Meishan Jun claims to have sued A-share companies for over 430 million yuan! Lost the first trial, still trapped after 10 years of investment

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Well-known private equity fund, suing A-share companies for over 430 million yuan! Lost in the first trial, still trapped after 10 years of investment

Spending nearly 600 million yuan to participate in Shangshi Development (600748) private placement, but severely trapped for many years, Junzheng (Ningbo Meishan Free Trade Port Area) equity investment (hereinafter referred to as “Meishan Junzheng”) is quite frustrated. During this period, the listed company was fined for information disclosure violations, which temporarily increased Meishan Junzheng’s unrealized losses. To recover losses, Meishan Junzheng filed a lawsuit, claiming over 430 million yuan from the listed company. According to the latest developments, Meishan Junzheng’s initial attempt was unsuccessful.

On the evening of April 3, Shangshi Development disclosed that the company recently received the “Civil Judgment” delivered by the Shanghai Financial Court, which held that the plaintiff (Meishan Junzheng)’s investment decision and the alleged false statements in the case did not have a causal relationship, and therefore had no right to demand compensation from the defendant (Shangshi Development) for its investment losses. The court’s first-instance judgment: dismissing all of Meishan Junzheng’s claims; case acceptance fee of 2.2001 million yuan to be borne by Meishan Junzheng.

Qichacha shows that Meishan Junzheng is managed by Junzheng Capital as the executive general partner; according to the China Securities Investment Fund Industry Association, the actual controller of Junzheng Capital is Guotai Junan Investment Management Co., Ltd.

Securities Times·e Company reporter notes that this is a ten-year-long grievance and entanglement.

Participated in private placement, suffered losses, and sued for compensation

In September 2024, Meishan Junzheng initiated a lawsuit requesting the court to order Shangshi Development to compensate for its principal investment loss and interest totaling 801 million yuan, and to buy back its holdings of Shangshi Development shares, etc.

Meishan Junzheng pointed out that in 2015, it signed the “Share Subscription Contract for Non-public Issuance of Shares” and related supplementary agreements with Shangshi Development. One of the targets of this private placement project was Shanghai Shangshi Longchuang Intelligent Technology Co., Ltd. (the original controlling subsidiary of Shangshi Development, hereinafter “Shangshi Longchuang”). Meishan Junzheng believes that, according to relevant penalty documents, Shangshi Development failed to truthfully disclose the issuance information and should bear the responsibility for the false disclosure that caused its actual losses.

During the litigation process, Meishan Junzheng adjusted the cause of action to a dispute over securities false statements, changing its claim to demand: Shangshi Development compensate for its investment losses caused by false statements of 431 million yuan, among others.

In response, the listed company put forward multiple reasons to rebut. The company believes that, as a professional investor, Meishan Junzheng should be lawfully recognized as not relying on the case-related information to make investment decisions. The “Profit Forecast Report” of Longchuang Energy-saving (the predecessor of Shangshi Longchuang) is predictive information and does not constitute false statements. The contractual behavior of Meishan Junzheng occurred before the disclosure of the case-related information, and there is no causal relationship between the disclosed content and its investment decision. Additionally, the subscription price of Meishan Junzheng was not affected by the information disclosure content of (the listed company), etc.

This is not the first time both sides have clashed.

In May 2024, as a shareholder of Shangshi Development, Meishan Junzheng publicly “complained” that the company’s “dividend payout rate and dividend rate are significantly below the market average,” and suggested that the company adjust the 2023 profit distribution plan to “distribute 0.15 yuan per share.” However, this proposal was rejected at Shangshi Development’s 2023 annual general meeting.

Held trapped in private placement for many years

In January 2016, Shangshi Development completed a non-public issuance, issuing 336 million shares at 11.63 yuan per share, raising 3.9B yuan. Among them, Meishan Junzheng subscribed for 51.47M shares with 599 million yuan. In October 2016, Shangshi Development implemented a 3-for-10 share bonus issue, converting capital reserve into share capital for all shareholders. As a result, Meishan Junzheng’s holdings increased to 66.9084 million shares.

On January 22, 2019, Meishan Junzheng’s shares were unlocked and became tradable. At that time, Shangshi Development’s stock price was only around 5 yuan per share. Afterwards, the stock price once surged to over 12 yuan in late April 2019, but then entered a volatile downward trend.

In late October last year, Shangshi Development’s stock price rose again above 8 yuan per share, and combined with over 4.72B yuan in accumulated dividends (including tax), Meishan Junzheng’s unrealized loss was significantly reduced. However, the company did not reduce its holdings.

As of the close price on April 3 this year (4.69 yuan per share), the market value of Meishan Junzheng’s holdings was about 314 million yuan.

Meanwhile, a case of fake accounting by Shangshi Development’s subsidiary was exposed. According to regulatory investigations, Shangshi Longchuang, the original controlling subsidiary of Shangshi Development, inflated revenue by 36.9k yuan and total profit by 614 million yuan over six years.

In January 2023, Shangshi Development was under investigation by the China Securities Regulatory Commission. In April 2024, the company was penalized by the Shanghai Securities Regulatory Bureau for failing to disclose information timely and for false records. In June of the same year, the Shanghai Securities Regulatory Bureau penalized Cao Wenlong, the former chairman and general manager of Shangshi Longchuang. In December 2025, the Shanghai Higher People’s Court issued a second-instance criminal judgment against Cao Wenlong, which found that Cao’s contract fraud caused Shangshi Development a loss of over 118 million yuan.

Some individual investors won in the first instance

It is worth noting that some individual investors have won in disputes over “securities false statements” with Shangshi Development.

According to a judgment disclosed on China Judgments Online in mid-March, the Shanghai Financial Court issued a first-instance civil judgment last October. In this case, Dong was the plaintiff, and the defendants included Zeng, Xu, Tang, and a certain third party (referred to as “Party C”). Based on multiple sources of information, Party C is Shangshi Development, while Zeng, Xu, and others are former directors and senior executives of Shangshi Development.

The judgment revealed that, regarding the collective dispute over false disclosures in the annual reports of Party C from 2016 to 2021, the Shanghai Financial Court made an effective exemplary judgment (2023) Hu 74 Minchu 646, recognizing that Party C’s financial statements contained false records. The false records were made on March 29, 2017, and disclosed on January 12, 2022, with a reference date of March 1, 2022, and a baseline price of 3.95 yuan. Investors who bought and held Party C’s stock between the date of the false statement and the disclosure date are presumed to have a causal relationship with the false disclosure. Party C should compensate investors for the investment difference loss, commissions, and stamp duty caused by the false statements.

The Shanghai Financial Court ordered Shangshi Development to pay plaintiff Dong a total of 36.9k yuan for investment difference loss, commission, and stamp duty. Another civil judgment issued at the same time showed that Shangshi Development was ordered to pay plaintiff Sheng a total of 158.1k yuan for investment difference loss, etc.

From these two judgments, it appears that Meishan Junzheng’s subscription to Shangshi Development’s private placement stock was not within the period of “the implementation of false statements until the disclosure date.”

According to Qichacha, the second-instance trials between Dong, Sheng, and Shangshi Development are scheduled for mid-January this year, but the specific progress of the second trial is unknown from public sources.