Beijing Tianguangshi Biotechnology Co., Ltd. (hereinafter referred to as "Tianguangshi") is an innovative biopharmaceutical company focused on the research, development, and industrialization of antibody-targeted drugs. It is recognized as a national high-tech enterprise, a Beijing specialized and sophisticated "Little Giant" firm, a Beijing municipal enterprise-level scientific research and development institution, a Beijing engineering laboratory, and hosts a post-doctoral workstation and an academician expert workstation. Tianguangshi's intermediaries include CICC [Qi Yao, Wang Hui], Tianjian Certified Public Accountants [Lai Xingkai, Shen Jiaying], and Zhong Lun Law Firm [Cao Meixuan, Li Kefeng, Sun Fang].
Tianguangshi's prospectus may contain internal contradictions: it claims shareholding nominee arrangements have been cleared and ownership is clear, yet it reveals that dozens of individuals have not signed confirmations, involving former executives of state-owned enterprises. Who is upholding the diligence standards of CICC's Qi Yao and Wang Hui? The historical shareholding nominee arrangements and their cleanup process at Tianguangshi are complex, rooted in the illegal investments and transfers by multiple then-serving directors, supervisors, and senior managers of the former state-owned controlling shareholder, Hisun Pharmaceutical. Regarding the final disclosure of the nominee cleanup, Tianguangshi's documents may contain direct self-contradictions. In reality, Tianguangshi's actual controller, Li Feng, and its controlling shareholder, Huatai Junshi, may face potential litigation risks, creating a defect in the clarity of equity ownership.
In the "Major Event Tips" section of the Prospectus (Draft for Review) (page 21), Tianguangshi explicitly and absolutely states: "As of the date of this prospectus, all shares involved in historical entrusted investment relationships have been cleared. At the shareholder level of the controlling shareholder, Huatai Junshi, there are no longer any entrusted investment situations. The shares of Tianguangshi held by Huatai Junshi have clear ownership." However, the immediately following sections of the prospectus and the first round of inquiry responses disclose a completely opposite fact: "Among the principals who entrusted investments to former Huatai Junshi shareholders Luo Jufang and Xu Atang... some principals have not yet received the exit consideration and/or have not issued a confirmation that they will not raise economic compensation or other claims against Huatai Junshi, its shareholders, Tianguangshi, or its direct or indirect shareholders. As of the date of this prospectus, there are a total of 13 individuals who have received the exit consideration but have not yet confirmed, and a total of 7 individuals who have neither received the exit consideration nor confirmed. There is a possibility of disputes or litigation. The Huatai Junshi equity ratio involved in these potential disputes is 1.9347%, equivalent to approximately 0.3609% of Tianguangshi's shares."
Tianguangshi's actual controller, Li Feng, along with Wang Gang and others, previously collaborated with then-serving directors, supervisors, and senior managers of Hisun Pharmaceutical. They used natural persons Luo Jufang and Xu Atang as nominee holders to establish Shannan Huatai Junshi Investment Co., Ltd. (Huatai Junshi), thereby circumventing the prohibitions of the "Several Provisions on Integrity and Self-discipline of Leaders of State-owned Enterprises." Although the Naidong District People's Court of Shannan City, Tibet Autonomous Region, rejected the shareholder qualification confirmation lawsuits filed by Zhang Songlin, Lu Minghua, Cai Weimin, and others, the judgment effectively confirmed the existence of a legal "entrusted investment" relationship from a judicial perspective. During the 2020 STAR Market listing application, Tianguangshi asserted that the relevant shares "were not pledged or subject to any disputes." In this current Beijing Stock Exchange listing application, it has changed the description to "potential disputes." Since 21 (13+8) ultimate beneficial holders have not yet issued non-dispute confirmation documents, and 8 of them have not even received the exit consideration, this means, under the principles of the Company Law and contract law, that the 1.9347% equity in Huatai Junshi faces the risk of being subject to litigation preservation, ownership confirmation, or economic recourse at any time. Is Tianguangshi's forced declaration in the prospectus that "no entrusted investment situations exist anymore" a play on words or an ostrich-like avoidance of the truth? Do the verification opinions of CICC's Qi Yao and Wang Hui align with the disclosures? What alternative, penetrating verification procedures did Qi Yao and Wang Hui of CICC adopt for the 8 individuals who have not received the exit consideration and the 13 individuals who have not confirmed? Without obtaining non-dispute confirmation documents, what is the specific legal basis for unilaterally determining that "ownership is clear"? The related explanations are clearly unreasonable, failing to provide sufficient and appropriate evidence. Does this constitute an omission? Is there a concealment of related party relationships?
Was a building demolished before property transfer overvalued at millions as an asset contribution? Did the major shareholder willingly pay for the demolition costs of others? In the face of capital contributions, were Qi Yao and Wang Hui of CICC conducting due diligence or condoning the situation? In December 2021, Tianguangshi and one of its top ten shareholders, Betta Pharmaceuticals, jointly established the controlled subsidiary Fucheng Biotech (currently Tianguangshi holds approximately 78.71%, and Betta Pharmaceuticals holds approximately 21.29%). During the establishment and subsequent restructuring capital contribution process of this subsidiary, there may have been abnormal asset valuations and a scenario of valuation followed by destruction. This raises suspicions of falsified capital contributions and related party benefit transfers, which is puzzling.
According to the "First Round Inquiry Response" and "Second Round Inquiry Response" disclosures, in August 2022, Tianguangshi and Betta Pharmaceuticals subscribed to the new registered capital of Fucheng Biotech using Huafang Tianshi's 100% equity, and building ownership and land use rights, respectively. Betta Pharmaceuticals contributed capital in kind using the land and attached buildings located at No. 589 Hongfeng Road, Linping District, Hangzhou. The total appraised value of this real estate is 92.6622 million yuan, including a land use right appraisal value of 73.2771 million yuan and a total appraisal value of 19.385 million yuan for various buildings (including demolished and non-demolished parts). The author finds it puzzling that before Betta Pharmaceuticals transferred the ownership of this real estate to Fucheng Biotech (on November 7, 2022), buildings No. 2, No. 3, No. 4, No. 5, and No. 6 at No. 589 Hongfeng Road had already been completely demolished. The market value of these pre-demolished buildings in the asset appraisal report was as high as 11.4696 million yuan. Tianguangshi and CICC's Qi Yao and Wang Hui defended this by stating: "Because their original purpose did not meet the construction planning requirements for the new production line needed for Fucheng Biotech's business development, the demolished buildings had limited economic value to Fucheng Biotech... It was reasonable to demolish these buildings before the ownership transfer to Fucheng Biotech." Does the explanation by CICC's Qi Yao and Wang Hui violate the mandatory legal provisions of the Company Law regarding non-monetary property capital contributions, which require "appraisal and valuation, property verification, and no overvaluation or undervaluation"? Since the demolished buildings had "limited economic value to Fucheng Biotech" and were destined to be destroyed before the transfer to make way for the new large molecule biopharmaceutical production building, why was their net appraised value of 11.4696 million yuan still fully included in the paid-in capital of Fucheng Biotech when determining Betta Pharmaceuticals' capital subscription amount?
Even more perplexing, Fucheng Biotech (with Tianguangshi as the absolute controlling shareholder) not only accepted this inflated valuation but also paid 385,200 yuan of its own funds to complete the demolition and cleanup work for Betta Pharmaceuticals. Beyond the potential benefit issues in the capital contribution phase, the "Fucheng Biotech Investment Agreement" also contains puzzling one-sided special investment terms: If Fucheng Biotech fails to achieve revenue targets for three consecutive years within five years of its registration, and if a specific core management personnel (Zhang Xinfeng or PEI Ye) resigns and a satisfactory replacement acceptable to Betta Pharmaceuticals is not found within six months, Tianguangshi is required to "compensate Betta Pharmaceuticals by transferring 2.5% of Fucheng Biotech's equity at that time for free." Fucheng Biotech's current operating situation is extremely poor, with its business activities dependent on the parent company. During the reporting period (2022 to 2024), Fucheng Biotech's total assets were 789 million yuan, 886 million yuan, and 880 million yuan, respectively, but its net profits were -72.3573 million yuan, -63.0787 million yuan, and -45.7647 million yuan, accumulating total losses of over 181 million yuan over three years. Given such bleak and severely loss-making performance expectations, Tianguangshi agreed to sign a one-way, non-commercially reciprocal free equity compensation agreement. The related explanations are clearly unreasonable, failing to provide sufficient and appropriate evidence to prove the business logic and fairness of this valuation adjustment mechanism. Is this an advanced method for the major shareholder to transfer benefits to a specific institution through multi-layered nesting or subsidiaries? Are the relevant verification procedures of CICC's Qi Yao and Wang Hui deficient? Is the supporting documentation sufficient?
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