Guo Dongze and Guo Dongsheng, majority shareholders of Chinese domestic container operator Antong Holdings, and other senior staff have been penalised by the China Securities Regulatory Commission (CSRC) for failing to disclose lawsuits against the company.
Antong Holdings stated in a filing to the Shanghai Stock Exchange on 4 July that CSRC’s investigations showed that from February 2017 to March 2019, the Guo brothers provided unauthorised guarantees amounting to CNY633.36 million (US$90.15 million) for a number of transactions involving the company.
The provision of external guarantees resulted in around 30 lawsuits filed against Antong Holdings, seeking around CNY600 million (US$86.8 million). In May 2019, the CSRC warned Antong Holdings for giving CNY2.48 billion (US$358 million) to Guo Dongze for his personal use. Guo Dongze has made full restitution and apologised for his conduct.
At the creditors’ request, liner operator Quanzhou Ansheng and freight forwarder Quanzhou Antong, have been under court-led restructuring since December 2019. Although the Guo brothers remain shareholders of Antong Holdings, Guo Dongze held a 35.76% and Guo Dongsheng 18.56% as at 31 March 2020, they relinquished control in September 2019, following what appeared to be a government bailout.
Two state-owned entities, China Merchants Port Holdings (CMPH) and AVIC Trust, established China Merchants Antong Logistics Management Co., a joint venture with Antong. AVIC Trust also established a trust fund to finance Antong’s logistics business.
As a result of the CSRC investigation the brothers received lifetime bans from working in securities, and have been fined CNY900,000 (US$127,000) each.
Antong Holdings, founded by the brothers’ father, Guo Renjian, incurred a CNY4.37 billion (US$625.18 million) loss in 2019 as revenue halved to CNY5.05 billion (US$722.46 million). The losses continued into 2020 as Covid-19 hit demand, resulting in a CNY119.62 million (US$16.85 million) loss in Q1 2020.
Quanzhou Ansheng has a total carrying capacity of 143,678TEU, making it the second largest Chinese domestic container carrier after Zhonggu Logistics. The company operates approximately 50 container routes on China’s coast and on the Yangtze River.