The application for reconsideration of Xiwang Food Lending Dispute was rejected again

Xiwang Food (000639.SZ) has recently been a bit annoyed, not only trying to reverse the decline in performance, but also facing a case of non-governmental lending disputes that are constantly being solved.

On December 17, the company announced that it had recently received an execution ruling from the Jinhua Intermediate People's Court of Zhejiang Province (hereinafter referred to as "Jinhua Intermediate Court"): the company's application for reconsideration was rejected.

In fact, the private lending dispute has lasted for more than three years. According to the announcement, because the executed persons, Zhejiang Jinde Valve Co., Ltd., Ningbo Dongyuan Pipe Co., Ltd. and Quzhou Jinde Plastic Pipe Co., Ltd., can not fulfill the obligations determined by the effective legal documents, the applicant Wang Ge applied for additional third person Hongyuan Group and Xiwang Food as the executed persons.

The People's Court of Wucheng District of Jinhua City (hereinafter referred to as "the People's Court of Wucheng District") held that Hongyuan Group had evaded the registered capital when it was a shareholder of Jinde Valve, and Xiwang Food was the successor of the equity of Jinde Valve held by Hongyuan Group. Therefore, according to the relevant provisions, both sides had the responsibility of liquidating debts and joint and several liquidation.

According to the First Financial Daily, Xiwang Food raised an objection to the execution of the ruling of the People's Court of Wucheng District, which was rejected on June 27, 2014. Subsequently, Xiwang Food supplemented relevant evidence to prove that Hongyuan Group did not constitute the withdrawal of registered funds and that the people's court of Wucheng District added it as the executed person without factual and legal basis, so it applied to the Jinhua Central Court for reconsideration and requested that the above ruling be revoked.

Now, after nearly half a year of acceptance, the Jinhua Central Court has made the above execution ruling, and the application for reconsideration of Xiwang Food is still rejected.

"In the absence of any factual and legal basis, the two courts forcibly added Xiwang Food as the executed person of an execution case unrelated to the company." As Xiwang Food said in the announcement, according to the execution ruling of the People's Court of Wucheng District, the company will be jointly and severally liable for the debt settlement of Wang Ge's 1235.49.76 million yuan in the range of 20 million yuan.

Xiwang Food said that the company will take all legal means to continue to appeal to the relevant departments.

Compared with the loan dispute, Xiwang Food's continued decline in performance this year also makes the company very anxious. According to the company's quarterly report in 2014, from January to September, the company realized revenue of 1.359 billion yuan, down 24.14% year-on-year; the net profit of shareholders belonging to listed companies was 93.0896 million yuan, down 26.96% year-on-year.

As of September 30, 2014, the net cash flow generated by Xiwang's food business activities was 20.844 million yuan, down 83.13% from the same period last year. Xiwang Group holds 41.96%, but 88.6% of its shares are pledged.

However, this thirst for funds is expected to be resolved soon. The company recently announced that the application materials submitted by the company for administrative license of non-public issuance of shares were accepted by the SFC, but whether they could be approved remains uncertain.

According to the fixed increase plan disclosed by Xiwang Food in August this year, the company intends to issue 47.2 million shares in private with a total amount of 600 million yuan (including issuance fees), which will be used to supplement liquidity, and carry out the construction of marketing centers and marketing networks, special marketing investment in Xiwang fresh embryo corn germ oil, olive corn oil and other products, expand new oils, construction and research and development. Heart and increase R&D investment and e-commerce platform construction.

According to Qilu Securities Research and Report, Xiwang Food began to sort out its dealer system this year. There was some confusion in the process of handover between new and old dealers. The decline in Shandong market was more obvious. From the distribution situation of dealers, the decline was the most serious in July, narrowed gradually in August and September, and began to grow slightly in October. However, the establishment of the trend still needs further observation and tracking.

"Looking forward to the fourth quarter, sales growth is expected to be better than the third quarter, or even expected to be flat, but due to the growth of new product store costs, net profit growth is difficult to improve." Qilu Securities said that in view of this year's clearance of the channel backlog inventory, new products have been launched one after another, to 2015 is still relatively optimistic, revenue and profits will be improved.