CCTV Beijing, May 13 (Reporter Qi Zhiying) On May 12, Shenzhen Special Information Co., Ltd. (hereinafter referred to as "Special Information") announced that the company received the "Administrative Penalty and Market Ban Prior Notice" issued by the Shenzhen Securities Regulatory Bureau.
According to the "Notice", in order to fulfill its performance commitments, Shenzhen Tefa Dongzhi Technology Co., Ltd., a subsidiary of Tefa Information, falsely increased revenue, inflated or reduced operating costs and profits by adjusting operating costs across periods and fictitious business, which led to false records in the annual reports from 2015 to 2019 disclosed by Tefa.
According to the indicative announcement issued by the special information on the same day, the company's shares will be suspended for one day from the market open on May 13, 2024 (Monday), and will resume trading from the market open on the next day and be subject to other risk warnings, and the stock abbreviation will be changed from "special information" to "ST special information".
5 consecutive years of financial fraud
The financial fraud of the special information disclosed this time originated from the company's acquisition of the special development of Dongzhi nine years ago.
On April 8, 2015, Tefa Information signed the Agreement on Purchasing Assets by Issuing Shares and Paying Cash to purchase assets by paying cash and issuing shares with Chen Chuanrong and other four shareholders of Shenzhen Dongzhi Technology Co., Ltd. (later renamed as Shenzhen Tefa Dongzhi Technology Co., Ltd., hereinafter referred to as "Tefa Dongzhi") to purchase 100% of the equity of Tefa Dongzhi by paying cash and issuing shares.
On the same day, Tefa Information signed the "Profit Compensation Agreement" with three natural person shareholders of Tefa Dongzhi, and the three natural person shareholders promised that the cumulative net profit of Tefa Dongzhi in the three years from 2015 to 2017 would not be less than 143 million yuan, and Chen Chuanrong separately supplemented that the net profit of Tefa Dongzhi in 2018, 2019 and 2020 would not be less than 58.6 million yuan.
On November 4, 2015, Tefa Dongzhi completed the equity change and became a wholly-owned subsidiary of Tefa Information. Since November 30, 2015, the company has included the company in its consolidated financial statements.
According to the "Notice", after investigation, in order to complete the performance commitment, Tefa Dongzhi has inflated revenue, inflated or reduced operating costs and profits by adjusting operating costs and fictitious business across periods.
In terms of inter-period adjustment of operating costs, from 2015 to 2019, Tefa Dongzhi reduced or inflated operating costs by undercounting or delaying the recording of customer sales and purchases, and adjusting operating costs across periods. Among them, from 2015 to 2018, the operating costs were inflated by 10.3933 million yuan, 91.7346 million yuan, 56.2461 million yuan, and 11.6292 million yuan, respectively, and the inflated operating costs were 64.9477 million yuan in 2019.
In terms of fictitious business, in 2019, Tefa Dongzhi fictitiously sold business with Shenzhen Youhua Communication Technology Co., Ltd. and China Mobile Communications Group Terminal Co., Ltd. by forging purchase orders and related logistics documents, inflating operating income by 328 million yuan, operating costs of 284 million yuan, and inflating total profits by 43.8671 million yuan.
The "Notice" disclosed that the above-mentioned behaviors of Tefa Dongzhi led to an inflated total profit of 10.3933 million yuan, 91.7346 million yuan, 56.2461 million yuan and 11.6292 million yuan respectively from 2015 to 2018, with a total inflated increase of more than 170 million yuan in four years. The total profit in 2019 decreased by 21.0806 million yuan, accounting for 8.17%, 34.74%, 16.58%, 3.29% and 5.33% of the total disclosed profit in the current period, respectively.
The reporter of CCTV Capital Eye combed and found that on April 30, 2022, the special information disclosed the "Announcement on the Correction of Accounting Errors in the Previous Period", retrospectively adjusting the financial statements from 2015 to 2020.
On July 20, 2022, the special information received a warning letter from the Shenzhen Securities Regulatory Bureau. According to the Shenzhen Securities Regulatory Bureau, the special information and relevant personnel should effectively strengthen the control of subsidiaries to ensure the truthfulness, accuracy and completeness of the information disclosed by listed companies. On the same day, the special information issued an announcement stating that it had received the "Notice of Case Filing" issued by the Shenzhen Municipal Public Security Bureau, and that the public security organs believed that the case of Chen Chuanrong was suspected of contract fraud and that the conditions for filing the case were met and that the case had been filed for investigation.
It is proposed to impose a total fine of 23.5 million, and the three people are proposed to be banned from the securities market
According to the facts, nature, circumstances and degree of social harm of the special information violation, and in accordance with the relevant provisions of the Securities Law, the Shenzhen Securities Regulatory Bureau intends to decide to give a warning to the company and impose a fine of 8 million yuan.
In addition, the Shenzhen Securities Regulatory Bureau intends to decide to give warnings to Jiang Qinjian, Chen Chuanrong, Yi Zongxiang, Yang Hongyu, Li Zengmin, Zhang Dajun, Wang Ling, and Liu Ying, and impose fines of 4 million yuan, 3.5 million yuan, 2 million yuan, 1.5 million yuan, 1.5 million yuan, 1 million yuan, 1 million yuan, 1 million yuan, and 1 million yuan on the relevant responsible persons.
After calculation, the Shenzhen Securities Regulatory Bureau intends to decide to fine a total of 23.5 million yuan on the special information and related responsible persons.
The Shenzhen Securities Regulatory Bureau stated that Jiang Qinjian, Chen Chuanrong, and Yi Zongxiang's illegal acts were relatively serious, and it was planned to decide to impose a 10-year ban on Jiang Qinjian's entry into the securities market, an 8-year ban on Chen Chuanrong, and a 6-year ban on Yi Zongxiang.
The Shenzhen Securities Regulatory Bureau pointed out that Jiang Qinjian, who was the chairman or general manager of Tefa Information at the time and concurrently the chairman or director of Tefa Dongzhi, failed to take effective measures to manage Tefa Dongzhi, indulged in relevant financial management issues, and ensured that the annual reports of Tefa Information from 2015 to 2019 were true, accurate and complete, and was not diligent and conscientious, and was a directly responsible supervisor; Chen Chuanrong was the director and general manager of Tefa Dongzhi at the time, and was the obligor of performance commitment compensation, responsible for the overall operation and management of Tefa Dongzhi, and organized and planned the financial fraud, and Yi Zongxiang was the director and deputy general manager of Tefa Dongzhi at the time, and organized and planned the financial fraud.
According to the indicative announcement issued by the special information, the company's shares will be suspended for one day from the opening of the market on May 13, 2024 (Monday), and will resume trading from the opening of the market on the next day and be subject to other risk warnings, the stock abbreviation will be changed from "special information" to "ST special letter", the stock code will remain unchanged, it will still be "000070", and the stock trading day will be limited to 5%.
The special information said in the announcement that the company's board of directors will continue to urge the management to actively take effective measures to eliminate the impact of relevant matters on the company as soon as possible, and strive to withdraw the risk warning as soon as possible in accordance with the requirements of the specification. (CCTV Capital Eye)
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