SMCP’s Former Majority Shareholder Recovers 15.5% Stake in Controversial Transfer

Smcp resolves its shareholding dispute. European TopSoho, the former majority shareholder of the French fashion conglomerate, has regained control of the 15.5% of the company’s capital that was opaquely transferred in 2021. The shares ended up in the hands of Chenran Qiu, daughter of the founder of Shandong Ruyi, the Chinese holding company that in turn controls European TopSoho.

Smcp’s shareholding conflict has been dragging on since 2021, when the Luxembourg investment vehicle European TopSoho, controlled by Shandong Ruyi, defaulted on its financial obligations. As a result, 29% of the company’s capital passed into the hands of a consortium of creditors grouped in Glas, which has expressed its intention to divest.

However, a previous operation carried out by European TopSoho has further complicated the situation: the transfer, for a symbolic euro, of 15.5% of Smcp’s capital to Chenran Qiu, through the Dynamic Treasure Group trust, registered in the British Virgin Islands. Following the transaction, the investment vehicle issued a press release denying Qiu’s involvement in the group. This transfer of 12 million shares remains undeclared, and Smcp’s own board has acknowledged that it does not know who the beneficial owner of the block is.

Smcp was also fined by the Autorité marchés financiers

The decision follows a Singapore High Court ruling issued on Monday. In a statement, Smpc welcomed that “the return of the shares clarifies the group’s shareholding structure.“ The ruling comes after the Autorité marchés financiers imposed a €1.7 million penalty on the French group’s Chinese shareholders in June for serious breaches of their reporting obligations and for having disseminated data considered to be false or misleading.

The fines were divided between European TopSoho (€400,000), Dynamic Treasure Group (€300,000) and Chenran Qiu, daughter of the founder of Chinese holding company Shandong Ruyi, who was fined €1 million. Smcp Group itself was also sanctioned. The AMF fined it €20,000 for failing to preserve the confidentiality of inside information during the course of the corporate dispute.

This 15.5% stake has been at the center of the shareholder dispute over the years, dating back to the financial collapse of Chinese conglomerate Shandong Ruyi, which acquired a majority stake in Smcp in 2016 through European TopShop ahead of the group’s initial public offering in 2017.