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Wen Wen | "Chinese Entrepreneur" reporter Tian Tian
Editing | Lin Wenlong
On the morning of June 23, after experiencing multiple versions of the listing plan, Xiaomi finally started a Hong Kong stock offering and held a press conference for the global offering at the Four Seasons Hotel in Hong Kong.
In 2017, Xiaomi’s annual revenue was RMB 114.6 billion, an increase of 67.5% year-on-year. Lei Jun explained why Xiaomi’s products are popular? “It's actually quite simple, that is, higher quality, half the price.”
However, environmental organizations have questioned whether Xiaomi is trading at cheaper environmental resources for cheap mobile phones.
On the eve of Xiaomi's IPO, a research report titled “Supply Chain Reappears More Seriously Contaminated, Xiaomi's IPO Alleged Disclosure Violation” was submitted to the Hong Kong Stock Exchange. The report was organized by the environmental protection organization Green Jiangnan Public Environmental Concern Center (hereinafter referred to as 'Green Jiangnan'). Published jointly with the Public Environmental Research Center.
Xiaomi has responded to the report's supply chain pollution problems. A few days ago, Xiaomi Group’s public offering of depository receipts was published on the website of the China Securities Regulatory Commission. Xiaomi said that “some of the company’s existing suppliers had violated environmental regulations”. Suppliers of environmental violations have 'corrected their non-compliance with environmental regulations'.
According to information released by the Public Environmental Research Center through its official media, 'Ulan Blue Map', this is the first time that Xiaomi has publicly admitted that his existing suppliers had violated environmental protection regulations. Several environmental protection organizations have been involved in the pollution of Xiaomi's supply chain for 4 years. Many, now, environmental groups have acknowledged Xiaomi's public recognition of pollution in his supply chain, but doubts have still not been eliminated.
The green Jiangnan base camp is in Suzhou. The Green Jiangnan learned from the Suzhou High-tech Zone environmental protection department that the plating and etching shop of Yijia Electronics Suzhou Co., Ltd., a suspected supplier of millet, has been ordered to suspend production. The environmental protection department is conducting comprehensive inspections on groundwater and underground soil. Excavation monitoring.
'The information we learned was inconsistent with Xiaomi’s claim that its environmental compliance supplier had corrected the conditions that were not in compliance with the environmental regulations. 'The director of the Green Jiangnan Fang Yingjun told the China Entrepreneur’s reporter, 'said Yijia Electronics suspected of Xiaomi’s suppliers because of Xiaomi’s There is no public recognition, but it has never been denied. 'According to public information, in 2013, Egatronics established a supply relationship with Xiaomi.
Does it affect Xiaomi's listing?
The "Special Information of the Company's Main Business" section of Xiaomi Group's public offering of depositary receipts also mentioned that 'the company's environmental protection policy involves various internal departments, outsourcing partners and other suppliers. According to the environmental protection policy, Vendors must commit to providing raw materials and components in accordance with environmental policies, and suppliers must establish relevant internal control systems to monitor the use of contaminants or dangerous substances.
Obviously, the statement submitted by Xiaomi to the China Securities Regulatory Commission and its prospectus issued by the Hong Kong Stock Exchange has a huge difference from the statement of the supplier's environmental risk issue. The latter did not disclose supply chain pollution.
Green Jiangnan, Public Environment Research Center, Friends of Nature, Friends of the Circle, Green Xiaoxiang, Greenline Qilu 6 environmental groups have jointly sent letters to Xiaomi Company and asked Xiaomi to make corrections to the prospectus documents of the Hong Kong Stock Exchange to protect investors. rights and interests.
In addition, six environmental protection organizations also questioned Xiaomi, based on the evidence to make a statement that these suppliers have corrected their conditions of non-compliance with environmental protection regulations.
As of the press release, Xiaomi has not made any further response. At the press conference on June 23, Xiaomi did not make any statement on the supply chain issue.
'We hope that Xiaomi will not regard the formulation of the supply chain environmental management policy as an expedient measure or as a means of exempting it, but instead effectively establish its long-short supply chain environmental management policy and system to avoid large-scale financing for listing. Development leads to greater pollution.' Ma Jun, director of the Public Environmental Research Center, said.
According to the news of the China Securities Regulatory Commission website on June 19, Xiaomi requested the China Securities Regulatory Commission to postpone the CDR review meeting. The Securities and Futures Commission has decided to cancel the audit of Xiaomi’s issuance filings. At the press conference on June 23, Xiaomi’s chief financial officer Zhou Zhouzi said: 'CDR currently has no plans.'
Inevitably, there will be environmental pollution problems in the production of electronic products. In fact, most high-tech companies outsource manufacturing processes, and the process of environmental pollution is often transferred to partners located upstream in the supply chain.
The Hong Kong Stock Exchange's requirements for listed companies are more stringent than those for A-share listed companies. The requirement for disclosure of environmental information by A-shares is limited to the company itself, and the "Environmental, Social and Governance Reporting Guidelines" issued by the Hong Kong Stock Exchange stipulates that ' The “environmental and social risk management policies of the supply chain” is a general disclosure, and the enterprise has the responsibility to “do not follow the interpretation”. This means that if the company does not disclose the environment, social, governance information in the annual report, it will need to report to the Hong Kong Stock Exchange. Explain why. This provision has been in effect since 2015.
The "Chinese Entrepreneur" reporter consulted Xiaomi's annual report for the last three years. Xiaomi did not disclose environmental risks in his annual report.
In the prospectus document published by the Hong Kong Stock Exchange, Xiaomi wrote about environmental risks: 'We use outsourcing partners to assemble our own hardware products and rely on partners to supply the finished products of ecological chain hardware products. We do not manage any production or assembly. Facilities, only operate some of the key warehouses and engage third-party transportation products. Therefore, we do not face significant health, safety or environmental risks.
The above text only mentions that millet itself has no environmental risk, but does not meet the requirements of HKEx for information disclosure.
Millet accused of supply chain pollution will affect the Xiaomi market?
The key issue is not whether Xiaomi's suppliers are involved in the emission of pollutants. Instead, the information provided by Xiaomi to the Hong Kong Stock Exchange hides the supplier's environmental risk information. The supplier's environmental performance may also affect the investment risk, such as the supplier's Sewerage activities are required to suspend production for rectification, and failure to deliver products in a timely manner may result in disruption of the supply chain. ' A CSR person told the Chinese entrepreneurs.
Fang Yingjun told Chinese Entrepreneurs that they had received a reply from the Hong Kong Stock Exchange. The Hong Kong Stock Exchange has stated that it has filed a record on the pollution of Xiaomi's supply chain and began to review relevant information. The results will provide feedback.
Green Supply Chain Forces Corporate Pollution Control
Millet was contaminated by a supply chain explosion at this time on the eve of the IPO. There was 'rice' on the Internet that the environmental organization was deliberately doing something.
The “supply chain re-enacts more serious pollution, Xiaomi IPO suspected of disclosure violations” mentioned in the rapid expansion of the past four years, millet's supply chain has repeatedly appeared pollution problems, the face of environmental protection organizations questioned, millet blindly silence and avoid.
The only one response was in 2015. Xiaomi expressed through its official Weibo: 'The opinions of the environmental organizations we will feedback to supply chain cooperation companies, urge them to take measures to improve.' However, Xiaomi did not point out the list of related supply chain companies. No follow-up follow-up.
In addition to the report of Jiayi Electronics, Green Jiangnan, and the Public Environment Research Center, four other suspected suppliers of millet that have experienced environmental violations in recent years were Shenzhen Shenchao Optoelectronics (suspect screen panel supplier) and Xiamen Tongda. The group (suspect shell suppliers), Kunshan Changying Precision Technology Co., Ltd. (suspected appearance parts supplier), and Hetai Group (suspected ODM manufacturers), these companies have experienced varying degrees of environmental violations in recent years.
On the afternoon of May 12, 2018, staff from the Green South and the Public Environment Research Center discovered under the bridge on the north side of the Egatronics Co., Ltd. that there was a phenomenon of drainage into the river outside the west area of the Egatronics. The staff borrowed a boat and Drainage Department. They observed from close quarters that a pipe was protruding from the stone wall in the plant and was draining the river.
The staff sampled it, tested it with PH paper and showed a strong acidity, then submitted the water sample to a qualified third party testing agency.
The test results showed that the copper content in the sample exceeded 195 times.
'We started to pay attention to this company, Yijia Electronics in 2015. In March of this year, Yijia Electronics also was fined 117,000 yuan by the Suzhou Environmental Protection Bureau for excessive discharge of water pollutants,' said Fang Yingjun.
After obtaining the test results, staff from the Green Jiangnan and the Public Environment Research Center contacted Xiaomi for the first time, but they had not received a response. They then issued a research report and submitted it to the Hong Kong Stock Exchange.
The green supply chain is a basic project of the Public Environmental Research Center. This project collects environmental data of companies and correlates these information with the industrial chain to form a searchable database. The Public Environmental Research Center hopes to promote the attention of large brands at home and abroad. The environmental performance of its supply chain, using green procurement to promote green production, forced corporate governance.
In fact, more and more companies have realized the importance of green supply chain in enterprise evaluation.
On June 5th, 2016, Alashan SEE United Midtown Alliance, Quanlian Real Estate Chamber of Commerce and other five organizations initiated the 'Green Supply Chain Action in the Real Estate Industry'. On the same day, a total of 48 real estate companies joined the operation, including Wantong, Vanke, Landsea Group and other famous enterprises.
Enterprises participating in the 'Green Supply Chain Operation in the Real Estate Industry' will all provide training to all procurement managers of the company by issuing internal documents. They strictly reject suppliers who emit excessive pollutants in the production process and will use environmental standards instead of purchasing costs in the future. Put in the first place to assess.
'To know that China's carbon emissions, real estate construction industry accounted for 40%, China accounted for 20% of the world, we manage a big number, do a good job this is a world-wide significance. ' Sunac China, Alashan Qian Xiaohua, the sixth president of the SEE Ecological Society, once said in an interview with "Chinese entrepreneurs."
For the first time, millet publicly acknowledged that there was pollution in its supply chain. According to Zhao Liang, the founder of the environmental protection organization Air Man, the attitude of Xiaomi facing the problem is uncertain, but it has progressed.
'Environmental organizations have been tracking the supply chain of brands for many years and have caused companies to start paying attention to the environmental performance of their own supply chains. The consideration of environmental responsibility by the Hong Kong Stock Exchange has also caused companies to respond to problems.' Zhao Liang said.
According to his observations, another trend is that the public’s awareness of environmental protection is increasing day by day. In addition to considering the price and quality of products, they also begin to increase corporate social responsibility and environmental performance.
Attached to "The Millet Group Public Offering Deposit Receipt Proposal Notes" (Excerpt):
Tiantian@iceo.com.cn