Fenghua Hi-Tech recently announced that the company received the decision of the Guangdong Regulatory Bureau of the China Securities Regulatory Commission to issue a warning letter to the company and the company's current or current six-member directors. The warning letter indicates that Fenghua Hi-Tech has major accounting errors and caused the company to return in 2016. The net profit of the mother was reduced by 52,795,500 yuan.
The event will be traced back to 2015. In December 2015, Fenghua Hi-Tech will be responsible for Guangzhou Xinde Electronics Co., Ltd. (hereinafter referred to as Xinde Electronics) and Guangzhou Tianhe High-tech Industrial Development Zone Huali Technology Development Co., Ltd. (hereinafter referred to as Huali Technology). A total of 8.504 million yuan of receivables was transferred to a third-party company, and the transfer price was 6,803,200 yuan.
In January 2016, Fenghua Hi-Tech transferred the original price of the receivables of Guangdong Xinyu Financial Information Technology Co., Ltd. (hereinafter referred to as Xinyu Finance) and Guangzhou Yali Electronics Co., Ltd. (hereinafter referred to as Yali Electronics) to a third-party company. Fenghua Hi-Tech said that it received the above two creditor's rights transfer payments in March 2016. In December 2017, Fenghua Technology decided to repurchase the above-mentioned 54.686 million yuan of claims and paid the transfer payment in February 2018. The above-mentioned transfer of creditor's rights did not take place in substance, and the creditor's rights at the time of transfer were already expected to be recovered on schedule.
Fenghua Hi-Tech held a president's office meeting on March 1, 2016 to study and determine the disposal plan for the total of 63.19 million yuan of receivables from the four companies involved in the above accounting error adjustment. Thereafter, Fenghua Hi-Tech was again on December 12, 2016. And held a meeting on December 26, 2017 to study and determine the follow-up treatment plan for the above matters. However, the relevant matters involved in the above three meetings have not been submitted to the board of directors for review and disclosure in accordance with relevant regulations.
After retrospective restatement, Fenghua Hi-Tech's net profit attributable to the parent company in 2016 was changed from 138.906 million yuan before adjustment to 86.116 million yuan after adjustment.
The Guangdong Regulatory Authority pointed out that Feng Huagao was the chairman of the board of directors, Xing Jianchao, the current president Wang Jinquan, and the then chief financial officer Liao Yongzhong should bear the main responsibility for the above-mentioned major accounting errors; the current director Li Zezhong, Xing Jianchao, the current president Wang Jinquan, Dong Secretary Chen Xuyun shall bear the primary responsibility for failing to perform the deliberation process and information disclosure of the board of directors; the current chairman of the board of directors Wang Guangjun, the president Wang Jinquan and the director of the board of directors Chen Xuyun shall bear the primary responsibility for the postponement of the disclosure, and the Guangdong Regulatory Authority shall issue a warning letter to the above six persons.
It is reported that Liao Yongzhong, former financial director of Fenghua Hi-Tech, submitted his resignation in July 2017 and left the company. Former director Xing Jianchao resigned in February this year for personal reasons.