The scope of the listed company's Jin Tongling fraud case is still expanding.
On the evening of May 13, the Jiangsu Securities Regulatory Bureau announced two administrative law enforcement decisions.
According to the "Administrative Penalty Decision", after investigation, Dahua Certified Public Accountants (hereinafter referred to as "Dahua") audited Jin Tongling's annual financial statements from 2017 to 2022, there were major deficiencies in the risk assessment and internal control testing procedures, failure to take appropriate audit measures to deal with fraud risks, material deficiencies in substantive procedures, violations of relevant practice standards, failure to perform due diligence obligations, and false records in the audit report issued. Another "Market Ban Decision" shows that the two certified public accountants who signed the audit report of the annual financial statements of Jin Tongling Company were banned from the market.
On the same day, the official WeChat public account of Dahua Certified Public Accountants issued a document stating that on May 10, the Jiangsu Supervision Bureau of the China Securities Regulatory Commission issued an administrative penalty decision to Dahua Certified Public Accountants: Dahua Certified Public Accountants failed to be diligent and conscientious during the audit of the annual financial statements of Jintongling Technology Group Co., Ltd., and imposed administrative penalties on Dahua Certified Public Accountants and related personnel in accordance with the law.
UOB was suspended from engaging in securities services business for 6 months
Jin Tongling, a listed company involved in Dahua, was filed by the China Securities Regulatory Commission as early as last year.
On June 27, 2023, Jin Tongling announced that it had received the "Notice of Case Filing" from the China Securities Regulatory Commission, and that the China Securities Regulatory Commission decided to file a case against the company in accordance with the "Securities Law of the People's Republic of China", "Administrative Punishment Law of the People's Republic of China" and other laws and regulations due to the company's suspected illegal information disclosure.
On November 21, 2023, Jin Tongling issued an announcement on the receipt of the "Advance Notice of Administrative Punishment". According to the notice, Jin Tongling and a number of its wholly-owned subsidiaries falsely increased or reduced their total operating income and profits by forging the project image progress confirmation form and invoices. From 2017 to 2022, Jintongling's inflated or inflated total profits accounted for 103.06%, 133.10%, 31.35%, 101.55%, 5774.38%, and 11.83% of the company's total disclosed profits (absolute value) in each year, respectively, resulting in false records in the company's annual reports for the corresponding years.
Jin Tongling, who has been counterfeiting for many years, received the "Administrative Penalty Decision" from the Jiangsu Securities Regulatory Bureau at the beginning of this year. At the same time, Huaxi Securities, the sponsor of its non-public offering of shares in 2019, recently announced that it was suspended for 6 months from the regulatory measures of sponsor business qualifications.
According to the administrative law enforcement decision issued by the Jiangsu Securities Regulatory Bureau, Dahua Certified Public Accountants (Special General Partnership) was ordered to make corrections, confiscated 6.8868 million yuan of business income, imposed a fine of 34.434 million yuan, and suspended the securities service business for 6 months; gave warnings to Fan Rong, Yan Lisheng, and Hu Zhigang, who signed the certified public accountants at the time, and imposed fines ranging from 400,000 yuan to 1.5 million yuan.
More than 10 A-share companies urgently announced the cancellation of cooperation
According to public information, Dahua was founded in 1985 and is one of the largest accounting firms in China, and is one of the first batch of firms in China to be approved to engage in H-share listing audit qualifications. However, in recent years, due to false records in the annual audit reports of many listed companies such as Zhangzidao, Dahua has been punished by regulators many times.
In a statement issued on May 13, Dahua said that as a domestic accounting firm with a certain scale and influence after 40 years of development and tempering, the punishment reflects the gap in our firm in dealing with the new situation, new tasks and new challenges, and the shortcomings in risk awareness, internal governance and quality control. We are deeply saddened and ashamed of this, apologize to our customers and partners who have been affected by this, and express our deep gratitude to our partners from all walks of life who have given us unwavering support and trust during this difficult period.
It is worth noting that recently, a number of listed companies, including Boss Software, Kuncai Technology, Haixin Food, Power Diamond, Taiji Co., Ltd., Zhongyuan Internal Distribution, etc., have issued announcements to cancel their cooperation with Dahua.
On the evening of May 13, Taiji announced that the company held the 18th meeting of the fifth board of directors on May 13, 2024, and the meeting deliberated and passed the "Proposal on Canceling Part of the Proposals for the 2023 Annual General Meeting of Shareholders". In view of the fact that the recent relevant matters of the proposed accounting firm have yet to be further verified by the company, after consultation between the company and Dahua Certified Public Accountants (special general partnership), based on the principle of prudence, after deliberation, it has decided to cancel the 7th proposal "Proposal on the Renewal of the Accounting Firm" originally scheduled to be submitted to the 2023 annual general meeting of shareholders for deliberation.
On the evening of May 13, Power Diamond also issued an announcement stating that in view of the fact that the recent relevant matters of the proposed accounting firm have yet to be further verified by the company, after consultation between the company and Dahua Certified Public Accountants (Special General Partnership), based on the principle of prudence, after research, it was decided to cancel the 6th proposal originally scheduled to be submitted to the 2023 Annual General Meeting of Shareholders for deliberation, "Proposal on Re-appointing Dahua Certified Public Accountants (Special General Partnership) as the Company's 2024 Annual Audit Institution".
Source: Financial Times client
Reporter: Zhao Yang
Editor: Duan Jiaxi
Email: [email protected]