The internal strife of ST Lutong has intensified, and "capital tycoon" WU Shichun has encountered obstacles in his "bottom-fishing" attempt.
A "business war" over the control of ST Lutong (300555.SZ) has spread from the board of directors to the court.
According to a report by China Fund News, on the morning of October 20, two lawsuits between ST Lutong and Wu Shichun, the founding partner of Plum Ventures, and others were heard in the People's Court of Changping District, Beijing, pushing this months-long control battle to a climax.
At the court hearing, both sides presented and debated on relevant controversial issues. The compliance of information disclosure in the agreement acquisition and voting rights delegation became the focus of the dispute. ST Lutong put forward two core demands in the lawsuit: Firstly, it requests to restrict the voting rights of Wu Shichun and his affiliated parties for their illegally increased shares; secondly, it claims 2.5 million yuan in compensation for the "illegal request to reorganize the board of directors" and "illegal information disclosure" behaviors.
As of October 22, ST Lutong closed at 10.8 yuan per share, with a total market value of 2.2 billion yuan.
Courtroom Confrontation
The report by China Fund News shows that in the court hearing on October 20, the focus of the dispute between the two sides mainly revolved around the compliance of voting rights.
ST Lutong believes that Wu Shichun's acquisition of ST Lutong may have touched the compliance red line. According to the replies to the exchange's letters of concern issued by ST Lutong on June 27 and July 11, the partnership enterprise "Meiling Partnership" that Wu Shichun intended to use to acquire ST Lutong had not been established yet. The transaction price terms may have prematurely locked in the agreement transfer price.
ST Lutong also pointed out that in addition to the non-disclosure of the Share Transfer Agreement signed on May 7, the Voting Rights Delegation Agreement signed by Wu Shichun and other shareholders on the same day was also not disclosed. The delegation agreement stipulates that the share transferor irrevocably and fully delegates the voting rights and other shareholder rights corresponding to the transferred shares to Wu Shichun. This means that when sending a request to convene a general meeting of shareholders to ST Lutong on May 26, combined with the publicly disclosed 7.46% and the undisclosed 6.4% share voting rights delegation, Wu Shichun already held at least 13.86% of ST Lutong's shares.
In response to ST Lutong's accusations, Wu Shichun's side responded and refuted at the court hearing, arguing that Wu Shichun was exercising his legitimate rights. Wu Shichun's side also stated that the regulatory authorities have never considered that Wu Shichun had illegally held or increased shares. It was the plaintiff, ST Lutong, that failed to fulfill its information disclosure responsibility. They also pointed out that the plaintiff has not disclosed the sixth resolution of the board of supervisors so far.
Image source: Can Stock Photo
It is worth noting that on the same day as the court hearing on October 20, ST Lutong issued an announcement stating that the Shenzhen Stock Exchange issued a regulatory letter to ST Lutong and its chairman, Qiu Jingwei. The exchange believes that the company had violated regulations by failing to issue a notice for the shareholders' meeting in a timely manner. That evening, the Jiangsu Securities Regulatory Bureau also issued a document to ST Lutong, deciding to take administrative regulatory measures to order the company to make corrections, issue a warning letter to Qiu Jingwei as an administrative regulatory measure, and record it in the integrity file of the securities and futures market.
The Battle for Control of ST Lutong
This battle for control began at the beginning of this year.
In March, Wu Shichun of Plum Ventures acquired 7.44% of ST Lutong's equity through an auction for 150 million yuan, securing the position of the company's largest shareholder.
ST Lutong, namely Wuxi Lutong Vision Network Co., Ltd., was established in 2007 and is headquartered in Wuxi, Jiangsu. It was listed on the Growth Enterprise Market of the Shenzhen Stock Exchange in 2016. It is a high-tech enterprise focusing on communication equipment and smart IoT applications. Its core businesses include network communication equipment, smart IoT applications, as well as the development of emerging technologies such as AI software and artificial intelligence.
On May 26, shareholders Wu Shichun, Gu Jiming, and Yin Guanmin of ST Lutong sent a written letter to the company's board of directors requesting the convening of an extraordinary general meeting of shareholders. They mainly requested the removal of directors Qiu Jingwei, Fu Xinyue, and Wang Xiaofang, and the election of Wu Shichun, Gao Xiang, and Yu Tao as directors.
Currently, ST Lutong has a total of five directors, namely Qiu Jingwei, Fu Xinyue, Wang Xiaofang, Huang Yuanzheng, and Tang Sixin. Among them, Qiu Jingwei is the chairman, and Huang Yuanzheng and Tang Sixin are independent directors. Wu Shichun, Gu Jiming, and Yin Guanmin hold 10.46%, 2.21%, and 1.06% (a total of 13.73%) of the company's shares respectively. Wu Shichun is the largest shareholder of ST Lutong.
According to a previous announcement by ST Lutong, the reason for the removal proposed by Wu Shichun and others is that due to the debt problems of Huasheng Yuncheng and its affiliated parties, the shares of ST Lutong held by Huasheng Yuncheng have been continuously and passively reduced, and it no longer directly holds ST Lutong's shares. Therefore, they believe that the directors nominated by Huasheng Yuncheng are not suitable to continue serving as directors.
However, this proposal was unanimously opposed by all five directors of ST Lutong's board of directors. The reasons for the board's opposition include: the directors proposed to be removed have not completed their terms and their qualifications are legal; the reasons for removal lack legal basis; removing more than half of the directors at once will impact the company's operational stability; currently, the shareholders are changing frequently, and the reorganization of the board of directors may lead to chaos in control.
In response, Wu Xindong, a partner and lawyer at Beijing Deheng Law Offices, said that laws and regulations such as the Company Law do not stipulate that a change in the shareholding situation of the nominator necessarily means that the director nominated by them is not suitable to continue serving as a director. The appointment and removal of directors mainly depend on whether they have violated laws and regulations, the company's articles of association, or damaged the company's interests and other legal circumstances, rather than simply based on the change in the shareholding of the nominating shareholder. However, having key seats on the board of directors without equity has a two-sided impact on corporate governance: On the one hand, if directors serve based on their professional abilities and experience, they can provide objective and professional decision-making support for the company, independently supervise the management, and safeguard the overall interests of the company. On the other hand, the lack of equity connection may lead to a misalignment of interests between the directors and shareholders. When making decisions, they may pay insufficient attention to the company's performance and shareholder returns, which may easily lead to a battle for corporate control. They may also face difficulties in resource allocation during strategic implementation due to the lack of shareholder support, and there is also a risk that insufficient information acquisition may affect the quality of decision-making.
After being frustrated by the board of directors, Wu Shichun turned to the board of supervisors to request the convening of an extraordinary general meeting of shareholders. On June 8, the board of supervisors passed the relevant motion with two in favor and one against. However, the company's board of directors rejected it again, citing the reason that "considering that the proposal to reorganize the board of directors violates the regulations in the Measures for the Administration of Takeovers of Listed Companies that prohibit the proposal to reorganize the board of directors during the takeover transition period."
However, ST Lutong failed to timely disclose the aforementioned resolution announcement of the board of supervisors and the notice of the extraordinary general meeting of shareholders.
Image source: Can Stock Photo
Lawyer Wu Xindong said that according to the Rules for the Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange, listed companies are required to timely fulfill their information disclosure obligations and respond to regulatory inquiries in a compliant manner within the specified time limit. If ST Lutong fails to respond to the Shenzhen Stock Exchange's letter of concern before the specified time, it may have violated the principle of timeliness in information disclosure. From a regulatory perspective, such a situation may be regarded as a violation of information disclosure regulations. The Shenzhen Stock Exchange may subsequently take further self-regulatory measures or impose disciplinary sanctions, including issuing regulatory letters and arranging interviews.
The regulatory penalties arrived as expected. On June 23, due to the failure to disclose information as required, the Jiangsu Securities Regulatory Bureau had already ordered ST Lutong to make corrections, and the company's chairman, Qiu Jingwei, was issued a warning letter. The Shenzhen Stock Exchange also issued a letter of concern to ST Lutong, requesting an explanation of whether the board of directors had improperly restricted shareholders' rights and other situations. On the same day as the court hearing on October 20, ST Lutong and Qiu Jingwei received another regulatory letter.
Now, the battle for control of ST Lutong has spread from the board of directors to the court. Just as the battle for control is intensifying, ST Lutong itself is facing severe operational difficulties.
Wu Shichun's Two Moves in "Problematic Companies"
In addition to the internal strife within the board of directors, judging from its performance in recent years, ST Lutong's performance is far from optimistic.
ST Lutong has suffered losses for four consecutive years. From 2021 to 2024, its net profits were -15 million yuan, -18 million yuan, -37 million yuan, and -57 million yuan respectively. In the first quarter of 2025, the company's revenue was 29.46 million yuan, a year-on-year decrease of 29.84%; the net profit was -4.35 million yuan, a year-on-year decrease of 6.81%.
In the first half of this year, the company's revenue was 42.7566 million yuan, a year-on-year decrease of 25.88%; the net profit was -21.8668 million yuan, and the loss narrowed year-on-year.
ST Lutong's shares have been subject to other risk warnings since February 1, 2023, which is more than two years ago. According to the facts found in the Decision on Administrative Penalty, from September 2021 to July 2022, the actual controller of ST Lutong and its affiliated parties had a total of 155.8 million yuan in funds occupied.
As of May 30 this year, the aforementioned fund occupation had not been fully resolved, and the outstanding amount was 8.6936 million yuan.
It is worth noting that this is the second time this year that Wu Shichun has made a move in a listed company with poor performance, a small market value, and certain management problems.
Previously, on January 6, Wu Shichun spent 230 million yuan to take over 10.65% of the shares of Wu Jing, the ex-wife of Jiang Tianwu, and entered Mengjie Co., Ltd. (002397.SZ). The board of directors of Mengjie Co., Ltd. was also in a state of "internal strife". Since female director Chen Jie was elected as a director of the company on February 3, 2023, she has voted against or abstained from voting on every motion at the board of directors. However, all the motions reviewed by the board of directors have been passed.
After voting against 13 consecutive motions and making a real-name report, on October 20, the Shenzhen Stock Exchange and the Hunan Securities Regulatory Bureau issued a Regulatory Letter and a Decision on Administrative Supervision to Mengjie Co., Ltd., its chairman Jiang Tianwu, general manager Tu Yunhua, and chief financial officer Li Yunlong. The issues involved mainly include financial problems.
The Hunan Securities Regulatory Bureau and the Shenzhen Stock Exchange found that from 2022 to 2024, the company's direct sales counters and its subsidiary, Fujian Dafang Sleep Co., Ltd., had cases of cross-period recognition of direct sales revenue and costs. The company's sales rebates had cases of cross-period reduction of operating revenue, and the employee salaries and social security had cases of cross-period accrual. In addition, Fujian Dafang Sleep Co., Ltd., a subsidiary of Mengjie Co., Ltd., provided financial assistance to Ye Moufeng through inter-company loans. As of December 31, 2021, the balance of the inter-company loans to Ye Moufeng totaled 66.03 million yuan; as of September 30, 2025, the balance of the inter-company loans to Ye Moufeng was 63.38 million yuan. The company and its subsidiaries have imperfect financial management and internal control systems, and are negligent in recovering the inter-company loans from Ye Moufeng.
The regulatory authorities determined that the company's chairman Jiang Tianwu, general manager Tu Yunhua, and chief financial officer Li Yunlong failed to fulfill their duties diligently and in good faith, violated the Stock Listing Rules, and were mainly responsible for the company's above-mentioned violations. Their names will be recorded in the integrity file of the securities and futures market. The company is required to complete the rectification within three months after receiving the decision and submit a written report.
In August this year, the company announced that Jiang Tianwu and others had terminated the voting rights delegation agreement with Liu Bian, the "illegal fundraising tycoon". The board of directors of Mengjie Co., Ltd. is forming a new "triangular confrontation" situation. Among them, Jiang Tianwu holds 13.52% of the shares, Qingyun Shuke, in which Wu Shichun has a stake, holds 10.65% of the shares, and Liu Bian and others' Jinsen New Energy holds 10.3% of the shares. No single party can easily control the company alone, and Mengjie Co., Ltd. has become a company without an actual controller.
Yuan Shuai, the co-founder and initiator of the New Intelligence and New Productivity Conference Hall, said that behind Wu Shichun's moves in "problematic companies", it may reflect his unique investment ideas and strategies. He tends to intervene when the market is undervalued or the enterprise is facing difficulties, and realizes the value reshaping and growth of the enterprise through resource integration and management