Securities code: 000523 securities abbreviation: * ST Langqi Announcement No.: 2021-182 Lonkey Industrial Co.Ltd.Guangzhou(000523)
Announcement on receiving the decision on administrative punishment from Guangdong Securities Regulatory Bureau
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Lonkey Industrial Co.Ltd.Guangzhou(000523) (hereinafter referred to as “the company” or “Guangzhou Longqi”) received the investigation notice (Yue Cha Zi No. 210023) from the China Securities Regulatory Commission on January 8, 2021. Due to suspected illegal information disclosure, the China Securities Regulatory Commission And decided to file a case for investigation against the company. For details, please refer to the announcement on receiving the notice of investigation filed by CSRC (Announcement No.: 2021-010) disclosed by the company on January 9, 2021.
On November 12, 2021, the company disclosed the advance notice of administrative punishment and market entry prohibition issued by Guangdong regulatory bureau of China Securities Regulatory Commission (hereinafter referred to as “Guangdong securities regulatory bureau”) (Guangdong securities regulatory punishment Zi [2021] No. 17). For details, see the announcement on receiving the advance Notice of administrative punishment and market entry prohibition issued by Guangdong Securities Regulatory Bureau disclosed by the company (Announcement No.: 2021-164).
The company recently received the decision on administrative punishment ([2021] No. 21) issued by Guangdong securities regulatory bureau, and now announces its main contents as follows:
1、 Main contents of the decision on administrative punishment
Party: Lonkey Industrial Co.Ltd.Guangzhou(000523) , domicile: Tianhe District, Guangzhou city.
Fu Yongguo, male, born in April 1963, was the chairman of Guangzhou Langqi, and his address is Yuexiu District, Guangzhou.
Chen Jianbin, male, born in April 1968, then general manager of Guangzhou Langqi, address: Yuexiu District, Guangzhou.
Wang Zhigang, male, born in May 1973, was the Secretary of the board of directors of Guangzhou Longqi. His address is Tianhe District, Guangzhou.
Deng Yu, male, born in April 1976, was the director of Guangzhou Langqi business development department, and his address is Tianhe District, Guangzhou.
Huang Jianbin, male, born in August 1980, was the chief financial officer of Guangdong Qihua Chemical Trading Center Co., Ltd. (hereinafter referred to as Guangdong Qihua), a subsidiary of Guangzhou Longqi. His address is Liwan District, Guangzhou.
Chen Wen, male, born in August 1966, was the deputy general manager of Guangzhou Langqi, and his address is Panyu District, Guangzhou.
Wang Yingjie, male, born in December 1958, was the financial director of Guangzhou Langqi, and his address is Tianhe District, Guangzhou.
According to the securities law of the people’s Republic of China revised in 2005 (hereinafter referred to as the securities law of 2005) and the securities law of the people’s Republic of China revised in 2019 (hereinafter referred to as the securities law of 2019) ）According to the relevant provisions of the law, our bureau has filed a case for investigation and trial of the illegal acts of Guangzhou Longqi information disclosure, and informed the parties of the facts, reasons and basis of administrative punishment and the rights enjoyed by the parties according to law. The parties Fu Yongguo, Deng Yu and Huang Jianbin put forward statements and defense opinions and requested a hearing; Chen Jianbin made a statement and defense, but did not request a hearing; The remaining parties did not request a hearing, nor did they submit statements and arguments. At the request of the parties, our bureau held a hearing and heard the statements and defense of the respective agents of Fu Yongguo, Deng Yu and Huang Jianbin. The investigation and trial of this case have been concluded.
It is found that Guangzhou Longqi has the following illegal facts:
1、 Guangzhou Longqi falsely increased its operating revenue, operating costs and profits from 2018 to 2019. There were false records in the 2018 and 2019 annual reports
From January 1, 2018 to December 31, 2019, Guangzhou Longqi falsely increased its operating revenue, operating costs and profits by making up bulk commodity trading business and circulating ethylene glycol warehouse receipts. Through the above methods, Guangzhou Longqi’s 2018 annual report falsely increased the operating revenue by 6234322859.99 yuan, falsely increased the operating cost by 6023835603.98 yuan and falsely increased the profit by 210487256.01 yuan, accounting for 518.07% of the total disclosed profit of the current period. The 2019 annual report of Guangzhou Longqi falsely increased the operating revenue by 6651448598.32 yuan, falsely increased the operating cost by 6450009272.10 yuan and falsely increased the profit by 201439326.22 yuan, accounting for 256.57% of the total disclosed profit of the current period.
2、 Guangzhou Longqi falsely increased its inventory from 2018 to 2019, and there were false records in the 2018 annual report and 2019 annual report
From January 1, 2018 to December 31, 2019, in order to beautify the financial statements, Guangzhou Longqi adjusted some falsely increased prepayments to falsely increased inventories. Through the above methods, the inflated inventory amount in the 2018 annual report of Guangzhou Longqi was 956423831.44 yuan, accounting for 75.84% of the inventory amount disclosed in the current period, 13.54% of the total assets disclosed and 50.53% of the net assets disclosed. The amount of falsely increased inventory in the 2019 annual report was 1082231342.91 yuan, accounting for 78.58% of the inventory amount disclosed in the current period, 12.17% of the total assets disclosed and 56.83% of the net assets disclosed.
3、 Guangzhou Longqi failed to disclose the capital transactions and related related transactions of related parties as required from 2018 to 2019, and there were major omissions in the 2018 and 2019 annual reports
(i) Guangzhou Longqi failed to disclose the related party capital transactions and related related transactions with Guangzhou Dianrong Enterprise Management Co., Ltd. (hereinafter referred to as Guangzhou dianrong) and its subsidiaries as required
1. Guangzhou Longqi and Guangzhou dianrong, Panzhihua Tianyi Chemical Co., Ltd. (hereinafter referred to as Panzhihua Tianyi) and Huidong Jinchuan Phosphorus Chemical Co., Ltd. (hereinafter referred to as Huidong Jinchuan) constitute related parties.
Since 2017, Fu Yongguo, then chairman of Guangzhou Longqi, has held 34% of the shares of Guangzhou dianrong. Panzhihua Tianyi is a wholly-owned subsidiary of Guangzhou dianrong, and Huidong Jinchuan is a holding subsidiary of Guangzhou dianrong. Fu Yongguo has long provided Guangzhou Langqi funds to Guangzhou dianrong, Panzhihua Tianyi and Huidong Jinchuan. According to Item 4 of article 216 of the company law of the people’s Republic of China (amended in 2018, hereinafter referred to as the company law), paragraph 3 of Article 71 of the measures for the administration of information disclosure of listed companies (Order No. 40 of the CSRC, hereinafter referred to as the measures), and accounting standards for Business Enterprises No. 36 – disclosure of related parties According to the provisions of Article 3, Guangzhou dianrong, Panzhihua Tianyi and Huidong Jinchuan are the affiliated legal persons of Guangzhou Longqi, and the transactions between Guangzhou Longqi and the above enterprises constitute connected transactions.
2. Related party transactions related to related parties.
In 2018, Guangzhou Longqi purchased yellow phosphorus and other commodities from Panzhihua Tianyi with a total transaction amount of 29521186 yuan and Huidong Jinchuan with a total transaction amount of 27568090.35 yuan. The total amount of the above connected transactions is 305201276.35 yuan, accounting for 16.59% of the latest audited net asset value of Guangzhou Longqi. In 2019, Guangzhou Longqi purchased yellow phosphorus and other commodities from Panzhihua Tianyi, with an amount of 9639218 yuan, and yellow phosphorus and other commodities from Huidong Jinchuan, with a total amount of 21543678 yuan. The total amount of the above connected transactions is 31182896 yuan, accounting for 1.65% of the latest audited net asset value of Guangzhou Longqi.
3. Capital transactions of related parties.
From January 1, 2018 to December 31, 2019, Guangzhou Longqi transferred the funds to Guangzhou dianrong and its subsidiaries under the cover of multi-layer intermediary companies in the name of advance purchase payment. Relevant sources of funds include Guangzhou Longqi’s own funds, commercial acceptance bills, bank loans and factoring agency loans. Guangzhou dianrong used the relevant funds for the expansion of production, technical transformation and repayment of arrears of the mine assets held by Huidong Jinchuan.
In 2018, in the name of external procurement, Guangzhou Longqi finally paid 1177794297.15 yuan to Guangzhou dianrong, Panzhihua Tianyi and Huidong Jinchuan through multi-layer company transition. In 2019, in the name of external procurement, Guangzhou Longqi transited through multi-layer companies, and finally paid 2449384392.12 yuan to Guangzhou dianrong, Panzhihua Tianyi and Huidong Jinchuan.
（2） Failing to disclose the capital transactions with related parties of Jiangsu Qiheng agrochemical Technology Co., Ltd. (hereinafter referred to as Jiangsu Qiheng) as required
1. Guangzhou Longqi and Jiangsu Qiheng constitute a related relationship.
Guangzhou Longqi has held 25% of the shares of Jiangsu Qiheng since September 2013. According to Item 4 of article 216 of the company law, item 3 of Article 71 of the letter Phi measures and item 6 of Article 4 of the accounting standards for Business Enterprises No. 36 – disclosure of related parties, Jiangsu Qiheng is an affiliated legal person of Guangzhou Longqi.
2. Capital transactions of related parties.
From January 1, 2018 to December 31, 2019, Guangzhou Longqi transferred the funds to Jiangsu Qiheng under the cover of multi-layer intermediary companies in the name of paying the purchase price. Relevant sources of funds include Guangzhou Longqi’s own funds, commercial acceptance bills, bank loans and factoring agency loans. Jiangsu Qiheng used relevant funds to expand production and repay bank debts.
In 2018, Guangzhou Longqi transited through multi-layer companies in the name of external procurement, and finally paid 41901500 yuan to Jiangsu Qiheng and its related holding subsidiaries. In 2019, Guangzhou Longqi transited through multi-layer companies in the name of external procurement, and finally paid 54329100 yuan to Jiangsu Qiheng and its related holding subsidiaries.
According to article 10.2.4 of the Listing Rules of Shenzhen Stock Exchange (revised in November 2018), “related party transactions between listed companies and related legal persons with a transaction amount of more than 3 million yuan and accounting for more than 0.5% of the absolute value of the latest audited net assets of listed companies shall be disclosed in a timely manner” The amount of related party transactions and capital transactions with related parties of Guangzhou Longqi in 2018 and 2019 meet the standards that should be disclosed in a timely manner.
According to Item 6 of Article 66 of the securities law of 2005 and item 1 of Article 79 of the securities law of 2019 In accordance with Articles 31 and 40 of the standards for the contents and forms of information disclosure by companies offering securities to the public No. 2 – Contents and forms of annual reports (CSRC announcement (2017) No. 17), Guangzhou Longqi shall disclose the related party transactions and capital transactions of related parties in the relevant annual reports.
Guangzhou Longqi did not disclose the related party transactions and capital transactions of related parties in the 2018 annual report and 2019 annual report.
4、 Performance of directors, supervisors and senior managers
Fu Yongguo, When he was chairman of Guangzhou Longqi (from June 2014 to may 2019), comprehensively manage the company’s affairs, organize and plan Guangzhou Longqi to implement financial fraud through fictitious bulk commodity trade business, circular trading ethylene glycol warehouse receipts, etc., and know that the financial information in Guangzhou Longqi’s 2018 annual report is false, as well as the related party transactions and undisclosed capital transactions between Guangzhou Longqi and its participating companies And promise to ensure that relevant documents are true, accurate and complete. At that time, he was the deputy general manager of Guangzhou Light Industry and Trade Group Co., Ltd., the controlling shareholder of Guangzhou Longqi (from April 2016 to March 2020), responsible for contacting Guangzhou Longqi, which had a significant impact on the company’s daily operation, continued to organize Guangzhou Longqi to carry out financial fraud through fictitious bulk commodity trade business, circular trading ethylene glycol warehouse receipts, etc., and learned that Guangzhou Longqi continued to carry out financial fraud in 2019, as well as the related party transactions and funds between Guangzhou Longqi and the company it participated in In terms of transactions, Guangzhou Longqi failed to correct errors and truthfully disclose relevant financial information and related transactions in accordance with the requirements of its duties and remind Guangzhou Longqi.
Chen Jianbin, then general manager of Guangzhou Longqi (from June 2014 to April 2020), was responsible for the daily operation of the company, was aware of the financial fraud of Guangzhou Longqi, did not take effective measures to avoid the consequences of damage, and signed to ensure that the contents of the 2018 and 2019 annual reports of Guangzhou Longqi were true, accurate and complete.
Chen Wen, then deputy general manager of Guangzhou Longqi, was in charge of the company’s trade business, was responsible for the review and control of the trade contract before it was submitted to the general manager’s office meeting for deliberation, failed to take effective measures to avoid damaging consequences for the financial fraud of Guangzhou Longqi, and signed to ensure that the contents of Guangzhou Longqi’s 2018 annual report and 2019 annual report are true, accurate and complete.
Wang Zhigang, Then Secretary of the board of directors of Guangzhou Longqi (from April 2015 to July 2020), he was in charge of the company’s information disclosure, participated in the financial fraud implemented by Guangzhou Longqi through fictitious commodity trade business and circular trading ethylene glycol warehouse receipts, learned that the financial information of Guangzhou Longqi’s 2018 and 2019 annual reports was false, and still signed to guarantee the contents of Guangzhou Longqi’s 2018 and 2019 annual reports True, accurate and complete.
Wang Yingjie, then chief financial officer of Guangzhou Longqi (June 2014 to October 2019), was in charge of accounting, was responsible for organizing the financial and accounting department to carry out accounting and prepare financial reports, failed to be diligent in preparing the financial statements in 2018, and signed to ensure that the contents of Guangzhou Longqi’s 2018 annual report were true, accurate and complete.
Deng Yu, then director of the business development department of Guangzhou Longqi (March 2011 to September 2020), was specifically responsible for the implementation of financial fraud by Guangzhou Longqi through fictitious commodity trade, circular trading ethylene glycol warehouse receipts, etc.; organized and implemented the capital transactions between Guangzhou Longqi and related parties and related transactions.
Huang Jianbin, then financial director of Guangdong Qihua, a subsidiary of Guangzhou Longqi (June 2016 to September 2020), was specifically responsible for the implementation of the approval of Guangzhou Longqi
