The jewelry listed company Fujian Ideal Jewellery Industrial Co.Ltd(002740) with a sudden loss of more than 2.4 billion yuan in three years and fierce internal struggle among shareholders has been targeted by regulators again!
February 8 Fujian Ideal Jewellery Industrial Co.Ltd(002740) announced that Millennium jewelry, a subsidiary, violated relevant regulations and issued invoices totaling 194 million yuan to two new energy companies in Jiangxi, with a tax of 25.2253 million yuan and an illegal profit of 262800 yuan. Therefore, the above illegal income was confiscated by the tax department and fined 500000 yuan.
However, the illegal issuance of nearly 200 million invoices is only for the illegal interests of 260000 yuan?
For this vague announcement, the Shenzhen Stock Exchange issued a letter of concern for the first time, asking to explain the specific time point of receiving administrative punishment and whether the letter Phi obligation has been fulfilled in time. In addition, the Shenzhen Stock Exchange also asked to explain whether there was a real transaction in Invoicing, how the accounting treatment was done in the early stage of Millennium jewelry, and whether there was financial fraud in fictitious business.
nearly 200 million invoices are just 260000?
Shenzhen Stock Exchange: financial fraud?
According to the announcement of Fujian Ideal Jewellery Industrial Co.Ltd(002740) , its wholly-owned subsidiary Millennium jewelry “recently received the decision on tax administrative punishment issued by the third Inspection Bureau of Nanjing Taxation Bureau of the State Administration of Taxation”, as follows:
Millennium jewelry issued invoices totaling 194040717.62 yuan to two new energy Co., Ltd. in Jiangxi Province in violation of the relevant provisions of the invoice management measures of the people’s Republic of China, with a tax of 25225292.38 yuan and an illegal profit of 262803 yuan. The above illegal income of 262803 yuan was confiscated by the third Inspection Bureau of Nanjing Taxation Bureau of the State Administration of Taxation and fined 500000 yuan.
As early as Fujian Ideal Jewellery Industrial Co.Ltd(002740) in September 2021, it was announced that Millennium jewelry received the notice on tax matters issued by the third Inspection Bureau of Nanjing Taxation Bureau in May 2020, requiring the inspection of the tax related situation of Millennium jewelry. In May 2021, it supplemented and submitted relevant written complaints, defense reports and other materials. At that time, the company announced that “as of the announcement date, Millennium jewelry has not received the follow-up notice requirements and situation feedback from the tax bureau, and the company has not received the investigation results or punishment decisions of relevant regulatory and law enforcement departments”.
For such a tax related investigation that lasted more than one and a half years, the company now “explained” it in a few words, which immediately attracted the attention of Shenzhen Stock Exchange.
Shenzhen stock exchange requires the company to explain the specific time of receiving the prior notice of relevant administrative punishment and the decision of administrative punishment, whether it is consistent with the reply of the company’s inquiry letter in September 2021, and whether the company has timely fulfilled the obligation of information disclosure on matters related to this administrative punishment. In addition, whether the two new energy companies in Jiangxi Province and their major shareholders are related to the company and its directors, supervisors and senior managers, or to the controlling shareholders, actual controllers, shareholders holding more than 5% shares and their directors, supervisors and senior managers, they are also required to explain.
In addition, nearly 200 million illegal invoices only run for 260000 yuan of illegal profits?
Shenzhen stock exchange requires to explain the main reason and purpose of issuing 194 million yuan invoice in violation of regulations, whether there is real transaction behavior, whether the business involved is related to the main business of Millennium jewelry, and the accounting treatment and treatment basis in the early stage of Millennium jewelry. Based on the answers to the above questions, the Shenzhen Stock Exchange also asked the company to explain whether Millennium jewelry has financial fraud in fictitious business, whether it should correct accounting errors in previous annual financial reports, and calculate the impact of changes in relevant financial data on the achievement of Millennium jewelry’s performance commitments from 2017 to 2020, as well as the impact on the financial data of Listed Companies in each year.
the chairman was exposed to falsely write 470 million invoices
Previously, Su riming, the largest shareholder of Fujian Ideal Jewellery Industrial Co.Ltd(002740) , disclosed that Li Yong, the current chairman of the company, was suspected of falsely issuing 470 million yuan of value-added tax invoices.
Su riming was the chairman of Fujian Ideal Jewellery Industrial Co.Ltd(002740) and the founder and the largest shareholder of the company. According to previous announcements, Fujian Ideal Jewellery Industrial Co.Ltd(002740) acquired Millennium jewelry controlled by Li Yong and his wife in 2018. After the transaction, Li Yong and Wang Junxia held 8.38% and 2.12% shares of Fujian Ideal Jewellery Industrial Co.Ltd(002740) respectively.
In November 2019, Fujian Ideal Jewellery Industrial Co.Ltd(002740) announced that the company applied for a loan of no more than 150 million yuan from Longyan Huijin, of which the shareholder Li Yong provided 26.5 million shares of stock pledge guarantee for the loan. In April 2020, Su riming resigned as the chairman of the listed company and replaced Li Yong as the chairman. However, Su riming said that the reason why he would resign was put forward by Longyan Huijin, otherwise they would not continue to promote their support for Fujian Ideal Jewellery Industrial Co.Ltd(002740) .
In August 2021, Su riming twice proposed in writing to the company to convene an extraordinary general meeting of shareholders, requiring the re-election of the board of directors, the removal of Li Yong’s directors, chairman, President, legal representative and other positions, and the investigation of Li Yong’s illegal and criminal acts, but both were rejected by the board of directors. Among them, Su riming said that Li Yong was suspected of falsely issuing 470 million alloy electrolytic copper value-added tax invoices in order to complete the performance bet with listed companies when he was the chairman and legal person of Millennium jewelry in 2019.
According to the Fujian Ideal Jewellery Industrial Co.Ltd(002740) 2019 annual report, there are significant differences between the relevant financial indicators of the annual report and the disclosed quarterly report and semi annual report. The main reason is that the subsidiary Millennium jewelry has a business of processing and selling alloys. The audit institution recognizes the income according to the amount method. Before, Jiangsu Millennium jewelry recognized the income according to the total amount method and carried forward the corresponding cost. The alloy business took place from June 2019 to September 2019, so it has a great impact on the revenue of the second and third quarters. The total revenue of the second and third quarters decreased by 471 million yuan, and the cost also decreased accordingly.
fierce internal struggle among shareholders and no actual controller
huge loss of 2.4 billion in three years, exceeding the total market value
Issuing huge invoices in violation of regulations is just the tip of the iceberg of Fujian Ideal Jewellery Industrial Co.Ltd(002740) all kinds of dazzling problems. Looking back Fujian Ideal Jewellery Industrial Co.Ltd(002740) the first share of Shenzhen jewelry market, whose market value was once close to 15 billion, is more than a sigh.
Over the past two years, Fujian Ideal Jewellery Industrial Co.Ltd(002740) has fallen into a liquidity crisis. The shares of the company’s major shareholders, including major shareholders, have been fully pledged, frozen and forcibly reduced. The business has deteriorated, the stock price is depressed, and the company has been applied for bankruptcy by creditors. In the inquiry letter to the 2020 annual report of Shenzhen Stock Exchange at the end of July 2021, Fujian Ideal Jewellery Industrial Co.Ltd(002740) said that the company is currently short of working capital and has great systemic risks, such as employee salary arrears, continuous creditor litigation, tax arrears and so on.
On July 8, 2021, the creditor Shenzhen yundeli jewelry submitted an application for reorganization of Fujian Ideal Jewellery Industrial Co.Ltd(002740) to Shenzhen intermediate people’s court. Fujian Ideal Jewellery Industrial Co.Ltd(002740) has a processing contract dispute with the creditor, involving an amount of about RMB 5.0644 million.
On November 11, 2021, Fujian Ideal Jewellery Industrial Co.Ltd(002740) received a notice from Longyan Huijin and learned that Su Yongming and di ailing, the shareholders of the company, had passively reduced their total holdings of 18.27 million shares of the company. The change in equity led to the change of the company into a state of no controlling shareholder and no actual controller.
Just a month ago, Su riming, the largest shareholder of Fujian Ideal Jewellery Industrial Co.Ltd(002740) , and the persons acting in concert (DI ailing, Su Yongming, Su Qingxiang) held about 94.9418 million shares in the company.
On December 13, 2021, the company announced that due to the bankruptcy and reorganization of the company, the loans of the subsidiary Millennium jewelry and its secondary subsidiaries could not be renewed normally. The shareholders Li Yong and Wang Junxia were the guarantors of the above loans, and the bank’s application for asset preservation resulted in the freezing of the shares under the names of Li Yong and Wang Junxia. The total number of frozen shares of the two persons was about 40209100 shares, accounting for 8.86% of the total share capital of the company.
On December 14, Shenzhen chaopai Jewelry Co., Ltd. applied for bankruptcy reorganization to Shenzhen intermediate people’s court for its out of control holding subsidiary. However, Fujian Ideal Jewellery Industrial Co.Ltd(002740) has lost effective control over the large-scale jewelry since August 2020. As of the announcement date, it has not even received any report on the above bankruptcy reorganization of the large-scale jewelry, so it is impossible to know the specific situation of its application for bankruptcy reorganization.
In terms of performance, Fujian Ideal Jewellery Industrial Co.Ltd(002740) has continued to report large losses since 2019, including a loss of 300 million yuan in 2019 and 1.56 billion yuan in 2020. The performance of 2021 has just been announced on January 29, with an advance loss of 600 million to 785 million yuan. In other words, the loss of Fujian Ideal Jewellery Industrial Co.Ltd(002740) in recent three years has reached at least 2.4 billion yuan, and the latest market value of the company, after falling more than 80% from the high point, is only 1.971 billion yuan.
Fujian Ideal Jewellery Industrial Co.Ltd(002740) since 2021, this year, we have received the “letter of concern” or “letter of inquiry” issued by Shenzhen stock exchange for 8 times and the “supervision letter” issued by Shenzhen stock exchange for 4 times. Previously, it even broke out that the Fujian Ideal Jewellery Industrial Co.Ltd(002740) Board Secretary angrily slapped the table against the independent director.
