Zhongxin Holdings said that the company believed that the misappropriation was not caused by the systematic error of pioneer payment, and that the misappropriation was suspected to be due to improper modification of computer code by some management.
Regulatory requirements to fill in misappropriated funds, or revoke the license
In July 2019, due to the suspected misappropriation of funds, Chinese government agencies immediately accused pioneer of non-compliance of payment, temporarily suspended its operation and conducted on-site inspection.
At the beginning of April 2020, the internal investigation of Zhongxin holdings revealed that at the relevant time, the relevant senior management of pioneer payment (who is the third party of the group) improperly changed the credit limit of the customer in Pioneer payment without authorization, and embezzled funds from the trust fund of pioneer payment.
At that time, the head of risk management of a payment agency told the 21st century economic news: its very awkward to write and cant understand. From the literal point of view, the relevant senior management of the customer is the customer companys, but in fact it may be the pioneers internal, how can outsiders change the quota?
In the latest announcement, China new holdings tried to clear its relationship with the misappropriated funds. For example, as of the date of this report, the Chinese government agency has not issued any warning, penalty or accusation against Xianfeng payment, in addition, the senior management of the group has not been charged; according to the investigation findings of the above causes and process of non-compliance, there is no evidence that Xianfeng payment has benefited from the misappropriation of funds; the group does not hold any shares in jingxun, meanwhile, after News also does not hold any shares in the group; the relationship between the group and news is that news is one of the thousands of customers of pioneer payment, and pioneer payment provides capital recharge and payment services for them; and so on.
Zhongxin holdings also disclosed that, considering that pioneer payment is a wholly-owned subsidiary of the company, the Chinese government agency requires the company to fill in the misappropriated funds; otherwise, if the misappropriated funds are not filled within a reasonable time, pioneer payment will not be allowed to resume its operation and the business service license of pioneer payment will be revoked.
Therefore, Zhongxin holdings also disclosed possible remedial measures. The first is to retain the business service license paid by pioneer and resume its normal operation in a short period. With the approval of the Chinese government in principle, the company has discussed with relevant parties its (on behalf of economic information) plan to fill in the misappropriated funds. It is expected that the plan will be a very significant sale, including the sale of the capital A subsidiary of the company whose consideration will be used to cover the misappropriated funds and shall be repaid in full upon inquiry.
Another possible remedy will be taken in two cases: the company fails to reach an agreement with or obtain the consent of the parties related to the very significant sale matters two months before the deadline for the implementation of the resumption guidance and the additional resumption guidance; or the very significant sale matters fail to be completed.
Then, pioneer payments business service license is likely to be revoked, and pioneer payment will be forced to stop operation.
Zhongxin holding lost more than 60 million yuan in the first quarter
Earlier, Zhongxin holdings disclosed its first quarter report in 2020. For the three months ended March 31, 2020, the group reported revenue of about 93.8 million yuan, a year-on-year decrease of 82.2%. The decrease was mainly due to the decrease in revenues from online investment and technology-driven loan services, third-party payment services, traditional loan and financing services and other segments of about 264.2 million yuan, 115.5 million yuan, 44.5 million yuan and 9.9 million yuan, respectively. Therefore, in the first quarter of 2020, the loss of Zhongxin holdings is about 63.3 million yuan.
In addition, since February this year, many local public security departments have filed a case against pioneer Yinghua wealth and network information platform branch.
On June 19, pioneer investors in Qingdao told 21st century economic news that Qingdao public security also filed a case against Yinghua wealth Qingdao Branch on suspicion of illegally absorbing public deposits.