Shocked! ＂Faking＂ 11.9 billion Kangdexin angered the CSRC： it is planned to be punished!
CCTV News:In the past, financial fraud of listed companies mostly inflated profits or used mergers and acquisitions, but the fraud of a company like Kangdexin is rare.
In May 2019, Zhong Yu, the company’s major shareholder and actual controller, was criminally compulsory by the police.
On July 5, the CSRC held a regular press conference to impose administrative penalties and inform the market that there were false records and major omissions in the annual report of the listed company Kangde.
What happened after all?
The CSRC intends to punish the relevant responsible person for life-long market ban on Kangdexindingge.
On July 5, the CSRC held a regular press conference to impose administrative penalties and inform the market that there were false records and major omissions in the annual report of the listed company Kangde.
Chang Depeng, spokesman of the CSRC: Kang Dexin’s illegal information disclosure has a long duration, huge amount involved, extremely bad means and particularly serious illegal circumstances. The CSRC has served the parties involved with the advance notice of administrative punishment and market ban, and intends to punish Kang Dexin and the main responsible personnel within the scope stipulated in the Securities Law, and take measures of lifelong market ban.
According to reports, from 2015 to 2018, Kangdexin inflated operating costs, R&D and sales expenses through fictitious procurement, production and other R&D expenses, and inflated profits by 11.9 billion yuan through these methods.
Kang Dexin is also suspected of failing to disclose related transactions of non-operating funds occupied by controlling shareholders in relevant annual reports, providing guarantees for controlling shareholders, and failing to truthfully disclose the use of raised funds.
The above behavior led to false records and major omissions in the relevant annual reports disclosed by Kangdexin.
The whereabouts of Kangdexin’s 12.2 billion cash is a mystery.
In July 2010, Kangdexin (now *ST Kangde) was listed on the A-share market as "the world’s largest pre-coated film manufacturer".
In May 2019, Zhong Yu, the company’s major shareholder and actual controller, was criminally compulsory by the police. According to the analysis, Zhong Yu’s detention may be related to the 12.2 billion deposits that *ST Kangde recently broke out.
At the beginning of this year, Kang Dexin, who had a huge amount of cash on his account, was unable to pay due bonds, and the corporate debt crisis was officially kicked off.
On April 30, 2019, *ST Kangde disclosed its 2018 annual report. According to the annual report, the company’s book monetary fund is 15.316 billion yuan, of which 12.21 billion yuan is deposited in Bank of Beijing Xidan Sub-branch.
However, the company’s three independent directors and accounting firms strongly questioned the authenticity of the deposit of 12.2 billion yuan. With the serial inquiries of Shenzhen Stock Exchange, the agreement between *ST Kangde and Bank of Beijing was exposed.
It turns out that Kangde Investment Group, the controlling shareholder, signed the Cash Management Cooperation Agreement with Bank of Beijing, and its account balance is managed according to zero balance, that is, all the funds in each sub-account are collected into Kangde Investment Group’s account.
This means that the listed company *ST Kangde has 12.2 billion yuan in the account, but according to the setting of the linkage account, the money will be transferred to the group parent account of the controlling shareholder.
This led to the company’s online banking showing that 12.2 billion yuan was deposited in Bank of Beijing Xidan Sub-branch. However, Xidan Sub-branch replied that "the account balance is zero". On May 10th, Kang Dexin replied to the letter of concern of Shenzhen Stock Exchange, saying that it is impossible to determine whether the company’s funds have been occupied by Kang Dexin Investment Group for non-operation.