【英文】浑水资本报告：做空安踏 ANTA Sports Products（107P）

ANTA’s Mr. Wu Yonghua was Supervisor of GZ Anda through July 2017. Wu Yonghua is oneof Chairman Ding’s trusted generals. In the 2012 Annual Report, Mr. Wu’s biography read “Mr.Wu Yonghua, aged 41, is the Executive Director and the Executive Vice President of theCompany. He is primarily responsible for the Group’s sales and marketing management. Hejoined the Group in October 2003 and has over 10 years of experience in sales and marketing in China.”

According to Mr. C, Wu Yonghua is responsible for ensuring that subsidiary distributors’ retailers perform. Controlling the Supervisor role is an effective way to ensure ANTA maintains control because PRC law gives the Supervisor the ability to inspect the company’s finances, recommend senior managers and directors be dismissed, and propose shareholder meetings. The Supervisor reduces the risk of the company’s Legal Representative going rogue.

Aside from the fact that having an ANTA senior manager as a Supervisor also likely made GZ Anda a Connected Person under Hong Kong Listing Rules (see below), the Supervisor is an effective, yet stealthy, means for ANTA to ensure de facto control of one of its key distributors.  Interestingly, ANTA’s 2007 prospectus purported to disclose Ding Qingliang’s employment history prior to establishing GZ Anda. The problem is this disclosure was misleading (or even an outright lie). It stated that he had been deputy manager of an unnamed Jinjiang footwear manufacturer prior to establishing GZ Anda.

The record below shows Ding Qingliang was a manager in ANTA (China) Ltd.’s marketing department through 2006. As such, in mid-2005, when GZ Anda was established, Ding Qingliang was still an employee of ANTA (China).