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Liu Minxia
mllmx@msn.com
SEVERAL thousand individual investors of a Central Government-owned firm that is readying itself to become the first of its kind to leave the domestic stock market are expected to gather in Beijing on Thursday to protest against the unprecedented delisting, entertaining a hope that grassroots appeals may press regulators to halt the outgoing course of the financially troubled conglomerate.
CSC Nanjing Tanker Corp., the oil and bulk chemicals marine freight subsidiary of State-owned Sinotrans & CSC Holdings Co., has reported four consecutive years of losses. It said March 31 that its shares would have a delisting grace period of 30 trading sessions starting before April 23 and then be delisted from the Shanghai Stock Exchange.
The Shanghai exchange will make a decision within 15 trading days on whether or not to delist Nanjing Tanker, according to regulatory rules.
Nearly 150,000 individual investors of the Jiangsu Province-based firm have accused Nanjing Tanker’s top management of deliberately engineering the firm’s downfall, and they have also accused the top managers of corruption and fraudulence.
“A large number of investors decided to buy into Nanjing Tanker after seeing its encouraging annual report for 2010,” Liao Yibing, organizer of the protest and an investor holding at least 1 million Nanjing Tanker shares, told Shenzhen Daily yesterday. “But it was misleading as the report was revised a year later, saying that the firm, instead of earning a large profit, was in the red that year.”
In March 2011, Nanjing Tanker, the largest shipping company operating in China’s inland rivers by capacity, reported a net profit of 8.83 million yuan (US$1.44 million) for 2010, up 108.5 percent from a year earlier. But the firm in April 2012 restated its 2010 financial results to a loss of 18.59 million yuan, citing errors in statistics. Since then, the firm has never posted an annual profit again.
China’s securities rules provide for companies reporting two consecutive years of losses to be placed in a “special treatment” (ST) category that limits the daily trading movement of their shares to 5 percent, instead of the regular 10 percent. A third straight year of losses for these companies could result in a suspension of trading, with the risk of being delisted.
Nanjing Tanker has been carrying the inglorious ST tag since 2011 and reported a net loss of 5.9 billion yuan for 2013. Its shares were suspended from trading last May.
“The top management of Nanjing Tanker showed reluctance to help the firm stay afloat,” said Liao. Liao, together with dozens of other investors, protested in front of the Shanghai exchange last week. He issued two public letters yesterday, urging Nanjing Tanker management to withdraw its delisting application.
On Thursday, Liao said he will go with several thousand other investors to protest at the China Securities Regulatory Commission, the State-owned Assets Supervision and Administration Commission, and the Central Commission for Discipline Inspection in Beijing.
Chen Qingtao, the largest individual investor of Nanjing Tanker, said the company made improper provisions for depreciation of vessels to deliberately show a loss in the books.
Nanjing Tanker made provisions of 2.28 billion yuan for nine vessels, including two under construction, its 2013 annual reports showed.
“Nanjing Tanker might have reported a profit if it didn’t make so many provisions for the depreciation of vessels since the firm had 7.3 billion yuan in revenues for 2013, 10.22 percent more than a year ago,” Chen said in a statement.
He began to buy into Nanjing Tanker in February 2012 and spent more than 21 million yuan on 7.77 million shares.
Chen, who is said to be working at the headquarters of the United Nations, said he is willing to restructure Nanjing Tanker by making use of his resources at the United Nations if the company’s management doesn’t respond to investors’ appeals, according to Liao.
Chen could not be reached for comment yesterday.
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