Because of insider trading four years ago, the former controlling shareholder of Yuanwanggu was sentenced

On July 6, Yuanwang Valley issued an announcement stating that it had recently received a notice from the controlling shareholder Xu Yusuo that Xu Yusuo had received a "Criminal Judgment" from the Shenzhen Intermediate People's Court of Guangdong Province. Xu Yusuo was convicted of insider trading and sentenced to three years in prison, suspended for three years, and fined RMB 5.5 million.

It is not uncommon for senior executives of A-share listed companies to be suspected of insider trading, but few have actually been sentenced. The case in which Xu Yusuo was sentenced stems from insider trading in 2015. On March 26, 2015, Yuanwanggu issued a suspension announcement announcing that it was planning a major event. Xu Yusuo borrowed the account of "Liao Mousong" to buy and sell Yuanwanggu stocks and made a profit from it.

According to an administrative penalty decision released by the China Securities Regulatory Commission in January 2017, in 2014, Xu Yusuo learned about Bibliotheca Group GmbH, a leading company in the international library market, while in Singapore. On August 28, 2014, Xu Yusuo, Invengo’s secretary and investment manager made preliminary contacts with Bibliotheca Group GmbH’s shareholders to discuss the valuation and investment structure of Bibliotheca Group GmbH. On September 11, 2014, the two parties signed a confidentiality agreement. On October 23, 2014, the two parties met again, and Invengo proposed a preliminary acquisition intention, including valuation methods and investment structure, and preliminarily determined the acquisition price of 100 million euros.

On January 22, 2015, the two parties negotiated again and agreed that Invengo would draft a letter of intent for investment based on a valuation method of 10 times the EBITDA of Bibliotheca Group GmbH and a four-phase acquisition investment structure. On March 18, 2015, the two parties confirmed their investment intention and reached an agreement on the unconfirmed terms in the letter of intent. On March 25, 2015, the two parties formally signed the letter of intent, stipulating that Invengo would acquire 100% of the equity of Bibliotheca Group GmbH in four installments, with an investment amount of no less than 95.5 million euros.

The next day, Yuanwanggu issued an announcement about planning a major event, and the company's stock was suspended from trading on that day. However, less than two months later, Yuanwanggu announced that the major asset restructuring was terminated because the time was not yet fully ripe, and the company's stock resumed trading from the opening of the market on May 14, 2015.

It was during this period that Xu Yusuo engaged in insider trading. According to the administrative penalty decision of the China Securities Regulatory Commission, on February 2, 2015, Xu Yusuo controlled the account "Liao Mousong" to buy 250,000 shares of "Yuanwanggu". The IP address for placing the order was Yuanwanggu's external export IP address, and the MAC address of the computer that placed the order was in the company computer MAC address list provided by Yuanwanggu. On June 4, 2015, the account sold all the above stocks. After deducting relevant taxes and fees, the "Liao Mousong" account actually made a profit of 5.4245 million yuan from insider trading of "Yuanwanggu" during the period involved in the case.

Invengo's announcement pointed out that Xu Yusuo has not served as a director or senior executive of the company since December 2012, and the above judgment does not affect his performance of his duties as a director or senior executive of the company. At present, Invengo's production and business activities are normal and the management team is stable. It is reported that Invengo focuses on the research and development of RFID core technologies, products and solutions. The company has more than 100 self-developed RFID chips, electronic tags, readers, writers, handheld devices and other products.