Finance Association, November 5 (Reporter Wang Bin) Less than two years after the death of Zheng Yonggang, the founder of Shanshan Co., Ltd. (600884.SH), the company may face the risk of a change in control.

This evening, Shanshan Co., Ltd. announced that the company's controlling shareholder Shanshan Group Co., Ltd. (“Shanshan Group”) held about 0.43 billion shares were frozen by the Mianyang Intermediate People's Court of Sichuan Province, accounting for 54.97% of its shares and 19.08% of the company's total share capital.

Shanshan Co., Ltd. stated that the freezing and tagging of the controlling shareholder's shares will not have a significant impact on the company's production and operation, corporate governance, etc., and the controlling shareholder is actively communicating with relevant parties to reduce the frozen ratio. However, given the current high proportion of the controlling shareholders' shares that have been frozen and flagged, there may be a risk of a change in control if this portion of the shares is forced to be judicially disposed of in the future.

Shanshan Co., Ltd. stated in the 2024 interim report that after Zheng Yonggang, the company's former actual controller, dies of illness, its shares and related rights will enter the inheritance process in accordance with relevant laws and regulations. However, the company has not received any legally binding written documents or notices confirming the company's new actual controller.

According to the announcement, Shanshan Group holds 0.782 billion shares of Shanshan shares, accounting for 34.71% of the company's total share capital. Up to now, the total number of shares of Shanshan Group that have been frozen is 0.633 billion shares, accounting for 80.89% of its shares and 28.08% of the company's total share capital.

Furthermore, Shanshan Group and its co-actors, Shanshan Holdings Co., Ltd., Ningbo Pengze Trading Co., Ltd., and Ningbo Yinzhou Jielun Investment Co., Ltd., together hold about 1.138 billion shares, with a shareholding ratio of 50.51%. Currently, the total number of frozen shares is about 0.891 billion shares, accounting for 78.28% of their holdings and 39.54% of the company's total share capital.

The announcement also mentioned that in the past year, Shanshan Group had overdue debts, downgraded credit ratings for principal and debt, and major lawsuits or arbitration due to debt issues. A Financial Services Association reporter noticed that Shanshan Group issued an announcement in August of this year that the company's 11.7071 million yuan loan interest was not paid according to the repayment plan. The company is communicating and negotiating with banks to find solutions to overdue payments.

In February 2023, Zheng Yonggang, founder of Shanshan, passed away suddenly, leaving behind two A-share listed companies, Shanshan Co., Ltd., and Yongshan Lithium (603399.SH), a subsidiary of the Shanshan family. Soon, his son Zheng Ju “took over” as the new chairman of Shanshan Co., Ltd. However, since then, problems such as high percentages of pledges, tight capital chains, and poor management have been revealed one after another. On November 1, Yongshan Lithium's two equity auctions were eventually taken away by Pingtan Yongrong Zhisheng Investment Co., Ltd.

Furthermore, the performance of Shanshan Co., Ltd. has also caused investors to worry. In 2023, the first year after Zheng Ju took over, the company's operating income and net profit to mother declined by 12.13% and 71.56%, respectively. Entering 2024, the company's performance has not improved significantly. In the first three quarters of this year, the company achieved revenue of 13.284 billion yuan, down 9.69% year on year; net profit to mother was 23.2129 million yuan, down 98.07% year on year.