Tongce Medical: Lu Jianming was fined one million for not informing non-operating capital transactions of related parties
On December 23, Tongce Medical issued an announcement regarding the actual controller receiving the “Administrative Penalty Decision”.
The “Administrative Punishment Decision Letter” stated that in accordance with the relevant provisions of the “Securities Law of the People’s Republic of China” (hereinfollowing referred to as the “Securities Law”), our bureau investigated and tried Lv Jianming’s violations of information disclosure, and notified the parties in accordance with the law The facts, reasons and basis of the administrative punishment and the rights enjoyed by the parties in accordance with the law, the parties did not submit statements, defense opinions, and did not request a hearing. The case has now been investigated and the trial is over.
After investigation, Lu Jianming had the following illegal facts:
Lv Jianming is the actual controller of Tongce Medical. According to Article 62 of the “Administrative Measures for Information Disclosure of Listed Companies”, other entities controlled by Lv Jianming are related persons of Tongce Medical. Non-operating capital transactions constitute connected transactions.
On September 29, 2021, the board of directors of Tongce Medical reviewed and approved the “Proposal on Participating in Fund Investment and Related Transactions with the Equity of Maternal and Child Subsidiaries” (hereinfollowing referred to as the “Proposal”). Co., Ltd. (hereinfollowing referred to as Tongce Maternity and Children) participates in Zhejiang Tongce No. 1 Investment Partnership (Limited Partnership) (hereinfollowing referred to as No. 1 Fund). Fund One is actually controlled by Lu Jianming.
On September 30, 2021, Tongce Medical issued the “Announcement on Participating in Fund Investment and Related Transactions with the Equity of Maternity and Children’s Subsidiaries”, disclosing that it will contribute 143,267,900 yuan in currency in the same proportion phase by phase, accounting for 286,536 of the capital contribution of the No. 1 Fund %, No. 1 Fund acquired the equity of Tongce Maternity and Children at the same price, realizing the transaction essence of replacing the equity of the subsidiary with 28.6536% of the equity of No. 1 Fund.
On October 18, 2021, Tongce Medical’s general meeting of shareholders reviewed and approved the “Proposal”. On October 19, 2021, Tongce Medical paid a capital contribution of 143.2679 million yuan to the No. 1 Fund. On the same day, No. 1 Fund transferred 143.2 million yuan to other entities controlled by Lu Jianming, and the funds were transferred through multiple channels and finally mainly used for bank repayments. On December 30, 2021, Fund One paid 143.2679 million yuan to Tongce Medical for the equity transfer of the acquisition of Tongce Maternity and Children.
During the above process, Tongce Medical’s contribution of RMB 143.2 million to the No. 1 Fund was used to repay the bank by other entities controlled by the actual controller Lv Jianming from October 19 to December 30, 2021, constituting a related party Non-operating capital transactions fall within the major events specified in paragraph 1 and item 3 of paragraph 2 of Article 80 of the Securities Law. As the actual controller of Tongce Medical, Lv Jianming organized and arranged the transfer of relevant funds, but failed to inform the company of the relevant situation in a timely manner, resulting in the company’s failure to perform its information disclosure obligations in a timely manner.
Lv Jianming’s above-mentioned behavior violated the provisions of Article 80, paragraph 3 of the Securities Law, and constituted “the issuer’s controlling shareholder, actual controller organization, instigating to engage in the above-mentioned illegal acts, or concealing relevant matters leading to the occurrence of the above-mentioned circumstances”.
According to the facts, nature, circumstances and degree of social harm of the party’s illegal acts, and in accordance with the provisions of Article 197, Paragraph 1 of the “Securities Law”, our bureau decided to impose a fine of 1 million yuan on Lu Jianming.
