Announcement on the Company's Response to the Shenzhen Stock Exchange's Inquiry Letter
The company and all members of the board guarantee that the content of this announcement is true, accurate, and complete, and there are no false records, misleading statements, or significant omissions.
Shenzhen Xinguang Yuancheng Co., Ltd. (hereinafter referred to as "the Company" or "Xinguang Yuancheng") received the Shenzhen Stock Exchange's "Inquiry Letter Regarding Xinguang Yuancheng Co., Ltd." (Company Department Inquiry Letter [2022] No. 193) on April 1, 2022. The board of directors attaches great importance to this matter and actively organizes verification work. The relevant matters are reported as follows:
On the evening of April 1, 2022, the Company disclosed the "Progress Announcement on Signing the Settlement Agreement" (hereinafter referred to as "Progress Announcement"). The Company has failed to fulfill the settlement agreement signed at the end of 2021 with Fengsheng Holdings Co., Ltd., Five Seasons XVII Limited, and Jiangsu Yide Group Co., Ltd. on time, which may lead to an additional provision for bad debts and result in negative net assets at the end of 2021.
In addition, the Company disclosed the "Phase Response Announcement to the Shenzhen Stock Exchange's Inquiry Letter," "Partial Supplementary Response Announcement to the Shenzhen Stock Exchange's Inquiry Letter," and "Supplementary Response Announcement to the Shenzhen Stock Exchange's Inquiry Letter" on February 19, March 5, and April 1, 2022, respectively (hereinafter collectively referred to as "Response Announcements"). Our department expresses concern about the relevant situation and requests the Company to investigate and explain the following issues:
Issue 1:
The Progress Announcement shows that the Company has failed to recover the remaining earnest money of 56 million yuan on time, and Nanjing New City Development Co., Ltd. has 10 million shares that have not been pledged on time. Jiangsu Xinjiao Industrial Investment Co., Ltd. has not returned 30% of its equity. Please specify the specific reasons and main obstacles for the relevant parties' failure to perform on time, the potential impact on the Company's receivables recovery and financial data, the specific measures taken by the Company, and the latest progress, and fully indicate the potential risk of delisting.
Response:
- Equity Pledge: The failure to complete the pledge of 10 million shares by Nanjing New City Development Co., Ltd. is due to a debt dispute between its shareholder Jiangsu Yide Group Co., Ltd. and Jiangsu Bank, which has led to the shares being sealed by the people's court, making it impossible to complete the pledge immediately. To ensure the full realization of the Company's creditor's rights, the Company held the 46th meeting of the 4th board of directors on April 8, 2022, and approved the "Proposal on Signing the Supplementary Agreement to the Settlement Agreement." Fengsheng Holdings Co., Ltd. agreed to provide additional asset guarantees as a substitute for the aforementioned "pledge of 10 million shares of Nanjing New City Development Co., Ltd." For details, please refer to the Company's announcement "On Signing the Supplementary Agreement to the Settlement Agreement" disclosed on April 12, 2022 (Announcement No. 2022-029).
As of the date of this announcement, the registration of the real estate mortgage has been completed as agreed in the agreement, and the pledged assets have been registered under the name of the Company's legal representative, Yu Jiangwei. Nanjing New City Development Co., Ltd. has completed the pledge of 74 million shares.
According to the audit report issued by Beijing Xintuo Zixin Accounting Firm Co., Ltd. (Audit Report No. VF699 [2021]), as of June 30, 2021, the total asset book value of Nanjing New City Development Co., Ltd. was 617,227.25 million yuan, total liabilities were 616,408.46 million yuan, and total equity was 818.79 million yuan.