Recently, Shenzhen Netac Technology Co., Ltd. (hereinafter referred to as “Netac Technology”), known as “the first stock of China Mobile Storage”, reappeared internal disagreements, and the candidate directors were questioned for fraudulent academic qualifications.
Supplementary director accused of academic fraud
On August 15, Netac Technology announced that Song Xin, a non-independent director of the fifth board of directors and a member of the strategy committee, applied to resign from the company’s fifth board of directors and a member of the strategy committee due to personal reasons. The original term of Mr. Song Xin’s above-mentioned positions expired on July 2, 2023. As of the disclosure date of this announcement, Mr. Song Xin or his related parties did not hold any shares in the company, and there were no commitments that should have been fulfilled but not fulfilled. According to relevant regulations, Song Xin’s resignation will not cause the number of the company’s board of directors to fall below the legal minimum, and will not affect the normal operation of the company’s board of directors. The resignation report will take effect from the date it is delivered to the company’s board of directors. Netac Technology stated that it will complete the by-election of directors as soon as possible in accordance with legal procedures.
On August 20, Netac Technology disclosed that it planned to add Zhou Fuchi as a non-independent director. According to public information, the resume of Zhou Fuchi, a non-independent director candidate, is as follows: Zhou Fuchi, male, born in 1974, Chinese nationality, no overseas permanent residence, master of mathematics, graduated from the Department of Computer Science and Engineering of Harbin Institute of Technology, Microsoft engineer, He presided over the research and construction of several large-scale data systems and Internet application technology systems, and served as the chief innovation officer of HNA Group, vice president of HNA Tourism Group, chairman of the Internet Business Department, and vice president of HNA Cruises.
The motion to add Zhou Fuchi as a non-independent director was approved by 5 votes, but also received 3 votes against.
Among them, directors Deng Guoshun and Wang Rong objected. The reason for the objection was that the information provided by Zhou Fuchi was inconsistent with the content of the recommendation form, and the authenticity of the information provided was questionable, which violated the principle of truthfulness, accuracy and completeness. Director Zhong Gangqiang also objected. The reason for the objection was that the information provided by Zhou Fuchi was inconsistent with the content of the recommendation form, and violated the principle of true, accurate and complete commitment.
This situation has also attracted the attention of regulators. On August 19, the Shenzhen Stock Exchange issued the “Letter of Concern to Shenzhen Netac Technology Co., Ltd.” to Netac Technology, and requested Netac Technology to submit relevant explanatory materials to the GEM company before August 21, 2021. The management department will disclose it to the public and send a copy to the Listed Company Supervision Office of Shenzhen Securities Regulatory Bureau.
In the announcement of Netac Technology’s reply to the Shenzhen Stock Exchange’s letter of concern, directors Deng Guoshun and Wang Rong stated in writing that the meeting materials received provided the company’s largest shareholder, Shanghai Yili Enterprise Development Co., Ltd., nominated Zhou Fuchi as the fifth The recommendation form of the non-independent director candidates of the session of the board of directors, the commitment letter of Zhou Fuchi’s non-independent director candidates, and Mr. Zhou Fuchi’s ID card, but did not provide any information such as Zhou Fuchi’s academic certificates, degree certificates, graduation certificates, etc.
The recommendation form clearly states that Zhou Fuchi is “Master of Mathematics, graduated from the Department of Computer Science and Engineering of Harbin Institute of Technology”. On August 16, I received an email from Netac Technology, supplemented with Zhou Fuchi’s graduation certificate for a master’s degree in computer application technology from Harbin Institute of Technology, but still did not provide Zhou Fuchi’s certificate for a master’s degree in mathematics and the Department of Computer Science and Engineering of Harbin Institute of Technology. of graduation certificate. During the meeting on August 18, director Deng Guoshun repeatedly requested Zhou Fuchi’s master’s certificate in mathematics and a graduation certificate from the Department of Computer Science and Engineering of Harbin Institute of Technology, but Zhou Fuchi and the company were unable to provide them until the voting at the board meeting. Therefore, it is believed that Zhou Fuchi has violated Nuo’s promise that “my relevant information is true, accurate and complete”.
Similarly, director Zhong Gangqiang made a similar explanation in his written reply.
On the afternoon of August 20, directors Deng Guoshun and Wang Rong went to the company to check Zhou Fuchi’s undergraduate diploma from the Department of Computer Science and Engineering of Harbin Institute of Technology. The date of birth on Zhou Fuchi’s ID card is June 14, 1974, and the two are inconsistent. There is a problem with the authenticity of the undergraduate diploma. Zhou Fuchi is suspected of falsifying his academic qualifications, and the company is required to verify the authenticity of Zhou Fuchi’s academic qualifications.
Candidate’s response: All the information is true, the date is wrongly printed as “Oolong”
In this regard, Netac Technology stated that after verification, Zhou Fuchi graduated from the Department of Computer Science and Engineering of Harbin Institute of Technology with a bachelor’s degree and a master’s degree from the School of Mathematics of the same school. , there is no inconsistency.
Director candidate Zhou Fuchi also responded to the above questions in the reply letter of concern. Zhou Fuchi said that in terms of educational experience, Zhou Fuchi studied at the Department of Computer Science and Engineering of Harbin Institute of Technology during his undergraduate study (1993.09-1997.07). (1997.09-2000.07) studied in the Department of Mathematics (College), majoring in computer application technology, and obtained a master’s degree certificate.
The Department of Computer Science and Engineering of Harbin Institute of Technology was established in 1985, and the Department of Mathematics was established in 1987 (the School of Mathematics was established in 2019). The computer application technology major is a professional discipline under the Department of Mathematics. In 2000, Harbin Institute of Technology established the School of Computer Science and Technology, and the Department of Computer Science and Engineering was merged into the school. At the same time, the computer application technology major was transferred from the School of Mathematics to the School of Computer Science and Technology.
The above facts of the history of the department and the time of study can prove that the professional name of the department in the academic certificate provided by Zhou Fuchi is consistent with the educational experience contained in the “Recommendation Form”, and there is no inconsistency. In the submitted undergraduate diploma, the year and month of the date of birth are correct, and there is a printing error in the date item (3 days difference), Zhou Fuchi retains the original submission. Everything else contained is accurate.
The directors Yu Bo, Xing Tianhao, Wei Wei, Li Xiaolei, and Qiu Xiaping who voted in favor of this candidate’s motion said that with regard to the educational background and resume materials provided by Zhou Fuchi, they compared the relevant regulations for the appointment of directors of listed companies, and believed that the candidates Zhou Fuchi Fuchi meets the qualifications for serving as a director of a listed company, and complies with Article 3.3.3 of the Guidelines for the Standardized Operation of Listed Companies on the Growth Enterprise Market (Revised in 2020).
The author noticed that in the relevant proposal on Feng Xiaoyong, another non-independent director candidate, the “Proposal on Deng Guoshun’s Nomination of Feng Xiaoyong as the Company’s Non-Independent Director Candidate” was not reviewed and approved by the Netac Technology Nomination Committee, among which Qiu Xiaping and Xing Tianhao voted 2. Against it, Zhong Gangqiang agreed with one vote. Regarding the reasons for the failure, the Netac Technology Board of Directors disclosed that the candidate Feng Xiaoyong was the legal representative and executive director of Shanghai Saixu Network Information Technology Co., Ltd. Shanghai Saixu Network Information Technology Co., Ltd. has its business license revoked on June 14, 2021 for violating the provisions of Paragraph 1 of Article 211 of the Company Law. According to Article 146(4) of the Company Law, Feng Xiaoyong should not be nominated as a candidate for a non-independent director of the company. Throughout the whole incident, Deng Guoshun, who questioned Zhou Fuchi’s academic fraud, was the second largest shareholder of Netac Technology, while Zhou Fuchi was nominated by Shanghai Yili, the company’s largest shareholder.
Netac Technology: 99 patents have been brilliant for 20 years
I believe many people are very familiar with Netac Technology. Netac Technology was successfully listed on the A-share Growth Enterprise Market in 2010. Since its establishment, Netac Technology has achieved diversification and orderly expansion through core technologies and independent innovation capabilities. At present, its products have covered five major product areas: flash disks, memory cards, solid-state drives, mobile hard disks, and memory sticks. The company implements a patent operation strategy. As of December 31, 2020, Netac has a total of 328 patents and patent applications, and 317 patents have been authorized, which are distributed in China, the United States, Europe, Japan, South Korea, Hong Kong and other countries and regions around the world.
Netac Technology once relied on U disk patents to collect patent fees from the world for 20 years. Before November 14, 2019, for every U disk sold in the world, Netac Technology had to pay a portion of the patent fees. But with the end of the patent protection period, this also means that Netac Technology will no longer be able to make money from patents.
(From Netac Technology 2020 Annual Report)
According to the 2020 financial report released by Netac Technology, during the reporting period, the company achieved operating income of 1,490,916,600 yuan, an increase of 24.85% over the same period of the previous year; operating profit of 83,568,900 yuan, a decrease of 5.58% over the same period of the previous year %; the total profit was 83.5841 million yuan, down 5.59% over the same period of the previous year; the net profit attributable to shareholders of the listed company was 70.6522 million yuan, down 1.67% over the same period of the previous year. It is not difficult to find that a number of data indicators have declined.
In terms of possible risks and countermeasures, Netac Technology focused on “the failure to find new core patents to replace the 99 patents, leading to the risk of declining patent operating income”. Specifically, Netac Technology’s core basic invention patent “Fast Lightning External Storage Method and Device for Data Processing System” (patent number: ZL99117225.6) has passed the patent protection period on November 14, 2019. invalid.
How important is this patent to Netac Technology? On the one hand, the 99 patent has established Netac’s position in the U disk industry, and it is also a weapon for Netac to fight a lawsuit with a number of storage companies. Relying on this patent, it has obtained a lot of licensing income. The patent also won the 15th China Intellectual Property Highest Award in 2013 – China Patent Gold Award, and the gold content is still very high.
Obviously, Netac Technology’s patent operation business is very dependent on this patent. Once the 99 patent protection period expires, Netac Technology can use its continuous business value to weaken. Netac Technology said that although the company has been trying to find new core operating patents through different channels, the establishment of new core patents requires inspections such as patent stability analysis, product technology comparison, patent infringement litigation, and invalidation procedures, which cannot be accomplished overnight. At present, there are no effective measures to fundamentally solve the adverse impact on the company’s patent operating income caused by the weakening of commercial value after the 99 patent expires. The above situation may cause the company to be unable to continue the operation of patents or patent pools in the future, resulting in the risk of a sharp decline in the company’s patent operating income.
In this regard, Netac Technology stated that it will strengthen the mining and analysis of its own patents, strengthen patent training for R&D personnel, and improve the quality of patent applications; in addition to its own patents, the company actively expands available patent sources, including third-party patents. Evaluate patents or patent packages, and explore the possibility of cooperating with third parties in patent operations, such as patent transfer, patent licensing operations, etc.
Today, Netac Technology has not yet solved the major problems faced by its own development, and has fallen into internal disagreements suspected of equity struggles. In any case, the above-mentioned resolutions will be voted on at the second extraordinary general meeting of shareholders in 2021 on September 6. The author will continue to pay attention to the specific results.
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