Source: Shanghai Securities News
After more than a year of investigation, ST Jinzheng's case of suspected violations of information disclosure laws and regulations has a clear result. On the evening of the 19th, the company disclosed that it had received the CSRC's "Administrative Punishment Decision" and "Market Prohibition Decision", and the CSRC investigated and determined that the company had financial fraud and gave corresponding penalties.
According to the CSRC's investigation, ST Kingzheng mainly has three types of illegal facts: one is to inflate revenue and profits through fictitious trading business; second, it fails to disclose related parties and related party transactions in accordance with regulations; and third, there are false records in some assets and liability accounts.
According to the investigation, from 2015 to the first half of 2018, ST Kingent and some subsidiaries within the scope of its consolidated statements carried out fictitious trading business without physical circulation through fictitious contracts with its suppliers, customers and other external units, with a cumulative inflated income of 23.07 billion yuan, an inflated cost of 21.084 billion yuan, and a total inflated profit of 1.99 billion yuan. Accordingly, ST King's financial report for the corresponding year was falsely recorded.
ST Jinzheng also has long-term capital transactions with Noble Feng Investment controlled by Wan Moujun, who is the sister of Wan Lianbu, the actual controller, chairman and general manager of the company, but the company did not disclose the related relationship according to regulations. In 2018 and 2019, ST Jinzheng paid non-operating funds of 5.545 billion yuan and 2.53 billion yuan to Noblefon through prepaid accounts, most of which were transferred to the in vitro capital pool by ST Jinzheng, mainly for fictitious trade fund circulation, repayment of loan principal and interest, and operation of assets outside the system.
In addition, ST King zheng also issued commercial acceptance drafts through banks to 7 companies involved in the aforementioned fictitious trading business, including Linyi Van Gogh Agricultural Materials Sales, with a cumulative amount of 1.028 billion yuan. In order to solve the large prepaid account balance and the false provisional inventory balance, ST Kinge also fictitiously produced the production process and artificially increased the production of finished products by 2.544 billion yuan.
The CSRC's investigation determined that Wan Lianbu, the controller, chairman and general manager of ST Jinzheng, was fully responsible for decision-making and organizing the implementation of the above-mentioned illegal acts, and that Li Jiguo, then deputy general manager and financial person in charge, and Tang Yong, then manager of the finance department and director of the financial center, organized and participated in the above-mentioned illegal acts, failed to fulfill their duties of diligence and due diligence, and were directly responsible supervisors. Accordingly, Wan Lianbu was given a warning and fined 2.4 million yuan and taken a 10-year market entry ban measure; Li Jiguo was given a warning and fined 600,000 yuan to adopt a 5-year market entry ban; Tang Yong was given a warning and fined 550,000 yuan to adopt a 3-year market entry ban.
At the same time, the CSRC decided to order ST Jinzheng to make corrections, give a warning, and impose a fine of 1.5 million yuan; and give a warning to five other executives who knew about and participated in the above-mentioned illegal acts, and imposed a fine of 500,000 yuan each.
According to the announcement, after the regulatory authorities issued the "Advance Notice", ST Jinzheng, Wan Lianbu, etc. submitted a request to postpone the administrative punishment, on the grounds that the company is currently in the most critical period of active rectification, recovery, risk elimination, and bankruptcy reorganization of controlling shareholders, in order to maintain the stability of the existing management team and avoid the punishment leading to management changes, we kindly request that the administrative penalty decision be extended until the end of March 2022. The regulatory authorities determined that the reasons for the extension of punishment proposed by the parties were not directly related to the case, and there was no basis for the extension.