Gotion High-Tech Comments on Pressure From Chinese Regulators
A provincial division of the China Securities Regulatory Commission announced on July 26 that Gotion High-Tech, a new energy vehicle battery enterprise, was discovered to have four irregularities. Accordingly, the government body’s Anhui Supervision Bureau has decided to hold administrative supervision talks with the company, and has issued warning letters to the responsible individuals, Li Zhen and Pan Wang. Gotion High-Tech issued a statement on the same day.
The firm pointed out that the content of the conversation is mainly focused on the provision for bad debts, the approval of related transactions, and the disclosure of government subsidies. The above situation occurred in and before the first half of 2021, and the company has immediately started rectification, strengthening internal control management after its discovery. Up to now, the above problems have reportedly been rectified. The provision for bad debts of the company’s accounts receivable will strictly abide by the accounting standards, and the provision will be sufficient. The information disclosure and internal approval procedures will be strictly implemented in accordance with the regulatory rules.
It is worth noting that from July 21 to July 25, Gotion High-Tech issued GDRs on the Swiss Stock Exchange, with approval both from the exchange itself and from the CSRC.
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On the morning of July 26, Gotion High-Tech announced that the final issue price of its GDRs (Global Depository Receipts) was $30 apiece. The number of GDRs issued this time is 22.8334 million, representing 114 million A shares of basic securities, and the total amount of funds raised is about $685 million. There is no over-allotment right in this issue.
Gotion High-Tech made some explanations on the issuance of GDRs in its statement in reply to the regulatory conversation, saying that the company has recently obtained the approval for GDR issuance from the CSRC and the Swiss Stock Exchange, and that it has completed the issuance and plans to list on Swiss Stock Exchange on July 28.