Statement on voting on the proposal of Julong Co.Ltd(300202) 2021 annual internal control evaluation report at the 31st meeting of the Fourth Board of directors Julong Co.Ltd(300202) all shareholders:
I have carefully considered the proposal of Julong Co.Ltd(300202) 2021 annual internal control evaluation report submitted to the vote at the 31st meeting of the Fourth Board of directors, and I abstain from voting on this proposal.
The main reasons are as follows:
The company's subsidiaries illegally provided guarantees for affiliated enterprises controlled by the actual controller before 2021, resulting in the occupation of funds. At the same time, the actual controller and its affiliated parties illegally occupied the company's funds. So far, there are still huge amounts of funds that cannot be repaid. The above facts show that the company has major defects in the internal control system related to external guarantee and related party transactions.
After the incident, although all levels of the company's governance have actively learned lessons, made serious rectification, continuously strengthened internal control, improved system and process, and improved the company's standardized operation ability, important efforts have been made in all aspects. However, I think:
1. The above-mentioned violations involve various systems and processes such as power allocation structure, authorization management, supervision and implementation, subsidiary control and so on. This proposal fails to provide credible evidence of the company's ability and effect to deal with similar problems in the future after the above rectification.
2. The occurrence of the above violations is internally related to the specific ownership structure of the company. During the rectification process of the company, whether the strengthening of internal control system and the improvement of process and system have made special institutional arrangements for specific ownership structure has not been reasonably explained. I believe that if the current control system can not effectively deal with the challenge of equity concentration to procedures and norms, the effectiveness of the internal control system is still questionable.
Independent director: Wang Zhenshan
Wednesday, April 27, 2022
