Why are mergers and acquisitions of toxic assets so common? Why does the internal control mechanism of listed companies, the shutdown system of intermediary agencies, the deterrence mechanism of laws and regulations, and the market mechanism of lock-in restrictions on shares, have not prevented the continuous financial fraud by the same means for many years?
Fake to hold up beauty trap
*St victory was founded in 2003 and listed in 2010. After listing, the companys performance increased steadily, with a net profit of 67.59 million in 2012 and 128 million in 2013.
Zhicheng optics is mainly engaged in the R & D, production and sales of LCD window protection glass for mobile intelligent terminals such as mobile phones and tablet computers. After the acquisition in 2015, Zhicheng optical was mainly responsible for 2D / 2.5D glass business. However, in 2019, the companys production and operation will be basically in a state of suspension, with a loss of 890 million.
Behind this sudden change is Zhicheng opticals continuous financial fraud.
On April 28, 2020, * ST successfully announced the correction of accounting errors and retrospective adjustment of relevant financial data of the company, and revised the relevant contents of 2016 annual report, 2017 annual report and 2018 annual report.
From the amount of adjustment data, we can see that the annual reports of listed companies continue to have false growth. Among them, in 2016, accounts receivable increased by 133 million, inventory increased by 71.31 million, goodwill increased by 96.38 million, accounts payable decreased by 26.99 million, and undistributed profit increased by 308 million.
In 2017, accounts receivable increased by 281 million, prepayment increased by 17.54 million, inventory by 180 million, goodwill by 96.38 million, accounts payable by 76.65 million, and undistributed profit by 587 million.
In 2018, accounts receivable increased by 414 million, inventory increased by 221 million, notes payable and accounts payable amounted to 76.05 million, and undistributed profit increased by 667 million.
From the perspective of income and profit, in 2016, the operating income of listed companies increased by 175 million, and the net profit attributable to the parent company increased by 312 million; in 2017, the operating income increased by 152 million, and the net profit attributable to the parent was 298 million; in 2018, the operating income was increased by 110 million, and the net profit attributable to the parent was 79.84 million.
According to the audit report of special explanation for accounting error correction issued by Tianheng certified public accountants, Zhicheng optics issued value-added tax invoice and did not give it to relevant customers, resulting in false sales materials, resulting in false income and inconsistent transactions. In addition, in order to adjust the profit, some materials of Zhicheng optical were not recorded in the account, which led to the inconsistency in the inventory at the end of the year, the inconsistency between the suppliers check and the cost.
Use the same trick for three years.
During the merger and acquisition in 2015, all nine natural person shareholders including Wang hancang of Zhicheng optics made a profit commitment, and the net profits returned to the parent from 2015 to 2017 were no less than 40 million, 45 million and 55 million respectively. Obviously, after the merger, the Chi Cheng optical management team chose to blow the dazzling bubble in the form of financial fraud.
According to the announcement of listed companies, Wang hancang has been the executive director and general manager of Zhicheng optics since 2011, holding 32.34% of the equity of Zhicheng optics.
Double strike of administration and criminal
*St Shengli explained the reasons for the retrospective adjustment in the announcement on the correction and retrospective adjustment of previous accounting errors as: in view of the fact that Tianheng accounting firm failed to obtain sufficient and appropriate audit evidence on the authenticity and integrity of sales revenue and inventory of Zhicheng optics, a wholly-owned subsidiary of the company, the company carefully reviewed the financial data of Zhicheng optics in 2016, 2017 and 2018 Check and correct the relevant subjects involved in the early financial statements of Zhicheng optics in time.
The above description directly throws off the pot of audit institutions, but the responsibility of listed companies and relevant responsible persons in respect of false credit such as annual reports is still difficult to escape.
According to the analysis of the reporters by insiders, it can be seen from the punishments of Kangni electromechanical and Ningbo Dongli that the CSRC has imposed penalties on listed companies and merger targets. However, considering the seriousness of the circumstances, as the main responsible party for fraud, the target company is subject to heavier punishment.
After being listed in 2014, in order to break through the bottleneck of main business and seek the development of dual main industry, Kangni began to seek merger and acquisition expansion in the second half of 2015. In 2017, the company completed the acquisition of Longxin technology at a relatively fast speed.
On June 22, 2018, Kangni machinery and Electrical Co., Ltd. disclosed to Shanghai stock exchange that Liao Liangmao, chairman and general manager of Longxin technology, a subsidiary, was suspected of using his position to facilitate illegal external guarantee in the name of Longxin technology. After the regulatory intervention investigation, it was found that Longxin technology not only had the pledge problem of fixed deposit certificate of RMB 304.5 million, but also significantly increased its income and profits.
In May this year, the CSRC issued a notice of punishment, believing that Longxin technology had financial fraud, while Connies restructuring report (Draft) and restructuring report disclosed the above-mentioned false financial information for many times, in violation of the securities law and the reorganization measures.
In the end, the SFC ordered Kangni to make corrections, gave a warning and imposed a fine of 300000 yuan; Liao Liangmao was given a warning notice, fined 300000 yuan and banned from the securities market for 10 years. In addition, a number of senior executives of Kangni electromechanical and the main responsible person of Longxin technology were also given a warning and fined with different amounts.
For the illegal information disclosure behavior of Ningbo Dongli after the completion of major asset restructuring, the CSRC ordered Ningbo Dongli to correct, give a warning, and impose a fine of 300000 yuan, warn the relevant responsible person and impose a fine of 300000 yuan, 200000 yuan and 30000 yuan respectively.
Li Wenguo, the actual controller of Nianfus supply chain, Yang Zhanwu, general manager, and Liu Bin, chief financial officer, were respectively banned from the market for life, and several responsible persons were respectively banned from entering the market for 10 years. It is particularly noteworthy that in the merger and acquisition case of koni electromechanical and Ningbo Dongli, the responsible person of the subject party faces criminal punishment in addition to the administrative penalty. After Kangni electromechanical reported the case to the Public Security Bureau, the public security organ formally filed a case against Liao Liangmaos suspected contract fraud crime, and Liao Liangmao was officially arrested for suspected criminal crime. Li Wenguo, the actual controller of the target party of Ningbo Dongli merger and acquisition, was sentenced to life imprisonment by Ningbo intermediate peoples Court of Zhejiang Province in January 2020 for committing the crime of contract fraud, depriving him of political rights for life and confiscating all his personal property. Source: editor in charge of Finance and Economics: Zhong Qiming_ NF5619
Li Wenguo, the actual controller of Nianfus supply chain, Yang Zhanwu, general manager, and Liu Bin, chief financial officer, were respectively banned from the market for life, and several responsible persons were respectively banned from entering the market for 10 years.
After Kangni electromechanical reported the case to the Public Security Bureau, the public security organ formally filed a case against Liao Liangmaos suspected contract fraud crime, and Liao Liangmao was officially arrested for suspected criminal crime.
Li Wenguo, the actual controller of the target party of Ningbo Dongli merger and acquisition, was sentenced to life imprisonment by Ningbo intermediate peoples Court of Zhejiang Province in January 2020 for committing the crime of contract fraud, depriving him of political rights for life and confiscating all his personal property.