Listed Company Fined One Million Yuan for FraudVitality 28, a well-known detergent producer listed on the Shanghai Stock Exchange, has been fined one million yuan for fabricating profits and committing other acts of fraud, media reports said Wednesday, December 20.Former chairman Lei Shizhong, and members of the board of directors Yao Lin, Ai Bingcheng and Ding Chengrong were fined and admonished for their roles in the fraud. According to findings by the China Securities Regulatory Commission, the company based in Shashi City of Hubei Province, fabricated 16.68 million yuan in non-existent profit on its listing application. In the three years after its listing, the company reported a total of 211.24 million yuan in false profit. The regulators also found that the company had sealed a deal with a German company for a detergent joint venture before its listing, but it concealed this important fact from its application documents. In May 1996, the company pledged in its prospectus to invest 145.2 million yuan on three major projects, but investigation by the regulators revealed that all the proceeds from the initial public offering were spent on other purposes. The company was also accused of fabricating bank receipts of up to 23.2 million yuan in an announcement in 1998. The company said the money was from the State Asset Management Bureau of Jingzhou City for the purchase of four million shares, but the money was not actually paid until 1999. |
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