A stone stirs thousands of waves. As the independent director of Peking University Professor questioned the authenticity of the annual report, Shenzhen Laibao High-Tech Co.Ltd(002106) ( Shenzhen Laibao High-Tech Co.Ltd(002106) . SZ), who had just received the letter of concern from the Shenzhen Stock Exchange, received the inquiry letter of the annual report.
Recently, independent director Jiang Daxing’s statement of objection to the annual report caused Shenzhen Laibao High-Tech Co.Ltd(002106) to fall into an annual report storm. In the face of the statement issued by the staff of Shenzhen Laibao High-Tech Co.Ltd(002106) securities department that “the power of independent directors can not be magnified indefinitely, otherwise the work process can not be carried out easily”, which once again aroused heated discussion on the current independent director mechanism.
On March 30, Shenzhen Laibao High-Tech Co.Ltd(002106) released the annual report of 2021. However, its independent director Jiang Daxing objected to the annual report, saying that it could not guarantee the authenticity, accuracy and integrity of the financial data in the annual report, such as operating income, accounts receivable, inventory count, profit and so on. Subsequently, on April 2, Shenzhen Laibao High-Tech Co.Ltd(002106) received the annual inquiry letter from the second Department of management of listed companies of Shenzhen Stock Exchange, which raised questions on 12 major issues.
Affected by this, Shenzhen Laibao High-Tech Co.Ltd(002106) opened down sharply for two consecutive days. As of April 2, it closed at 8.18 yuan / share, down 8.6%, with a total market value of 5.774 billion yuan.
For the details of the annual report storm and the attitude of the company’s securities affairs department towards the independent director Jiang Daxing’s questioning of the annual report, the reporter of Huaxia times sent an interview letter to the Shenzhen Laibao High-Tech Co.Ltd(002106) securities affairs department. Because he didn’t get a reply, he dialed his phone again. The answering staff said that the company didn’t comment on the power and responsibility boundary of the independent director and responded that “we didn’t say that”.
annual report storm context
On March 30, Shenzhen Laibao High-Tech Co.Ltd(002106) disclosed the annual report of 2021. The company achieved an annual operating revenue of 7.682 billion yuan, a year-on-year increase of 13.79%; The net profit attributable to shareholders of listed companies was 491 million yuan, a year-on-year increase of 12.10%.
But this seemingly good report card from the outside world was questioned by Jiang Daxing, an independent director of the company. Jiang Daxing said that he could not guarantee or disagree with the authenticity, accuracy and completeness of the financial data such as operating revenue, accounts receivable, inventory count and profit in the annual report of Shenzhen Laibao High-Tech Co.Ltd(002106) 2021.
According to public information, Jiang Daxing is a professor of Law School of Peking University and has served as Shenzhen Laibao High-Tech Co.Ltd(002106) independent director since May 2016. In addition, Jiang Daxing has also served as an independent director of Jinzhou bank, Langold Real Estate Co.Ltd(002305) Co., Ltd., Hubei Radio and Television Information Network Co., Ltd. and other companies since 2011.
According to the instructions of Jiang Daxing and the certified public accountants of Tianjian certified public accountants, Jiang Daxing sent an email to the certified public accountants on January 24, requesting Tianjian certified public accountants to pay special attention to the accuracy, authenticity and rationality of the company’s operating revenue recognition in the audit work. In terms of certified public accountants, they made timely and corresponding replies to Jiang Daxing’s special concerns through on-site video conference and e-mail.
For the specific reasons for the doubt, Jiang Daxing said that in the process of audit communication, Tianjian accounting firm responded to the communication matters of independent directors slowly, and only made procedural replies in the early stage, which made him have reasonable doubts about the relevant financial data he paid attention to. Tianjian certified public accountants gave a specific reply only when it proposed to hire another accounting firm to review the annual report and would vote against the proposed renewal of the audit institution. Therefore, he has reasonable doubts about the annual report of Shenzhen Laibao High-Tech Co.Ltd(002106) 2021.
On March 16, Jiang Daxing proposed to Shenzhen Laibao High-Tech Co.Ltd(002106) invite an independent accounting firm or certified public accountant to assist him in reviewing the annual report of the company. However, Jiang Daxing’s request has not been recognized by the listed company and other independent directors. The company believes that this behavior is not a legal procedure. At the same time, it said that the annual report data is confidential and shall not be leaked.
In addition, Jiang Daxing also asked Xiong Chuxiong (Professor of Accounting), the person in charge of the company’s audit committee, for judgment on the authenticity of the annual report, and asked how he ensured the authenticity of the company’s annual report and through what investigation methods. The latter said that he believed that the company’s financial report was true and that there would be no risk for independent directors.
However, Jiang Daxing believes that the investigation measures taken by Xiong Chuxiong can not convince him of the accuracy of his judgment by truthfully investigating and looking at the matching relationship between cash flow and operating income. Because each independent director’s on-site visit time is quite limited, and “the matching relationship between cash flow and revenue can be fake.”
However, according to the 2021 annual report, except Jiang Daxing, none of the three independent directors of Shenzhen Laibao High-Tech Co.Ltd(002106) including Xiong Chuxiong questioned the financial data of Shenzhen Laibao High-Tech Co.Ltd(002106) .
After failing to find various ways, Jiang Daxing said in his annual report that in view of his doubts about the company’s 2021 annual report, he resigned from the company as an independent director, but because his resignation will lead to the number of independent directors being lower than the quorum, he needs to remain in office until the new independent director of the company is elected.
denied having commented on the boundaries of powers and responsibilities of independent directors
So, can the financial situation of Shenzhen Laibao High-Tech Co.Ltd(002106) stand scrutiny? According to the annual report, the financial data suspected by Jiang Daxing include operating income, profit, accounts receivable, inventory count and other data, and our reporter combed his annual report and found that there is indeed a problem of large fluctuation in the sales cash ratio.
The reporter noted that Shenzhen Laibao High-Tech Co.Ltd(002106) also received the inquiry letter of the annual report today after receiving the attention letter issued by the Shenzhen Stock Exchange on March 31.
On March 31, the Shenzhen Stock Exchange issued a letter of concern to Shenzhen Laibao High-Tech Co.Ltd(002106) requiring independent director Jiang Daxing and the audit institution to explain the details of the note letter on financial declaration, the reply content, and even the audit procedures one by one, and submit the explanatory materials and disclose them to the public before April 6.
On the afternoon of April 2, Shenzhen Laibao High-Tech Co.Ltd(002106) received the inquiry letter of the annual report issued by the Shenzhen Stock Exchange, requesting to explain the reasons for the continuous large difference between the net profit and the net cash flow from operating activities in the past three years; In combination with the industry situation, explain the reasons and rationality of the changes in sales collection in recent three years, and also require relevant explanatory materials to be submitted and disclosed before April 6.
In addition, the staff of Shenzhen Laibao High-Tech Co.Ltd(002106) Securities Department said that “the power of independent directors cannot be magnified indefinitely, otherwise the work process can not be carried out easily”.
The reporter of Huaxia times sent a letter to the Shenzhen Laibao High-Tech Co.Ltd(002106) securities affairs department about the details of the annual report storm and the attitude of the company’s securities affairs department towards the independent director Jiang Daxing’s questioning of the annual report.
The reporter also called the company’s securities affairs department at noon on April 2. The receiver said that because the Shenzhen Stock Exchange gave the company a short reply time, it would not be able to reply to the interview letter this week.
Subsequently, when the reporter of our newspaper asked him to confirm that the media reported that the Securities Department of the company said that “the power of the independent director can not be expanded indefinitely, otherwise the work process can not be carried out easily”, the other party denied such remarks, said that the company did not comment on the power and responsibility boundary of the independent director, and responded twice in a row that “we didn’t say this”.
Jiang Daxing also said that he does not accept media interviews at present, and the information disclosure matters shall be subject to the information disclosed through legal channels.
how should independent directors perform their duties
Our reporter noticed that Jiang Daxing rarely raised objections during his five-year tenure as independent director of Shenzhen Laibao High-Tech Co.Ltd(002106) company, but he raised his objections for the first time shortly after the first instance judgment of Kangmei case. This time, when the Shenzhen Laibao High-Tech Co.Ltd(002106) board of directors considered the “proposal on cooperating in the urban renewal and reconstruction project of Nanshan factory”, they cast the only negative vote and questioned the authenticity of the annual report data.
In this objection to the annual report data, Jiang Daxing also made it clear that the proposal for the company to hire another accounting firm was “in view of the recent strict investigation of the responsibilities of the independent directors of the court and the CSRC”.
Shen Meng, executive director of Xiangsong capital, pointed out to the reporter of Huaxia times that the objection raised by the independent directors of A-share listed companies to the audit results of the annual report and other corporate affairs did not start after the Kangmei pharmaceutical case, but had not received the attention of the society and the media before.
For this storm, pan Helin, CO director and researcher of the digital economy and financial innovation research center of the International Joint Business School of Zhejiang University, believes that the independent director has not expanded his authority and has not acted improperly in this matter.
Pan Helin told Huaxia times: “Regardless of the result, Jiang Daxing has the right to raise an objection to the authenticity of the financial statements during his term of office as an independent director, and is also obliged to submit the basis for his objection to the regulators or make it public. As an independent director, if the objection part contains contents outside the professional scope, the independent director has the right to request the replacement of the audit firm. Of course, the replacement of the firm and auditor needs to be decided by the collective vote of the board of directors.”
Pan Helin further pointed out that when the independent director has doubts and doubts about the company’s decision-making, he should take the initiative to seek the help of professionals and external personnel to verify his judgment. In addition, when the independent director raises an objection, he should also negotiate, communicate and verify the scheme with the company’s management. If the management does not cooperate, it is the problem of the management. If the independent director finally suspects that it has not been verified, It depends on whether the independent director’s initial doubt is reasonable. If the doubt itself is reasonable, there is no reason to require the independent director to bear responsibility for raising an objection.
In an interview with our reporter, Shen Meng also pointed out that most independent directors of A-share listed companies are professionals with certain social status and will not blindly choose to shield or indulge the management in major events. At the same time, we should also note that some independent directors’ objections or rejections are not based on professional positions, but with personal interests and grievances, Therefore, we cannot blindly believe that the independent director represents justice after the Kangmei pharmaceutical incident, but we should still analyze and judge according to specific matters.
Shen Meng believes that the power and responsibility mechanism of independent directors has been very clear, which is to express opinions on important matters of the company on behalf of external shareholders and based on their own specialties, improve the corporate governance mechanism and protect the interests of external shareholders. Of course, the behavior of independent directors should be based on professionalism, objectivity and morality.
