fireballpinballmachine| The project with an annual output of 5000 tons of glufosinate ammonium has not yet been owned? The dispute between Huifeng shares and its out-of-control subsidiary continues

On the evening of May seventeenthFireballpinballmachine, Huifeng Co. (SZ002496)Fireballpinballmachine, share price 2Fireballpinballmachine.68 yuan with a market capitalization of 40Fireballpinballmachine40 billion yuan) disclosed the reply to the inquiry letter of the 2023 annual report, in which the ownership of the "technical transformation project of the production line of 5000 tons of glyphosate raw medicine" was mentioned again, the company said it had applied for a retrial, and the verdict was uncertain.

It is worth noting that in October 2020, Huifeng Co., Ltd. packaged the above projects into a wholly-owned subsidiary Jiangsu Keli Agrochemical Co., Ltd. (hereinafter referred to as Kelinong) and transferred 51% stake in Collinon and 1% stake in Shanghai Dubai Plant Protection Co., Ltd. (hereinafter referred to as Dubai Plant Protection Co., Ltd.) to Andormai A (SZ000553, share price 6.47 yuan, market capitalization 15.07 billion yuan). This incident intensified the contradiction with the subsidiary Shijiazhuang Ruikai Chemical Co., Ltd. (hereinafter referred to as Ruikai Chemical).

In addition, on May 13, Huifeng also disclosed an arbitration announcement initiated by Andorra A.

The application for re-examination has been filed.

The Daily Business News has previously reported on the dispute over the ownership of the "technical transformation project of the 5000 tons of glyphosate production line" between Huifeng and its subsidiary Ruikai Chemical Co., Ltd. On August 9, 2022, the people's Court of Zhao County, Hebei Province sent a "Civil judgment" to Huifeng shares, and the first instance ruled that the ownership of the above-mentioned projects should be owned by Ruikai Chemical.

However, the reply revealed that Huifeng filed an appeal to the court on the dispute over Ruikai Chemical's "infringement on the interests of shareholders", which was rejected by the court. The company applied for a retrial and received a "notice of filing" served by the court in January 2024. There is uncertainty in the verdict. Based on the principle of prudence, the company disclosed the lawsuit in its 2023 annual report, which is a matter after the balance sheet date.

It is reported that the accounting firm issued reservations on Huifeng's 2023 financial report and attached an emphasis paragraph. The subject matter of the reservation is the minority stake acquisition and glyphosate project dispute between the listed company and Ruikai Chemical. As a result, the company has been issued a reservation for four consecutive years from 2020 to 2023.

Huifeng shares replied that since November 2020, Ruikai Chemical has refused to provide financial statements for various reasons, and the company has failed to communicate many times and filed a lawsuit on the grounds of shareholders' right to know. In January 2022, it received a "civil judgment" served by the court and ruled that Ruikai Chemical must provide relevant accounting reports, accounting books and other information within a specified period of time. In April 2022, he received the Civil judgment of the second instance, which upheld the judgment of first instance served by the court.

However, according to Huifeng joint-stock announcement, Ruikai Chemical provided unaudited financial statements and a list of fixed assets without parameters such as specifications and models, and the rest of the information was not provided. In addition, the assessment agency failed to conduct an on-site investigation.

Huifeng shares believes that Ruikai Chemical has stopped production in June 2021, shareholder conflicts have not yet been resolved, and some lawsuits are still underway, coupled with its environmental and safety problems and backward production processes, resulting in high production costs and little possibility of resuming production. Can not continue to operate in the future. In the case of losing control over the company, based on all the financial information it can have, the company uses the method of net fair value minus disposal expenses (asset base method) to make accounting estimates, recognizing the relevant fair value change income-62.4265 million yuan.

Accountants believe that accounting firms are unable to implement some important audit procedures, and the audit work is greatly restricted. Huifeng shares can only issue consulting reports with limited evaluation conditions on the relevant information obtained during the audit of the 2022 annual report. Therefore, it is impossible to determine whether the fair value measurement of Huifeng's investment in Ruikai Chemical Industry is accurate through other effective alternative procedures.

Huifeng shares receive notice of arbitration

On May 13, Huifeng announced that it had recently received an arbitration notice from the Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center). The Secretariat of the Shanghai International Economic and Trade Arbitration Commission confirmed the receipt on May 8 of the arbitration application documents submitted by the applicant Andomai A regarding the Equity purchase Agreement, the Supplementary Agreement to the Equity purchase Agreement and the Supplementary Agreement to the Equity purchase Agreement (II).

Huifeng shares said that since the case has not yet been heard, the impact on the company's current or post-term profits is still uncertain.

According to the announcement issued by Andomai An on May 9, according to the relevant agreement, Huifeng shares promised its subsidiary Nongyi Electronic Commerce (Beijing) Co., Ltd. and its subsidiaries (hereinafter referred to as Nongyi Network) in 2021, 2022 and 2023. Dubai Plant Protection (later renamed) The average annual gross profit (Nongyi Network business gross profit) of Andao McHuifeng (hereinafter referred to as Andao McHuifeng) should reach at least 8.6 million yuan (Nongyi Network business benchmark). If the gross profit of the Nongyi network business fails to reach the Nongyi network business benchmark, Huifeng shares shall pay the price to Andormai An according to the following formula, the amount payable by Huifeng shares (price adjustment payment) = (Nongyi Network business gross profit) × 13, and Huifeng shares shall bear all taxes and fees to be borne by the company as a result of price adjustment payment.

From 2021 to 2023, the gross profit of Andao Maihui generated by the Nongyi network business totaled 10.9071 million yuan, with an average annual gross profit of 3.6357 million yuan. Huifeng shares shall pay a price adjustment payment of 64.5358 million yuan to Andormai A.

Andormai A said that after repeated requests, as of the date of the announcement, Huifeng shares had not paid the price adjustment payment to the company. In order to safeguard the legitimate rights and interests of the company and all its shareholders, the company initiated the arbitration procedure for Huifeng shares.

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