The latest news came from the previously noisy event of Fortune Ng Fung Food (Hebei) Co.Ltd(600965) CFO refusing to sign the annual report.
On the evening of May 17, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) announced that Hebei securities regulatory bureau had issued the “advance notice of administrative supervision measures” to Li Fucheng, the actual controller of the company, and Cheng Jing, the chief financial officer, and planned to take supervision measures against the above-mentioned personnel. At the same time, Hebei securities regulatory bureau also decided to issue a warning letter to the company, the chairman and the Secretary of the board of directors; Supervision measures for issuing warning letters to annual audit accounting firms and signing accountants.
Source: announcement of listed companies
Hebei securities regulatory bureau pointed out that anyone involved in the operation and management services of listed companies should have the awareness of “fearing the market, the rule of law, professionalism and investors”, and should not bring the “bad” habit of being invisible to listed companies. The actual controller cannot meddle in the operation and management of listed companies at will, and the directors, supervisors and senior managers cannot “willfully” refuse to fulfill their legal obligations. As the “gatekeeper” of the capital market, audit institutions should be diligent and responsible, and the effectiveness of basic audit evidence cannot be ignored. The case demonstrates the determination of the regulatory authorities to strictly regulate in accordance with the law, accurately crack down on the governance chaos of listed companies, and effectively protect the legitimate rights and interests of small and medium-sized investors, which has sounded an alarm to the market subjects.
In addition, according to the reporter of China Securities Journal, the Shanghai Stock Exchange has also issued a letter of intent for disciplinary action to the chief financial officer, the controlling shareholder, the company and relevant responsible personnel, and the company’s annual audit accountant for the company’s failure to sign regular reports and other violations.
Hebei securities regulatory bureau plans to issue a series of fines
Hebei securities regulatory bureau plans to issue a series of fines for the relevant subjects involved in the “refusal to sign the annual report” by the person in charge of Fortune Ng Fung Food (Hebei) Co.Ltd(600965) finance. Issue a prior notice to Li Fucheng, the actual controller of the company, and Cheng Jing, the person in charge of finance of the company, who is identified as an inappropriate candidate, and order Li Fucheng to rectify and intervene in the daily operation of the listed company within a time limit; The listed company and its chairman and general manager Li Liang and the Secretary of the board of directors Deng Chonghui have taken administrative supervision measures to issue warning letters. YONGTUO Certified Public Accountants (special general partnership), the annual report auditor of Fortune Ng Fung Food (Hebei) Co.Ltd(600965) has also taken administrative supervision measures to issue warning letters.
Specifically, Hebei securities regulatory bureau said that as the actual controller of Fortune Ng Fung Food (Hebei) Co.Ltd(600965) company, Li Fucheng interfered with Fortune Ng Fung Food (Hebei) Co.Ltd(600965) production and operation management, finance and accounting activities in violation of regulations, resulting in defects in Fortune Ng Fung Food (Hebei) Co.Ltd(600965) independence and internal control; Failure to effectively safeguard the independence of listed companies has had a bad impact on the market.
According to relevant regulations, the bureau plans to take administrative supervision measures against Li Fucheng to order him to make corrections and identify him as an inappropriate candidate. He shall not hold the post of director and supervisor of a listed company or actually perform the above-mentioned duties within 60 months from the date of making the written decision of self-determination.
For Cheng Jing, Hebei Securities Regulatory Bureau believes that as a senior manager of a listed company, Cheng Jing failed to fulfill the legal obligation to sign a written confirmation opinion on the periodic report, violated the laws and regulations, violated professional ethics, seriously neglected her duty, and had a bad impact on the market. It plans to take regulatory measures to identify her as an inappropriate candidate, Within 36 months from the date of making the letter of self-determination, he shall not hold the post of director, supervisor or senior manager of a listed company or actually perform the above-mentioned duties.
At the same time, after investigation, Hebei securities regulatory bureau also found that Fortune Ng Fung Food (Hebei) Co.Ltd(600965) had the problem that the 2021 annual report and internal control evaluation report failed to truthfully disclose the major defects of internal control.
“The listed company, the controlling shareholder and the actual controller failed to implement financial separation and business independence, which reflects that your company has major defects in corporate governance and internal control independence, but your company did not truthfully disclose it in the 2021 annual report and the 2021 annual internal control evaluation report.” Hebei securities regulatory bureau said it decided to take administrative supervision measures to issue warning letters to the company and relevant personnel, and record relevant violations in the integrity file.
Shanghai Stock Exchange quick inquiry
The “storm” of the financial controller’s refusal to sign the annual report began on the evening of April 29. That night, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) disclosed the annual report of 2021 and the report of the first quarter of 2022.
The announcement shows that Cheng Jing, the person in charge of accounting, has not signed the written confirmation opinions on the financial report in the 2021 annual report and the first quarterly report of 2022, which does not guarantee the authenticity, accuracy and completeness of the financial report in the annual report. However, the annual report of 2021 and the report of the first quarter of 2022 were reviewed and approved by the board of directors and the board of supervisors of the company. At the same time, the annual audit accountant issued an unqualified opinion with emphasis on the financial statements of the company in 2021, but the opinion on the emphasis on the matters did not involve the matters not signed by the chief financial officer of the company.
In this regard, the Shanghai stock exchange quickly issued a supervision letter that night, requiring the company to verify the reasons why the CFO did not sign the periodic report.
It was not until the evening of May 11 that Fortune Ng Fung Food (Hebei) Co.Ltd(600965) issued a reply to the annual report supervision letter previously issued by Shanghai Stock Exchange. There are two main reasons why the chief financial officer did not sign a written opinion. First, before the review of the annual report, one business activity that has a great impact on the financial data of the company’s regular report (live cow procurement in 2021) has not been verified clearly; Second, Li Fucheng, the actual controller of the company, did not participate in the company’s financial management and other business activities in accordance with the company’s governance and management procedures.
At the same time, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) also issued announcements such as Cheng Jing – statement and alarm certificate, stating a series of events such as the refusal of financial director Cheng Jing to sign the annual report and the first quarterly report due to financial verification and the financial independence of listed companies, followed by “loss of contact” and the company’s alarm.
Source: company announcement
Specifically, Cheng Jing, the chief financial officer, put a statement on the table of the board secretary on April 27 to explain the above objection to the annual report, but the company said that it could not contact the chief financial officer after receiving the document (the company reported to the Public Security Bureau on April 29), and the company could not judge the authenticity of the statement. The company could only assume that the failure of the chief financial officer to sign the annual report of 2021 and the report of the first quarter of 2022 did not guarantee the authenticity of the annual report of 2021 and the report of the first quarter of 2022 Review, approve and disclose the company’s periodic reports in a manner of accuracy and completeness.
After the disclosure of the annual report, with the intervention of supervision and the attention of the market, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) issued the commitment on standardizing the participation in the operation of Hebei Fucheng Food Co., Ltd. as the actual controller. At the same time, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) also clarified the verification of live cattle procurement.
Finally, after reviewing the above matters, Cheng Jing signed the written confirmation of the annual report and the first quarterly report.
one of the actual controllers of company received the court’s judgment
According to public data, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) 2004 was listed on the Shanghai Stock Exchange. In the early stage, its main business was animal husbandry, slaughtering and food processing. After the merger and reorganization of Fucheng catering in 2013, its main business increased catering services. In 2014, it implemented the merger and acquisition of Baota cemetery under the major shareholder Fucheng group. Since then, the company has increased its funeral business and became the first listed company in A-share to participate in funeral business.
After Fortune Ng Fung Food (Hebei) Co.Ltd(600965) acquired 60% equity of Hunan tiandefudi cemetery in 2018, the company said that it had formed a dual main business pattern of “central kitchen” food processing and funeral cemetery life culture. In July 2021, the company restarted beef cattle breeding and slaughtering business, forming an integrated business industrial chain of planting + beef cattle breeding + slaughtering + food processing + catering. Recently, prefabricated dishes have been highly concerned by the capital market, and Fortune Ng Fung Food (Hebei) Co.Ltd(600965) has also entered the prefabricated dish Market and become a concept stock of prefabricated dishes.
As one of the actual controllers of Fortune Ng Fung Food (Hebei) Co.Ltd(600965) , Li Fucheng has attracted market attention. In 2016, the Li Fucheng family ranked 9th on the Hurun rich list with a wealth of 6.7 billion yuan, so it is also known as the “richest man in Yanjiao”.
In January this year, Fortune Ng Fung Food (Hebei) Co.Ltd(600965) announced that Li Fucheng had received the court judgment. In the first instance, the people’s Court of Jizhou District, Hengshui City, Hebei Province ruled that Li Fucheng committed the crime of accepting bribes from non state functionaries and was exempted from criminal punishment; Whoever commits the crime of falsely developing tickets shall be sentenced to fixed-term imprisonment of two years and eleven months and shall also be fined 500000 yuan; Whoever commits the crime of offering bribes to a unit shall be sentenced to fixed-term imprisonment of one year and eight months and be punished for several crimes. It is decided to execute fixed-term imprisonment of three years, suspended for five years and fined 500000 yuan (paid); The illegal gains of 30 million yuan and bribes of 6 million yuan returned shall be turned over to the state treasury by the seizure organ.
It is worth noting that Fortune Ng Fung Food (Hebei) Co.Ltd(600965) said at that time that Li Fucheng currently did not serve as a director or any other position of the company and did not participate in the daily operation and management of the company. The judgment does not involve the company, its holding subsidiaries or the business of the company, and has no impact on the operation, finance and operating performance of the company.
