Hongwei Technologies

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#1
Another S Chip in trouble...
http://info.sgx.com/webcoranncatth.nsf/V...300385AB4/$file/Hongwei_auditissues.pdf?openelement

HONGWEI TECHNOLOGIES LIMITED

AUDIT ISSUES


The Board of Directors of Hongwei Technologies Limited (the “Company”) wishes to
announce that the Board has received information from its auditors, Messrs. Ernst & Young
LLP, regarding issues pertaining to the cash and bank balances confirmation in its subsidiary
company in China, namely Shuangli (Xiamen) Polyester Co., Ltd. The Company’s Audit
Committee has immediately commenced a fact-finding process to address the auditors’
concerns.

To this end, the Company has appointed the auditors to carry out an expanded scope audit.

The Company’s Audit Committee is currently working to resolve these audit issues and will be
taking necessary measures to safeguard the Company's assets. The full Board (save for the
Executive Chairman, Mr Lin Jimiao and Mdm Zhuang Xinxin) has been in discussion. The
Audit Committee is also working to obtain the full co-operation from the Executive Chairman,
Mr Lin Jimiao (who is also the Legal Representative of the Subsidiaries) in this regard. The
Company is unable to comment on the matter at present. Nonetheless, the Company will
continue to keep shareholders updated of any further development.

The Company will also apply to the Singapore Exchange Securities Trading Ltd (“SGX-ST”)
for an extension of time in relation to Rule 705(1) of the Listing Manual which relates to the
requirement of the Company to announce its full financial year results for the year ended 31
December 2010 (“FY2010”) no later than 1 March 2011.

The Company will make further announcements promptly as and when there are material
developments.

Trading of shares in the Company has been halted on 24 February 2011. Meanwhile, the
Company has requested for the trading halt to be converted into a suspension of trading of
the Company’s shares on SGX-ST.

BY ORDER OF THE BOARD
Gui Kim
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#2
so soon, another going to bite the dust.

with more pressure coming, more s chips could bite the dust sooner than later.
Reply
#3
The funny bit is that their directors purchased 5.7 million shares in Nov and Jan ???????
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#4
(26-02-2011, 08:50 PM)Nick Wrote: The funny bit is that their directors purchased 5.7 million shares in Nov and Jan ???????

Perplexing ain't it?

Tembusu Partners is listed as a shareholder. Tembusu is linked to Lim Hwee Hua & Yeo Cheow Tong.
Reply
#5
horror of horrors. investigations revealed that the 130m rmb cash is likely to be bogus.

when will trading resume?
Reply
#6
So much for having a Big Four auditor, Ernst & Young, to bless the books.

To quote Freddie Mercury:

Another one bites the dust.

With apologies to Pete Seeger:

Where has all the money gone?
Long time passing
Where has all the money gone?
Long time ago
Where has all the money gone?
Gone to S-Chips every one
When will we ever learn?
When will we ever learn?

Where have all the S-Chips gone?
Long time passing
Where have all the S-Chips gone?
Long time ago
Where have all the S-Chips gone?
Gone to scandals every one
When will we ever learn?
When will we ever learn?

Where have all the scandals gone?
Long time passing
Where have all the scandals gone?
Long time ago
Where have all the scandals gone?
Still in China every one
When will we ever learn?
When will we ever learn?
Reply
#7
Business Times - 24 Oct 2011

KPMG uncovers fraud in Hongwei records


Bank statements and sales tax invoices fabricated, it says

By JAMIE LEE

MANY of Hongwei Technologies' recent bank statements and sales tax invoices have one thing in common: they're fake.

In a damning special auditor's report released last Saturday, KPMG told of 'templates' found in the company's records used to create false bank statements; an apparent scheme run by a bank officer - and blessed by Hongwei's executives in China - to use millions held in one account to cover the loans of other firms; and an undisclosed father-son relationship between one of Hongwei's suppliers and its executive director.

'Taken in totality, the evidence seriously undermines the integrity of the accounting records provided to use for our review,' said KPMG, concluding that documents have been doctored 'in accordance with the agenda of certain individuals within the group'.

KPMG's seven-month- long investigation came after Hongwei said in February that its auditors could not confirm cash and bank balances in a subsidiary in China, Shuangli (Xiamen) Polyester Co. Trading in the shares of the Chinese polyester fibre maker listed in 2005 have been suspended since.

KPMG highlighted 'material irregularities' with the bank statements it had received. Of the statements from six banks, only that from Singapore's United Overseas Bank (UOB) appears real, it noted. The other five are Chinese banks.

The bank statements for accounts held by another subsidiary, Xiongjin, in Citic Bank's Xiamen branch between January and February 2011 had four transactions dated 2010.

And 12 bank statements from the Industrial Commercial Bank of China had page numbers running sequentially - even though they were supposed to be issued independently.

Shuangli's reported bank balance of 55.3 million yuan (S$11 million) as at Dec 31, 2010 is, according to the Chinese management, almost all gone.

A bank officer at Xiamen Bank Xiangyu sub-branch had used the monies in the account to 'temporarily repay loans of other companies which had fallen due', KPMG was told.

'The company's Chinese management also informed us that they were fully aware of this scheme and had allowed it to take place,' it added.

Just 280.63 yuan could be left in the account.

Xiamen Bank, which holds 130 million yuan that Hongwei claims it had as at end-December 2010 - or nearly all of its funds then - has not sent bank confirmations to KPMG. The bank has not confirmed the explanation by Hongwei's Chinese executives either, said KPMG.

'We have grave doubts regarding the cash balances of the group,' it added.

The auditors uncovered soft-copy 'templates' - some of which had been deleted prior to the computers being delivered to the auditors - of bank statements and sales tax invoices that created documents 'which markedly resembled the official documents in format and layout'.

Notably, about 218 million yuan worth of sales from the two subsidiaries Shuangli and Xiongjin between December 2009 and March 2011 involved questionable tax invoices since they were not issued by the two subsidiaries. The sales represented 25 per cent of the total sales then.

'There is no reason for the company to possess such templates as the blank tax invoices would have to be purchased directly from the relevant tax bureau,' KPMG noted.

The company admitted to obtaining false tax invoices. Its explanation that this was part of a sale arrangement was rejected by KPMG as 'implausible and internally inconsistent'.

The auditors also found 'highly suspicious' email message exchanges.

'The attachments to the email appear to demonstrate an ability on the part of the company to 'predict' detailed information relating to sales and purchase transactions which were to take place more than a month later,' KPMG added.

Also, a portion of the 120 million yuan that had been recorded as 'advance payments' to suppliers were, in fact, loans to suppliers that the company's Chinese management aimed to recover by year end. 'We have evidence indicating that the legal representative and majority shareholder of one of the suppliers is the father of one of the company's executive directors,' KPMG said.

The group had bought 31 million yuan worth of raw materials from this supplier for the whole of 2010. It did not get shareholder approval for this interested-person transaction.

Responding to the report, Hongwei's audit committee said the firm has ceased trading with Wanzhong, since the majority owner 'could be' the father of director Lin Jimiao.

'Mr Lin Jimiao should make good any losses that the company has suffered as a result of the above said interested-party transactions with Wanzhong,' the committee said.

It also wants Mr Lin, his wife and another director implicated in the report to resign from the firm. The audit committee is now seeking legal advice.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#8
why only its UOB's bank statements appeared real?
Reply
#9
No resumption proposal on the table, and no proposal of exit offer, so the company is delisted, albeit the liquidators still in operation.

It is likely the shareholders will get nothing back, but a share certificate.

DELISTING OF HONGWEI TECHNOLOGIES LIMITED (IN PROVISIONAL LIQUIDATION)

Further to the announcement released by the Company on 3 December 2013, the Joint Provisional
Liquidators of the Company wish to announce that the Singapore Exchange Securities Trading
Limited (the “SGX-ST”) issued a letter to the Joint Provisional Liquidators on 3 December 2013
stating, inter alia, that the shares of the Company will be delisted from SGX-ST on 3 January 2014. In
addition, SGX-ST requested that the Company make the necessary arrangements for the return of
share certificates to shareholders.
In view of the Company’s insolvent financial position, the Company is unable to propose a cash exit
offer for its shareholders and is unable to comply with the requirements under (i) Rule 1307 of the
SGX-ST Listing Manual to convene a general meeting to obtain shareholder approval for the delisting;
and (ii) Rule 1309 of the SGX-ST Listing Manual to appoint an independent financial adviser to advise
on the exit offer.
The Joint Provisional Liquidators are currently considering their options moving forward and will
provide further updates on material developments as and when appropriate.

Ref: http://infopub.sgx.com/FileOpen/HW_Delis...eID=267389
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply


Forum Jump:


Users browsing this thread: 5 Guest(s)