Trainee reporter Wen Yan
On the evening of May 16, ST Huawei announced that the company received the "Notice of Case Filing" from the China Securities Regulatory Commission on the same day due to suspected violations of information disclosure laws and regulations.
On the same day, ST Huawei received a regulatory inquiry letter on information disclosure for the 2023 annual report of the Shanghai Stock Exchange, focusing on the matters involved in the company's 2023 financial report and internal control report being issued with non-standard audit opinions, and supplemented the disclosure of more information.
Previously, there were many doubts about the disclosure of information
Before being investigated by the China Securities Regulatory Commission, ST Huawei was repeatedly questioned about information disclosure.
ST Huawei announced on April 1 that the company's chairman Xia Zengwen is undergoing treatment and recuperation due to physical reasons, and is temporarily unable to perform his duties as chairman normally, and the board of directors recommended director Zhao Dongjun to perform the duties of chairman.
On April 2, the Shanghai Stock Exchange issued a regulatory work letter, clarifying the regulatory requirements for matters related to the temporary inability of the chairman of the company to perform his duties normally.
The reporter found that Zhao Dongjun had already fulfilled the duties of chairman of ST Huawei before the above announcement.
On February 6, ST Huawei announced that the company's board of directors meeting on February 5 should be attended by 5 directors, and 4 directors actually attended. Xia Zengwen did not attend the meeting due to personal health reasons, and was jointly elected by more than half of the directors, and Zhao Dongjun exercised the duties of the chairman.
In addition, in September 2023, ST Huawei received a regulatory work letter from the Shanghai Stock Exchange, involving matters related to complaints against the company.
The Shanghai Stock Exchange received a complaint and report that Zeng Tao, the actual controller of ST Huawei, the controlling shareholder Shanghai Pengsheng Technology Industrial Co., Ltd., and the chairman Xia Zengwen have misappropriated and embezzled large amounts of funds from listed companies through Shanghai Bensai Industrial Co., Ltd. (later renamed Shanghai Fravo Technology Co., Ltd. and cancelled) and other entities for a long time, and are suspected of fraudulent issuance of allotments, etc., and the previously disclosed periodic reports are suspicious.
After several postponements, ST Huawei replied to the regulatory work letter in November 2023 to confirm that the data in the financial report for the first to third quarters of 2015 was wrong due to omissions, and the relevant information of the first quarter, semi-annual report and third quarter report of 2015 needs to be corrected.
The Shanghai Stock Exchange inquired about non-standard matters
On May 16, ST Huawei received a regulatory inquiry letter on information disclosure in the 2023 annual report of the Shanghai Stock Exchange, focusing on the audit report of the company's 2023 financial report and internal control report that were issued with qualified and negative opinions respectively (collectively referred to as "non-standard audit opinions").
On April 30, ST Huawei was issued an audit report with a negative opinion due to the 2023 internal control report, and other risk warnings were implemented from May 6 in accordance with relevant regulations, and as of May 16, it has been subject to 9 consecutive fall limits.
According to the annual report, ST Huawei's 2023 financial report and internal control report were issued with non-standard audit opinions, mainly because the unsettled amount of 504 million yuan in the book balance of its construction projects and the book balance of other non-current assets included 981 million yuan of purchase payments paid in previous years, etc., and the commercial substance of a total of 1.484 billion yuan of payments was doubtful.
The SSE requires ST Huawei to disclose the specific circumstances of the funds involved in the non-standard audit opinion, including the basic information such as the name of the payee, the time of establishment, the registered capital, the main business, and the relationship with the company, as well as the transaction content, payment amount, payment time, internal approval process and specific handler, and clearly state whether the above-mentioned funds flow directly or ultimately to the related party and whether it constitutes the occupation of non-operating funds by the related party.
According to the annual report, Zhonghua questioned the commercial substance of the above-mentioned 1.484 billion yuan related payment, mainly due to the inability to implement effective audit procedures and other reasons.
Zhonghua needs to disclose the reasonableness of the audit procedures adopted for the matters involved in the non-standard audit opinion, the audit evidence obtained, the reasons for the failure to obtain audit evidence, the reasons for not taking or unable to adopt alternative audit procedures, and the failure to implement effective audit procedures.
Editor: Xiao Mo
Review: Muyu