The 141 Million Shares Of LETV Held By Jia Yueting Brothers Are About To Be Auctioned By The Judiciary. No One Is Interested In The Six Fold Auction

? ? ? ? Although the delisting has been completed, recently, the news that Jia Yueting's shares in LETV will be auctioned in judicial mode has attracted the attention of the capital market.

On August 12, Alibaba's official auction website showed that 121 million shares held by Jia Yueting and 20 million shares of LETV held by Jia Yueting's brother Jia Yuemin will be auctioned on September 11. It is estimated that the starting price of LETV's shares is about 1.13 yuan / share, which is lower than the closing price of LETV at 2.03 yuan / share on August 13. The 141 million shares of LETV were divided into seven auctions with a total starting price of 160 million yuan.

According to the execution ruling issued by the third intermediate people's Court of Beijing, the executors involved in the auction include Minsheng trust, Guotai Junan, Ping An Bank and Huafu securities.

However, there are few people interested in this part of the stock. At 3:00 p.m. on August 13, 21st century economic report called the relevant personnel in charge of the auction and told the reporter: "you are the second one to come to consult."

The announcement has been put up for a day, but judging from the crowd situation, as of 5:00 p.m. on August 13, except for the auction information of the top ranked bid, the number of onlookers for other objects was no more than 506, and no one signed up.

However, on May 23, two months ago, Jia Yuemin's 2657700 shares of LETV were also auctioned at Ali auction. 24 people signed up and 43 bids were received. Finally, the shares were sold at 1393200 yuan, which was 287% higher than the starting price, corresponding to 0.52 yuan per share of LETV.

"LETV as a whole is insolvent, but some of its assets still have some weak value, such as a small amount of intangible assets and some creditor's rights formed against Jia Yueting's affiliated exchange. The loss that judicial auction can recover for creditors is very limited, but it can still recover a little bit. " Pan Helin, executive director of the Digital Economy Research Institute of Central South University of Finance and law, pointed out in an interview.

Financial institutions and investors trapped

Ten years ago.

It has been more than a year since it was officially delisted from the gem on July 21, 2020. According to the latest quarterly report, as of March 31, 2021, LETV's total assets were 3.974 billion yuan, total liabilities were 21.534 billion yuan, and net assets were - 17.560 billion yuan. After a loss of 2.544 billion yuan in 2020, LETV lost another 135 million yuan in the first quarter of 2021.

I still remember when LETV was listed in 2010, LETV was still a star enterprise with no difference. Especially on April 28, 2015, with the advent of the bull market on the gem, the share price of LETV soared to 122 yuan / share, with a market value of more than 100 billion yuan, becoming the fifth Internet company with a market value of more than 100 billion yuan after batj.

One month later, the total market value of LETV rose to 152.689 billion yuan (up to 165.6 billion yuan in intraday trading), which once surpassed Vanke A at that time.

Then, with the emergence of LETV's capital chain crisis, Jia Yueting went far away from the United States, and the prosperity began to end, and the carefully planned scams were exposed one by one.

On the evening of April 12, LETV announced that Beijing Securities Regulatory Bureau imposed a total fine of 240 million yuan on the company and 241 million yuan on Jia Yueting for financial fraud for ten consecutive years from 2007 to 2016. China's securities regulatory authorities for LETV, one of the most famous fraud cases of a shares for a long time, has finally "come to a conclusion".

It is reported that the fraud of LETV can be divided into five major points. The first is the falsification of IPO and subsequent regular disclosure documents. During the past decade, LETV's revenue has been increased by 1.87 billion yuan, and its profit has been increased by 1.73 billion yuan. According to the investigation results of the Securities Regulatory Commission, LETV did not achieve profit before listing. This also means that LETV, known as "China's first profitable video website", did not meet the IPO conditions at that time. According to the relevant provisions of A-share IPO, gem needs enterprises to make profits in the last two years, and the accumulated net profit in the cycle is no less than 10 million yuan, or the latest year is profitable and the net profit is not less than 5 million yuan.

In addition, LETV did not disclose related party transactions as required, did not provide guarantee for controlling shareholders, did not truthfully disclose Jia Yueting and his related parties to fulfill their loan commitments, and the non-public offering in 2016 constituted fraudulent issuance.

Hundreds of thousands of shareholders were involved in the fraud. As of the end of the first quarter of 2021, LETV still had 189400 shareholders. Among them, Dacheng Fund, Guangfa fund and China Europe Fund are still among its top ten shareholders, holding 18.6068 million shares, 15.1866 million shares and 13.4792 million shares respectively.

Many financial institutions have also been implicated. According to incomplete statistics by reporters of the 21st century economic report, at least 13 banks, 11 securities companies and 21 public offering companies have exploded.

The four executors involved in the judicial auction are the representatives of financial institutions that have suffered losses as a result. A typical example is Minsheng trust. In 2016, LETV Zhixin, a subsidiary of letv.com, signed a trust loan contract with Minsheng trust. Minsheng trust provided LETV Zhixin with a loan no more than 1 billion yuan through trust products. Jia Yueting and LETV holdings provided unlimited joint and several liability guarantee for the loan. In addition, Jia Yueting also pledged LETV shares to Minsheng trust, Guotai Junan and other institutions.

According to relevant data, up to now, the total amount of Jia Yueting has been executed as high as 9.482 billion yuan.

Does LETV have a future?

At present, LETV has been in a state of turmoil, and there is no way to go back.

Because it involves fraudulent issuance and financial fraud, LETV faces the risk of class action by investors.

"The common procedures for the CSRC to punish the violators of the capital market are: filing and investigation - Notification of administrative penalty in advance - written decision on administrative penalty." Zang Xiaoli, a securities rights lawyer and director of Beijing Shixuan law firm, pointed out to the reporter of 21st century economic news that once the decision of administrative punishment is implemented, the damaged investors can sue to the people's court and claim for compensation.

"In view of the current economic situation of LETV and Jia Yueting, investors are worried about the ability to pay, so they can not rule out that many executives who have been punished will be listed as defendants, as well as intermediaries, who may be chased in later. After all, without the help of these executives and intermediaries, Jia Yueting alone could not have done such a big fraud. For ten years in a row, it has also set a new record of counterfeiting by listed companies. " Zang Xiaoli said.

In addition, LETV's ability to continue as a going concern is also questionable. In 2020 and the first quarter of 2021, LETV has continued to suffer losses due to the relatively high financing costs of the current year for the liabilities of financial and non-financial institutions generated by the company in previous years, the provision for bad debts of long-term receivables and the provision for impairment of long-term assets, as well as the continuous loss of external illegal guarantee.

As of March 31, 2021, notes payable and accounts payable within the scope of LETV's consolidated statements amounted to 2.979 billion yuan, mainly due to the arrears of suppliers and service providers. The company has been making continuous efforts to negotiate with creditors such as suppliers on debt extension and repayment plan, so as to create conditions for the company's production and operation, but the progress is still unclear.

LETV also disclosed that since 2016, the company has formed a large number of related receivables and prepayments through operating business such as selling goods and providing services to related parties controlled by Jia Yueting and prepaid expenses. As of March 31, 2021, the debt balance of major shareholders and their actual control enterprises to the merger scope of listed companies has reached about 1.86 billion yuan.

According to LETV, the company's handling of debt problems with major shareholders and their related parties is in a state of stagnation. The current board of directors and management of the company have to continue to face many historical problems that can not be solved. At the same time, they are faced with a large number of debt defaults caused by extremely tight cash flow, and then passively respond to many lawsuits and judgments that cannot be executed in a short period of time, The above problems are directly related to the future survival and development of the company.

However, in sharp contrast to LETV's difficult situation, after entering the new third board, LETV's share price did not fall but rose, especially after Faraday, another enterprise controlled by Jia Yueting, announced the listing of American shares in the future.

Wind data shows that since February 2021, LETV's share price has risen by 968.42%. As of August 13, the total market value of LETV has reached 8.099 billion yuan, and the closing price is 2.03 yuan / share, 11 times higher than the delisting price of 0.18 yuan / share in a shares.

However, what makes investors uneasy is that the performance of Faraday's stock price has not been optimistic since it was listed in the future. As of August 12, American Eastern time, the future closing price of Faraday was only 11.36 USD / ads, which was 21.30% lower than the issue price of 13.78 USD / ads.

"There is no connection between Faraday's future and letv.com, but there are also some connections. Jia Yueting still has debts for LETV. Through Faraday's future listing, if it succeeds, Jia Yueting may get funds to cash LETV's debt. Although this is a weak possibility, it is not unreasonable for the capital market to reflect on the share price. It's just that Faraday's future is far from success. Different from A-shares, American shares have almost no threshold for listing. If there is no real vehicle sales, Faraday will probably repeat LETV's past in the future. " Pan and Lin said.

?