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Audit Discloses Appalling Mismanagement in Listed Company
Auditors have discovered appalling mismanagement, falsification, and misappropriation of funds in the Hainan Huaqiao Investment Co., Ltd., a company listed on the Shanghai Stock Exchange.
According to China Securities Newspaper, an audit conducted upon former company chairman Zhao Kai found that the company was very badly managed, with its financial management in total disorder and many accounting and contract files missing.
Also during Zhao's term, the company is suspected of using 90 million yuan in public funds for stock investment and claiming a false profit of 200 million yuan and equity capital for three million shares.
The company in south China's Hainan Province also had off-the- books debts of 400 million yuan, and had been producing false accounts for years.
According to the report, similar audit conducted upon former general manager Li Shixiang found that Li may have misappropriated nearly 10 million yuan in company funds, and deliberately wrote enormous false accounts.
Chen Xiaocheng, the company's financial manager, was also found to have loaned out huge amounts of cash, but could not reasonably explain where this money went.
The board of directors have requested that securities regulators and the judicial authorities become involved in further investigations, the newspaper said.
The company's 1999 annual report shows that its operations have completely collapsed, and that by the end of 1999, the company was actually bankrupt, with its stock placed under special treatment by the Shanghai Stock Exchange.
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