×
You will be redirected back to your article in seconds

China’s Stock Regulator Sounds Warning on Yinji Media (EXCLUSIVE)

China’s stock market regulator has hung a warning sign – almost literally – on Yinji Media, the listed Chinese company that split off from DMG Entertainment five years ago. The China Securities Regulatory Commission earlier this week ordered that the stock’s name be re-designated as “ST Yinji,” or “Special Treatment Yinji,” as a warning to investors of particularly high risk.

The order, which was issued Monday, is a sign of the mounting problems for Beijing-based Yinji. The company grew out of DMG Entertainment – which was founded by Dan Mintz, Peter Xiao and Wu Bing – and split off in 2014 to concentrate on marketing, film distribution in China and other entertainment-related activities. Yinji, with Xiao as its chairman, is listed on the Shenzhen Stock Exchange, and has seen its share value plummet.

The ST label slapped on Yinji was introduced by Chinese regulators in 2013. It is used either when a company has been in loss for two consecutive years or is in danger of being de-listed. The ST system also reduces stock volatility by imposing a 5% per day cap on price movements, either up or down.

After a massive 2018 loss, partly due to a writedown of impaired assets, Yinji issued a March 30 forecast, warning of further losses in the first quarter of 2019. It said that it could lose RMB33 million to RMB49.5 million ($4.9 million to $7.37 million) as a result of its capital problems, its frozen bank accounts, and the knock-on effect on day-to-day operations.

Since receiving the “special treatment” tag, ST Yinji shares have declined by the daily limit for five consecutive days, forcing the company to put out a further notice about unusual stock movements.

In other filings this week, Yinji announced that it had received a RMB6.6 million ($980,000) repayment of a loan made to co-founder Xiao. It also revealed that it had lost a civil court case over a contract for set-top decoders, and that it had been order to pay $6.7 million (RMB45 million).

Yinji encompasses the Chinese assets that had been a part of DMG Entertainment, the Beverly Hills-based company that has been involved in “Iron Man 3,” the “Point Break” remake, “Transcendence,” and the “Valiant” comics properties.

DMG and its former head of motion pictures, Chris Fenton, are currently locked in a legal battle in California, with Fenton suing DMG for a $30 million share of the profits that came from Yinji’s 2014 IPO on the Shenzhen Stock Exchange. DMG has launched a counterclaim, also seeking $30 million in damages, and accusing Fenton of fraud, breach of fiduciary duty, and negligence.

DMG is now in a vastly different situation from just a few years ago, when it announced a succession of grand projects. These included assembling a $256 million fund to make a bid for Forbes magazine, a $230 million deal with a Korean hedge fund to invest in mainland Chinese movie theaters, and appointing financial advisers to assist with a possible bid for part of Paramount Pictures.

In 2015, Mintz also announced a $600 million bid for Eastern Broadcasting, one of the largest cable TV providers in Taiwan. He was at pains to point out that the offer did not come from Yinji but from the U.S. part of DMG. The bid collapsed after a year-long probe by Taiwanese regulators.

More Biz

  • Village Roadshow Studios Queensland

    Australia’s Village Roadshow Receives Second Takeover Bid

    Australian studios, cinemas and theme parks group Village Roadshow Limited has received a tentative takeover bid from private equity firm BGH. The bid follows a December offer from another funds group, Pacific Equity Partners. The earlier offer valued VRL at A$3.90 per share. BGL’s proposal is for a bid worth A$4 per share, payable in [...]

  • Us Basketball Team Players Lebron James

    LeBron James Breaks Silence on Kobe's Death: 'I'm Heartbroken and Devastated'

    In a heartfelt Instagram post, LeBron James broke his silence on the tragic death of Kobe Bryant late Monday, saying he was “heartbroken and devastated.” “Sitting here trying to write something for this post but every time I try, I begin crying again thinking about you, niece Gigi and the friendship, bond and brotherhood we [...]

  • Investigators work the scene of a

    Pilot in Kobe Bryant Crash Said He Was Trying to Get Above Clouds

    The pilot of the helicopter that crashed on Sunday, killing Kobe Bryant and eight others, radioed to the tower that he was trying to get above the clouds shortly before the crash, an NTSB official said Monday. Jennifer Homendy, a board member of the National Transportation Safety Board, said that the agency would look at [...]

  • Kobe Bryant Dead

    Lakers-Clippers Game Postponed In Wake of Kobe Bryant's Death

    UPDATED: This post was updated with TNT’s plans to air a tribute to Bryant.  Tuesday night’s game between the Lakers and Clippers has been postponed indefinitely following the death of Kobe Bryant on Sunday. In a statement, the NBA league office said, “The decision was made out of respect for the Lakers organization, which is [...]

  • Mimi Haleyi Weinstein trial

    Weinstein Attorney Goes on Offense Against 'Project Runway' Assistant

    Harvey Weinstein’s defense attorney went on the attack on Monday afternoon, suggesting that a sex assault accuser had fabricated her claims because it was no longer “in vogue” to be friends with the producer. Miriam Haley testified earlier in the day Monday that Weinstein forcibly performed oral sex on her at his apartment in 2006. [...]

  • Kobe Bryant Dead

    Southern California Radio Stations Go Silent in Honor of Kobe Bryant

    Southern California radio stations are holding a moment of silence at noon to honor NBA legend Kobe Bryant, who died on Sunday. The stations dedicated one minute and eight seconds of silence to Bryant. The eight extra seconds are a reference to his original jersey number. The Southern California Broadcasters Association gave specific instructions on [...]

  • Harvey Weinstein arrives at court for

    Weinstein Defense Makes Third Request for a Mistrial

    Harvey Weinstein’s defense team filed a formal request for a mistrial on Monday, arguing that numerous judicial errors have hopelessly prejudiced the jury. The motion was the third request for a mistrial since the proceedings got underway earlier this month. In the motion, defense lawyer Damon Cheronis argued that Annabella Sciorra had given hearsay testimony [...]

More From Our Brands

Access exclusive content