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over the past half month, the conflict between the new and old management of the listed company gengxing co., ltd. (600753.sh) has continued to intensify. after the incident of snatching the official seal, the impact of the poor handover spread to the company's business management and ordinary employees. some middle and senior managers were dismissed and employees' wages were not paid on time.

on september 13, a former executive of gengxing co., ltd. revealed to china business news that the august wages of employees have not been paid on time, and the company is still negotiating to resolve the issue. on september 12, the reporter learned from the labor and social security department of meilong town, minhang district, shanghai that gengxing co., ltd. did not pay employees' wages on time, and had a discussion with the company's new management to mediate the matter. because the company is still negotiating internally, it is temporarily unable to determine the time for subsequent wage payment.

regarding the reason why employees' wages could not be paid on time, the company's new general manager jiang binbin said in an interview with caixin that since the finance department has not yet completed the handover of important items such as bank u-shiels and certificates, the new management has no control over the finances and therefore cannot pay wages.

the work location of gengxing co., ltd. was also "split into two." the day after the "seal grabbing" incident, the company's new general manager and others were stopped outside the company. after that, gengxing co., ltd. announced the change of the new office location and investor contact number. the new management required employees to go to the new address to punch in and work. it is understood that there are about 30 employees involved, and nearly two-thirds of the employees have gone to the new address. some middle and senior managers who stayed at the original office have received termination notices.

the "major change" in the management, the poor handover of official seals and licenses, and the passive involvement of employees in the turmoil have also greatly affected the business of gengxing shares, which is currently basically at a standstill. in addition, the shareholder meeting resolution on the appointment and removal of new and old board members was challenged by the second largest shareholder in a lawsuit, and the case is still being accepted.

management clashes affect employees

the confrontation between the new and old management of gengxing co., ltd. has been going on for several months. the conflict over the change of management and the handover of official seals and licenses occurred at a time when the company was approaching the date for paying employees' salaries.

according to lin yu (pseudonym), a former executive of gengxing co., ltd., after the handover conflict, the former executive in charge of finance had communicated with the new management on the payment of employee wages on september 4 and put forward a proposal. currently, the two sides are still negotiating.

it is understood that the company's former senior executive in charge of finance said that he had begun to arrange the september 10 employee wages, social security provident fund, and the 2024 mid-autumn festival, national day, and third-quarter employee birthday benefits on august 25. on the evening of august 28, the company's official seal snatching incident occurred, and the executive was notified of his removal from office that night. afterwards, the company's new chairman requested that the company's finances be frozen. therefore, the former executive said that he no longer had the authority to handle the timely payment of august employee wages and fund allocation.

the former senior financial executive of gengxing co., ltd. mentioned that considering the new management's proposal to remit funds to multiple subsidiaries, the funds might be misappropriated without reason. in order to dispel the major shareholder's concerns about the safety of funds, the company called on colleagues to jointly propose a proposal to the human resources department and the new management regarding the payment of august wages. the salary portion would be paid directly by the major shareholder zhejiang haixin on behalf of shanghai gengxing energy co., ltd. and other four subsidiaries; the social security provident fund and personal tax portion would be remitted by zhejiang haixin into the social security provident fund accounts of relevant companies.

in this regard, jiang binbin claimed that some former senior managers and relevant persons in charge set up artificial obstacles and refused to cooperate in the transfer of the subsidiary's official seal, which resulted in the delay in the smooth completion of the handover work, seriously affecting the collection and payment of funds. therefore, relevant personnel were required to hand over work and materials at the designated office location in a timely manner to avoid adverse effects on employee salaries, social security provident funds and related benefits. the above-mentioned former financial executive said that he received an office address statement issued by gengxing shares and clocked in at the designated location every day. no one communicated with him about the compensation plan for dismissal and the work handover arrangement.

on september 10, the reporter from china business news asked the former senior executives of gengxing shares about the progress of salary payment. lin yu said that the employees' salaries have not been paid yet, and the employees received a notice of delayed salary payment the previous night. the notice stated that because some employees did not report to work as required and have not yet handled the transfer of important items such as bank u shields, the current fund balance of the listed company and its subsidiaries is unclear, and the fund income and expenditure business cannot be carried out. the payment of employee salaries and social security provident funds in august will be affected. in addition, the compliance and feasibility of alternative solutions such as salary payment still need to be demonstrated, so there is a possibility that employee salaries and social security provident funds will be delayed.

a staff member of the labor and social security department of meilong town, minhang district, shanghai stated that according to the labor contract, the company must pay employees' wages on time. at present, gengxing co., ltd. has not paid employees' wages on time in august. if the company's employees are unwilling to wait for internal negotiations, they can file a case with the minhang district labor supervision and law enforcement brigade or apply for labor arbitration.

several mid- and senior-level managers were fired

in addition to the failure to pay wages on time, where to clock in for work is also a problem that employees of gengxing co., ltd. have recently encountered. some managers have been terminated for not working at the new address.

on september 2, gengxing co., ltd. announced that the company's office address and investor contact number had changed, and the office address was changed from the original zhonggeng global creative center to hongqiao 1819 office building, no. 1819 wuzhong road, minhang district. after the address change, the new management required employees to clock in at the new address.

according to lin yu, the company's employees had previously received an office address notice with an official seal issued by shanghai gengxing energy co., ltd., a subsidiary of gengxing holdings, requiring all employees who have signed labor contracts with the company to clock in and out at the zhonggeng global creative center.

"many employees did not go to the new address to work on the first day, but in order not to make things difficult for the employees, the grassroots employees of each department were asked to go there the next day, while the middle and senior management staff remained in the original office." lin yu said that on the one hand, everyone did receive two notices and did not know where to go, so the employees were in a dilemma; on the other hand, all the core assets of the listed company, such as equipment, business contracts, financial vouchers, etc., were still in the original office location, and it was necessary for the managers to stay here to take care of them. if important information was lost due to their departure, they could not bear the responsibility.

it is understood that on the evening of september 5, some of the company's managers received a no-fault termination notice from the new management for not going to the new designated location to work, and were required to complete the work handover and resignation procedures before the next day. these included the company's core position managers such as the general manager of the strategic integration center, the director of the financial center, the director of the supply chain business, and the director of the data technology center.

when china business news asked jiang binbin about the situation, he said that a batch of termination notices were indeed sent out on that day, which were targeted at middle-level managers. the company had previously announced the change of its new office address and required employees to clock in at the new address. the above-mentioned personnel had not been there for three consecutive days, and during this period they were also given a time-limited report to work notice, and familiar employees were asked to persuade them, but they still ignored it, so the labor relationship of the relevant personnel had to be terminated.

the former general manager of gengxing shares told china business news that since the company's equity was auctioned off this year, a large number of employees have been dismissed or resigned on their own. as of now, there are only more than 30 employees left in the company. according to gengxing shares' 2023 annual report, the company had 127 employees at the end of the reporting period, a decrease of nearly 100 people.

the two sides of the "official seal snatch" have different opinions

whether it is the late payment of employees' wages or the termination of contracts of middle and senior management, the core of the dispute is still the contradictions in the replacement of old and new management, company seals, licenses and certificates, and work handover.

in march this year, zhejiang haixin energy co., ltd. (hereinafter referred to as "zhejiang haixin") invested nearly 400 million yuan to acquire 24.1% of gengxing shares through judicial auction and became its new controlling shareholder. in june, zhejiang haixin planned to reorganize the company's board of directors and dismiss the original management team, which was opposed by the original management.

on july 31, zhejiang haixin held its own shareholders meeting and approved the proposal to remove the original board members and elect new directors. on august 28, gengxing co., ltd. held its eighth board of directors and dismissed the company's former general manager, secretary and deputy general manager. that night, the new and old management teams fought over the official seal.

however, the two sides still have different opinions on the snatch of the company seal. tang yonglu, the former general manager of gengxing co., ltd., told china business news that the new management did not mention the handover at the board meeting that day. after the meeting, they surrounded the company's employees and forced the human resources, finance and other departments to provide information. they also asked the administrative department to show them the company seal and certificates. after about three hours of viewing, they called a group of outsiders to snatch the company seal and certificates. in order to prevent the other party from forcibly taking the company seal out of the company, the two sides scrambled.

lin yu also said that after the meeting that day, the new management proposed a handover request, and the original management said that the handover of listed company assets requires a handover list, and there must be a clear handover person, receiver, and supervisor, and both parties must conduct a formal handover. therefore, that night, the original management said that they would not hand over the assets for the time being, and the new management proposed to check the official seal and information first. later, a group of unfamiliar faces came from outside and snatched two boxes of information from the employee who kept the official seal. when the security personnel were notified, they failed to stop them. later, the original management called the police, and the snatching was stopped only after the police stopped them.

jiang binbin said that after the board meeting ended that day, he asked the former general manager to hand over the company, but the general manager refused due to poor health and said he would come back later to hand over the company. the other two executives were on vacation and were not in the company. later, he asked the seal administrator to take out the seals for inventory and confirmation. if the inventory was correct, he could come back later to hand over the seals.

"during the inventory process, i found that the official seals of the listed company and a major business company were gone. i asked why the official seals were gone and who they were handed over to, but the official seal administrator could not answer. as the new management, i asked him to hand over the other official seals to me for better preservation, so that when i hand over the seals in two days, there won't be any official seals left." jiang binbin said that he also signed the handover list as the general manager. regarding the "group of outsiders" mentioned above, he said they were security guards called by the other party to prevent them from handing over.

behind this fight over the official seal is the fact that the two sides failed to reach an agreement on their demands during the replacement of the old and new management. lin yu said that after the change of the company's controlling shareholder, they also knew that there would be a replacement of senior executives, but hoped that the two sides could have a smooth handover and form a plan for the work arrangements of the original management staff after they were dismissed and how to compensate employees if they terminated their contracts. however, the new management has been ignoring the demands of the original management from the dismissal of the original executives to the request for a work handover, and has not put forward any relevant plans.

jiang binbin said that the original management members were obviously delaying the handover, and some executives deliberately took long vacations to avoid the handover. in addition to the aforementioned termination of the employee due to failure to report to work as required, before this, the new management only dismissed the original management from their positions, did not terminate the labor contract, and did not involve employee compensation issues. in addition, the outgoing party should provide the successor with a handover list, the scope of work, etc. if they do not cooperate with the handover or violate the company's regulations, they will be dealt with in other ways according to the labor law or company regulations.

the second largest shareholder "joined the war" and sued to revoke the resolution of the shareholders' meeting

the original senior management team also raised questions about whether the new management's personnel appointment and dismissal procedures were compliant and whether the successor employees had the corresponding business capabilities.

china business news interviewed legal affairs, lawyers and other professionals and learned that in order to clarify who is right and who is wrong in the above-mentioned conflicts, it is necessary to return to whether the procedures for removing the company's old management and electing new management are compliant.

lawyer xu feng, director of shanghai jiucheng law firm, believes that changes in the management of listed companies may involve the protection of small and medium-sized shareholders and cannot be replaced at will. they must follow the basic principles of corporate governance and be carried out in accordance with statutory requirements and procedures stipulated in the company's articles of association.

according to the announcement of gengxing shares, zhejiang haixin convened the third extraordinary shareholders' meeting of gengxing shares on july 31. the number of voting shares held by shareholders attending the meeting accounted for 50.28% of the total number of voting shares of the company. on that day, only 2 of the original 9 directors of gengxing shares attended, and only 1 of the original 3 supervisors attended. this shareholders' meeting passed the proposal to remove the former chairman liang yanfeng, the former general manager tang yonglu and others from their positions as directors, and to elect jiang binbin, ji jinhua and others to the board of directors.

however, after the third extraordinary general meeting of shareholders, on august 16, the second largest shareholder, fujian ruishan technology co., ltd. (hereinafter referred to as "fujian ruishan"), took gengxing shares to court, requesting the court to order the revocation of the resolution made at the above-mentioned extraordinary general meeting of shareholders.

fujian ruishan claimed that gengxing shares had seriously violated the law and the company's articles of association in the process of holding the shareholders' meeting involved in the case and making resolutions, including that the proposal to elect relevant directors in the shareholders' meeting involved in the case was premised on the proposal to remove relevant directors being voted through, which objectively led to the inability to implement the cumulative voting system for the proposal to elect directors. in addition, the shareholders' meeting involved in the case violated necessary procedural regulations in the process of electing independent directors, and the content of the resolution violated the provisions of the company's articles of association.

"the resolution of the shareholders' meeting in the case dismissed the company's directors and supervisors without reason, and nominated director candidates and supervisor candidates who had not participated in the company's production and operation in the early stage. it is not conducive to the stability of the company's business management and the continuity of decision-making, and is not conducive to the company's sustainable development. at the same time, it may harm the interests of all shareholders, especially small and medium-sized investors." fujian ruishan said.

gengxing co., ltd. stated that the company conducted a self-examination on the above-mentioned matters involved in the lawsuit and believed that the convening and holding procedures of the company's third extraordinary general meeting of shareholders in 2024 were legal, the qualifications of the attendees and the convener were legal and valid, the voting procedures and voting results were legal and valid, and there were no violations. fujian ruishan's behavior constituted an abuse of litigation rights.

the case in question is still being accepted. according to public information, the case will be heard in court on september 20.