Original title: Everbright Securities Strikes Back! Claim 4.2 billion!
China Fund News Taylor
After the thunderstorm in overseas mergers and acquisitions, Everbright Securities will fight back, claiming 4.2 billion!
Fight back!Everbright Securities takes them to court
Claim 4.2 billion!
In a sensational overseas M&A case that year, Everbright Securities stepped on the thunder of the MPS (MP&Silva Holding SA) project. After a huge loss of several billion yuan, it ushered in new progress.
Everbright Securities recently issued an announcement, disclosing the MPS matters and follow-up situation of the wholly-owned subsidiary Everbright Capital Investment Co., Ltd. (hereinafter referred to as Everbright Capital).
Shanghai Baptist Investment Consulting Partnership (Limited Partnership) (hereinafter referred to as Shanghai Baptist Fund)’s overseas project transaction entity JINXINNC. (Cayman Baptist) in the High Court of England and Wales to MPS’s original seller shareholder RICCARDO SILVA ANDREA RADRZZANI and other individuals He and the agency filed fraudulent false statements and breaches of tax commitments. The amount involved was approximately US$661 million (approximately RMB 4.2 billion).
Everbright Securities said that the company’s business operations are currently normal.
Stepping on Thunder 5.2 billion overseas mergers and acquisitions
Everbright Capital is a wholly-owned subsidiary of Everbright Securities. Its subsidiary, Everbright Baptist Investment Management (Shanghai) Co., Ltd. (hereinafter referred to as Everbright Baptist), is the executive partner of Shanghai Baptist Fund. The MPS project is an investment project of Shanghai Baptist Fund.
In 2016, Everbright Baptist and Baofeng Investment and Shanghai Qunchang launched the Baptist Fund with a fund size of 10 billion and a total maturity of 5 years.
According to Tianyan Check, Baptist Fund has a total of 14 investors, of which China Merchants Wealth invested 2.8 billion yuan, and 53.82% of the shares are the majority shareholder; Huarui Bank invested 400 million yuan through Aijian Trust; Baofeng Group invested 200 million yuan… …
In May 2016, Baptist Fund raised 5.2 billion yuan to complete the acquisition of 65% of MPS. MPS used to be the world‘s top sports media company, with business covering more than 200 countries and regions around the world, with more than 90 global event property rights, and more than 30 event rights agency partners. LeTV Sports is its largest partner in China. Against LeEco, the Storm Group at the time also aimed at the sports sector, hoping to formally enter the sports industry.
According to the information released at that time, MP&Silva was founded by three Italians. It is the world’s top sports media service company. It has 20 branches worldwide. As of June 2015, its annual turnover exceeds 600 million US dollars. Its core business is The acquisition, management and distribution of sports event copyrights cover major national teams, clubs, leagues and well-known events.
As one of the investors, Xue Feng, the CEO of Everbright Securities at the time, commented that this was “an unforgettable experience”. He said: “China has the largest number of sports fans, and the sports industry has become one of the hottest investment fields at the moment. “
However, after the merger and acquisition investment fund jointly established by Baofeng and Everbright became the owner, MP&Silva began to go downhill and collapsed across the board. Since October 2017, MP&Silva has successively lost the Serie A, English Premier League, Soviet Super League, Copa America, Copa Libertadores, South American Cup copyright, and the Arsenal Club and the European Handball Federation have also terminated their contracts with the company. At the same time, MP&Silva is also involved in a dispute with FIFA over the copyright of the World Cup in Russia.
Due to the inability to pay copyright fees, some major copyright owners terminated their contracts with MPS early and even took them to court. In October 2018, with the bankruptcy liquidation order of the British High Court, MPS became history. The investment of 5.2 billion yuan was “flooded”, and the investors encountered Waterloo.
So far, many partners of Baptist Funds have demanded compensation from the Everbright Department and Baofeng Department.
However, Baofeng Group does not protect itself. In July 2019, Feng Xin, the actual controller of Baofeng Group, was arrested. Baofeng was in deep crisis. Now not only has the listing suspended, but the owner Feng Xin has also been in jail; partners can only find Everbright Securities come to pay.
After the failed acquisition, Everbright Capital, a subsidiary of China Everbright Securities, was forced to assume huge responsibilities. The stakeholders of the priority limited partners of Baptist Funds respectively presented to the company a letter of replenishment of the difference, stamped by Everbright Capital, promising that if the priority limited partner cannot withdraw, Everbright Capital will assume the corresponding obligation of replenishing the difference. .
Subsequently, many institutions including China Merchants Bank requested Everbright Capital to make up the difference.
On August 8 last year, Everbright Securities issued an announcement on the progress of its subsidiaries’ litigation and arbitration. Its subsidiary Everbright Capital was sentenced to pay more than 3.5 billion yuan to two banks (China Merchants Bank and Ruihua).
According to the announcement, Everbright Capital, a wholly-owned subsidiary of Everbright Securities, received the “Civil Judgment” of the first instance. The Shanghai Financial Court ruled that Everbright should pay China Merchants Bank RMB 3.112 billion and the interest loss from May 6, 2019 to the date of actual settlement, and To bear part of the litigation costs, property preservation costs and other costs.
Huarui Bank, another stakeholder of the Baptist Fund’s priority partner, filed a civil lawsuit against Everbright Capital on the grounds of other contract disputes due to the “Letter of Compensation for Differences”. The Shanghai Financial Court ruled that Everbright Capital should pay an investment principal of 400 million yuan to Huarui Bank, pay the investment income from January 1, 2018 to the date of actual performance, and bear litigation fees, preservation fees, etc.
The two totaled more than 3.5 billion yuan.
Cases continue to drag down Everbright Securities’ performance
Everbright Securities suffered heavy losses in the MPS incident, which put tremendous pressure on the company’s performance. There has been a sharp drop in net profit.
The annual report shows that Everbright Securities achieved a net profit of 568 million yuan in 2019. In 2018, Everbright Securities had a net profit of 103 million, a year-on-year decrease of 96.57%. In 2017, Everbright Securities had a net profit of 3.016 billion.
Everbright Securities stated in its 2019 annual report that, based on the MPS matters and progress of its wholly-owned subsidiary, Everbright Capital, the company based on the principle of prudence, withdrew 1.611 billion yuan of estimated liabilities during the reporting period. As of the end of 2019, Everbright Securities has confirmed a total of 3.011 billion yuan in estimated liabilities.
However, the performance of Everbright Securities in the past two years is remarkable. In 2020, the company achieved a total operating income of 15.866 billion yuan, a year-on-year increase of 58%; net profit attributable to shareholders of the parent company was 2.334 billion yuan, a year-on-year increase of 311%.
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