This is the second time Kedi Dairy has terminated the restructuring of Kedi Frozen assets. Six months after restarting the acquisition of assets from Henan Kedi Frozen Food Co., Ltd. (hereinafter referred to as "Kedi Frozen") under its controlling shareholder, Kedi Dairy (002770) disclosed on the evening of October 17 that it had terminated the restructuring again due to an investigation. At the same time, Kedi Dairy also announced that it had recently received written resignation reports from independent directors Qiu Hongsheng and Wang Liting. The two resigned from their positions as independent directors and their roles on various board committees for personal reasons, and after resignation, they will no longer hold any positions in the company. The resignations of Qiu Hongsheng and Wang Liting will result in the number of independent directors being less than one-third of the company's board members, and there will be no accounting professional among the independent directors. According to relevant regulations, the resignation reports of independent directors shall take effect only after the vacancies caused by their resignations are filled by the next independent directors. Before the resignation reports take effect, they shall continue to perform their duties in accordance with relevant laws, administrative regulations, and the company's articles of association. On April 9, 2019, Kedi Dairy announced that it planned to issue shares to purchase the 69.78% equity of Kedi Frozen held by the controlling shareholder Kedi Food Group Co., Ltd. (hereinafter referred to as "Kedi Group") and the remaining equity held by other shareholders of Kedi Frozen. After the completion of this transaction, Kedi Frozen would become a wholly-owned subsidiary of the company. Six months later, on the evening of October 17, Kedi Dairy issued an announcement stating that on that day, the company held the 16th meeting of the Third Board of Directors, reviewed and approved the "Proposal on Terminating the Major Asset Restructuring", and decided to terminate this major asset restructuring. This is the second time Kedi Dairy has terminated the restructuring of Kedi Frozen assets. In February 2018, Kedi Dairy disclosed plans for a major asset restructuring, and on May 25 of that year, the board reviewed and approved relevant proposals including the "Plan for Issuing Shares and Paying Cash to Purchase Assets and Raising Supporting Funds and Related Transactions", intending to acquire 100% equity of Kedi Frozen at a price of 1.5 billion yuan. In August 2018, the company adjusted the relevant plan under regulatory inquiry, lowering the acquisition price to 1.459 billion yuan, intending to purchase 100% equity of Kedi Frozen by issuing shares and paying cash, and raising supporting funds of 759 million yuan. The transaction counterparty promised that Kedi Frozen's net profit after deducting non-recurring gains and losses for 2018, 2019, 2020, and 2021 would be 102 million yuan, 116 million yuan, 123 million yuan, and 127 million yuan, respectively. However, after nine months of planning, the previous round of acquisition was ultimately terminated on November 24, 2018. The two attempts by Kedi Dairy to acquire assets were for one of the important assets under the major shareholder Kedi Group. Kedi Frozen was established on December 30, 2006, with a registered capital of 300 million yuan, and its controlling shareholder is Kedi Group. Kedi Frozen's main business is the research, development, production, and sales of frozen rice and flour products, frozen meat products, and other frozen products. Its main products include frozen dumplings, frozen tangyuan, frozen zongzi, frozen meatballs, sausages, etc. Regarding the termination of the major asset restructuring that Kedi Dairy had been planning for nearly a year, the regulatory authorities issued inquiry letters twice, requiring the company to explain in detail the reasons and rationality for restarting the acquisition of Kedi Frozen at an appropriate time. Regarding the reasons for the second termination of the restructuring of Kedi Frozen, Kedi Dairy stated in its announcement on the evening of the 17th that, given that during the promotion of this restructuring, the company received a notice of investigation from the Henan Securities Regulatory Bureau, and in accordance with relevant regulations such as the "Measures for the Administration of Major Asset Restructuring of Listed Companies", after carefully listening to opinions from all parties and reaching consensus with the transaction counterparty, the company plans to terminate this major asset restructuring. On August 19, 2019, Kedi Dairy announced that it had received a notice of investigation from the Henan Securities Regulatory Bureau on the 16th. On the evening of the 16th, Kedi Dairy had already announced that it was placed under investigation by the China Securities Regulatory Commission due to suspected violations of laws and regulations. As a large dairy enterprise publicly claiming to have an annual production capacity of 100,000 tons of liquid dairy products, Kedi Dairy became a hot topic of public opinion in August 2019 due to long-term arrears to many dairy farmers who came to defend their rights, and subsequently faced regulatory scrutiny. While owing money to suppliers, as of the end of the first quarter of 2019, Kedi Dairy's monetary fund balance was 1.77 billion yuan, short-term borrowings balance reached 1.188 billion yuan, and interest expenses amounted to 16.3903 million yuan, accounting for 54.67% of net profit. As of June 30, 2019, the company's monetary fund balance was still 1.753 billion yuan, and the coexistence of "high deposits and high liabilities" was also questioned by regulators. Source: Sina Finance Once adopted, tips will be paid 400-2000 yuan. China FMCG + Internet Professional New Media Committed to FMCG manufacturers' transformation and upgrading and channel digital solutions Copyright Issues | Business Cooperation | Project Consulting | Reader Submissions