shenzhen Stock Exchange. Ping An Securities is its sponsor.

However, the reporter found that there are many hidden troubles in this company. This company was initiated by 48 natural persons such as Luo Jianwen, Luo Xudong, Luo Huadong and others. Luo Jianwen holds 155.340 million shares of Kaiyuan Instrument, accounting for 34.52% of the company's total share capital, and is the actual controller of the company. Xu Dong and Luo Huadong are twin brothers and serve as vice president, director and general manager of Kaiyuan Instrument. Each of them held 10,591,100 shares of Kaiyuan Instruments, each accounting for 23.54% of the company's total share capital. Luo Jianwen and Luo Xudong, Luo Huadong and his son held a total of 81.6% of the shares of Kaiyuan Instrument. In addition, Wen Sheng is Luo Jianwen Lianxi, holding 0.21% of the company's shares. The four individuals held a total of 81.81% of the shares. The controlling share is completely in the hands of the family, and family relatives hold important positions in the company. Whether they can treat other shareholders fairly is worrying.

There is also a certain doubt that the company's capital contribution also exists. According to the prospectus description, Changsha Coal Quality was established on March 12, 1992. According to the actual situation at that time, it was linked to the Wang Xinxiang government in Changsha County as a collective enterprise. At the time of establishment of the plant, the capital contributions were all privately funded. Five natural persons including Ye Qishan, Luo Qiying, Chang Zhizhong, Chang Zhihong, and Chen Qige raised a total of 110,000 yuan, which was confirmed through capital verification. It is worth noting that the nature of the above-mentioned five contributions has changed during the preparation and listing of Kaiyuan Instruments. According to the prospectus, the above-mentioned five people issued a “confirmation letter” in 2010. Changsha’s coal quality was actually set up by Luo Jianwen in the same year. The actual investment in the establishment of the plant was Luo Jianwen’s loan to five people, and Luo’s five people. In the name of the plant, but the five people actually do not have the rights and interests of shareholders, only the amount of capital to Romania to enjoy the claims.

On February 8, 1996, the registered capital of Changsha's coal increased to 1.5 million yuan, and the source of funds for the plant's own capital accumulation. According to the prospectus, according to the “Statement of Affirmation of Property Rights” issued by Changsha County State-owned Assets Bureau in 1998, it was confirmed that the paid-in capital of Changsha coal was derived from private investment or the company’s business accumulation over the years. After the definition, the Xingsha Township government and the county’s entire civil unit did not have any investment. behavior.

In January 1999, the coal quality of Changsha was restructured into Changsha Coal Quality Computer Instrument Co., Ltd. Luo Jianwen contributed 3 million yuan, accounting for 60% of the shares; Luo Xudong and Luo Huadong each contributed 1 million yuan, each accounting for 20% of the shares.

In March 2000, Kaiyuan was established and is a homogeneous enterprise with Changsha Coal. The prospectus stated that the purpose of setting up Kaiyuan was limited because the coal quality of Changsha did not contain a company-specific trade name and did not have a degree of differentiation, which was not conducive to the future development of the company. Therefore, the company planned to change its name. However, considering that the rush of name change is likely to cause confusion in the market, it was decided to set up a new company and the old company would not terminate its business for the time being.

In 2002, Kaiyuan limited the merger of Changsha coal quality. The prospectus shows that prior to the merger, Changsha's coal accounts receivable amounted to 4,562,200 yuan, of which, Kaiyuan's limited accounts receivable amounted to 2,058,100 yuan. The limited long-term investment of Kaiyuan has a book balance of 9.4415 million yuan, which is a limited amount of cash and non-cash assets invested by Changsha Coal to Kaiyuan. The net value of land use rights is 650,000 yuan, cash is 2 million yuan, and material is 949 thousand yuan.

From this we can see that after Kaiyuan's limited establishment, the funds for Changsha's coal quality are relatively large. One possibility is that Kaiyuan's limited reality is a net shell, and the main body of the two companies is Changsha's coal quality.

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