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recently, according to the official website of the hong kong stock exchange limited (hereinafter referred to as the stock exchange), the stock exchange issued disciplinary actions against brilliance china automotive holdings limited (01114.hk, hereinafter referred to as brilliance china) and three former directors, making inappropriate statements and condemnations to the company's former executive director ma nina and former executive director yan bingzhe; and making a statement and condemnation of damaging investors' interests to the company's former executive director sun baowei.

image source: brilliance china announcement

the announcement shows that the statement of director unsuitability means that the hong kong stock exchange believes that ma nina and yan bingzhe are not suitable to serve as directors or senior management positions of the company or any of its subsidiaries; the statement of damage to investor interests means that the hong kong stock exchange believes that if sun baowei remains as a director of the company's board of directors, it will damage the interests of investors.

the hong kong stock exchange stated that from 2019 to 2021, several wholly-owned subsidiaries of brilliance china (including shenyang jinbei automotive industry holdings co., ltd., hereinafter referred to as jinbei auto control), under the influence of brilliance group (i.e. brilliance auto group holdings co., ltd.), provided financial assistance to brilliance group and other entities for the interests of the brilliance group and other entities, with the total amount of relevant financial assistance exceeding 53.4 billion yuan.

these include: the guarantee provided by jinbei auto control for the bank financing of brilliance group in 2020, amounting to approximately rmb 5.9 billion; the deposit pledge provided by jinbei auto control to guarantee the bank acceptance bills issued by brilliance group and an affiliate of dalian huaxia northern investment co., ltd. (dalian huaxia, together with its subsidiaries collectively referred to as dalian huaxia group) between 2019 and 2020, amounting to more than rmb 4 billion (deposit pledge); the funds transferred by the company's subsidiaries to brilliance group, dalian huaxia group and shenyang brilliance automobile co., ltd. and its subsidiaries (shenyang automobile group) between 2019 and 2021, amounting to approximately rmb 43.5 billion (fund transactions), and there was no written agreement record for the fund transactions made to brilliance group.

the stock exchange believes that the relevant directors hold senior management positions in brilliance group, and there is an obvious conflict of interest between their positions in brilliance china and brilliance group. each of them has participated in the provision of financial assistance to varying degrees, but none of them has reported the relevant financial assistance to the board of directors. the above financial assistance has caused brilliance china and its subsidiaries to make loss provisions of approximately rmb 1.9 billion due to guarantees, and to suffer losses of approximately rmb 4 billion and rmb 2.4 billion due to deposit pledges and fund transactions, respectively.

in terms of performance, in the first half of this year, brilliance china's total revenue was about 518 million yuan, a year-on-year increase of 2.01%; the profit attributable to shareholders was about 1.473 billion yuan, a year-on-year decrease of 60.65%. according to the financial report, brilliance china's main profit comes from its associated company, bmw brilliance automotive co., ltd. the financial report shows that in the first half of 2024, the associated company brought 2.734 billion yuan in performance to brilliance china.

image source: brilliance china announcement

since the bankruptcy reorganization was ruled to be accepted in november 2020, the reorganization of brilliance group has lasted for more than three years. according to previously disclosed information, the reorganization plan of brilliance group has not yet been completed. on march 15, 2024, brilliance china issued an announcement stating that 100% of the equity of brilliance group has been transferred to shenyang automobile (i.e. shenyang automobile co., ltd.) and the relevant industrial and commercial registration of the change has been completed.

after the completion of the conditional investment agreement, brilliance group has become a wholly-owned subsidiary of shenyang automobile; the actual controller of brilliance group has been changed to shenyang sasac (state-owned assets supervision and administration commission of shenyang municipal people's government); shenyang automobile indirectly holds approximately 29.99% of brilliance china's shares through its wholly-owned subsidiaries brilliance and liaoning xinrui (i.e. liaoning xinrui automobile industry development co., ltd.). shenyang automobile has become a major shareholder and related person of brilliance china.

as of the time of writing by the reporter of "daily economic news", brilliance china holdings group co., ltd. was trading at hk$3.320 per share, down 1.190%, with a hong kong stock market value of hk$16.75 billion.