Securities code: 002470 securities abbreviation: St Jinzheng Announcement No.: 2022-011 Kingenta Ecological Engineering Group Co.Ltd(002470)
Announcement on receiving the decision on administrative punishment and the decision on banning market entry of China Securities Regulatory Commission
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.
Kingenta Ecological Engineering Group Co.Ltd(002470) (hereinafter referred to as “Jin Zhengda” or “the company”) received the investigation notice of China Securities Regulatory Commission (lzczz [2020] No. 18) on September 14, 2020. Because the company is suspected of illegal information disclosure, according to the relevant provisions of the securities law of the people’s Republic of China, China Securities Regulatory Commission (hereinafter referred to as “CSRC”) decided to file a case for investigation. For details, see the announcement on receiving the investigation notice of China Securities Regulatory Commission (Announcement No.: 2020-067) disclosed by the company on September 15, 2020.
On May 21, 2021, the company disclosed the prior notice of administrative punishment and market Prohibition (punishment Zi [2021] No. 35) issued by the CSRC. For details, see the announcement on receiving the prior notice of administrative punishment and market Prohibition (Announcement No.: 2021-052) disclosed by the company.
On January 18, 2022, the company and relevant personnel received the decision on administrative punishment ([2022] No. 1) and the decision on market entry Prohibition ([2022] No. 1) issued by the CSRC. The main contents are announced as follows:
1、 Contents of the decision on administrative punishment
Party: Kingenta Ecological Engineering Group Co.Ltd(002470) , domicile: No. 19, Xingda West Street, Linshu County, Linyi City, Shandong Province.
Wan Lianbu, male, born in July 1965, was the actual controller, chairman and general manager of Jin Zhengda. His address is No. 98, Changlin East Street, Linshu County, Linyi City, Shandong Province.
Li Jiguo, male, born in December 1976, was the deputy general manager and financial director of Jin Zhengda. His address: Room 302, unit 2, building 1, No. 12, Changlin East Street, Linshu County, Linyi City, Shandong Province.
Tang Yong, male, born in July 1973, was the manager of financial department and director of financial center of Jin Zhengda. His address: Room 502, unit 4, building 2, No. 12, Changlin East Street, Linshu County, Linyi City, Shandong Province.
Cui bin, male, born in February 1971, served as director, Secretary of the board of directors and deputy general manager of Jin Zhengda at that time. His address is No. 52, building 41, Gucheng South Road, Shijingshan District, Beijing.
Gao Yiwu, male, born in September 1972, was the director and deputy general manager of Jin Zhengda. His address: room 2201, building 11, Kaiyuan Shangcheng community, Lanshan District, Linyi City, Shandong Province.
Yan Mingxiao, male, born in June 1969, then deputy general manager of Jin Zhengda, address: room 1101, building 11, Kaiyuan Shangcheng community, Lanshan District, Linyi City, Shandong Province.
Zheng Shulin, male, born in February 1965, then deputy general manager of Jin Zhengda, address: Room 401, unit 2, building 2, Houyuan Xinyuan community, Lanshan District, Linyi City, Shandong Province.
Xu Hengjun, male, born in January 1973, then deputy general manager of Zhengda, address: room 406, unit 3, building 5, Champs Elysees, No. 4, Zhongqiu Road, jinqueshan street, Lanshan District, Linyi City, Shandong Province.
In accordance with the relevant provisions of 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), the CSRC has filed a case for investigation and trial of Kim Jong Il’s illegal information disclosure, And informed the parties of the facts, reasons and basis of the administrative punishment and the rights enjoyed by the parties according to law. At the request of the parties Jin Zhengda, Wan Lianbu, Li Jiguo, Tang Yong, Cui bin, Gao Yiwu, Yan Mingxiao, Zheng Shulin and Xu Hengjun, the CSRC held a hearing on November 10, 2021, After hearing the statements and arguments of the above parties and their agents, the investigation and trial of this case have been concluded.
It is found that Kim Jong Il has the following illegal facts:
(I) Kim Jong Il inflated revenue and profits by fictitious trade business
From 2015 to the first half of 2018, through fictitious contracts with its suppliers, customers and other external units, some subsidiaries within the scope of Kim Jong Il and its consolidated statements idled funds and carried out fictitious trade business without real logistics, accumulating a fictitious income of 23073.4506 million yuan, a fictitious cost of 21083.8488 million yuan and a total fictitious profit of 1989.6018 million yuan. Including: in 2015, the falsely increased operating revenue was 2464844400 yuan, the falsely increased cost was 2305079900 yuan, and the corresponding falsely increased total profit was 159764500 yuan, accounting for 12.20% of the total profit disclosed in the current period; In 2016, the falsely increased operating income was 8472.9936 million yuan, the falsely increased cost was 7427.8023 million yuan, and the corresponding falsely increased total profit was 1045.1913 million yuan, accounting for 99.22% of the total profit disclosed in the current period; In 2017, the falsely increased operating revenue was 6131.2567 million yuan, the falsely increased cost was 5680.776 million yuan, and the corresponding falsely increased total profit was 450.4807 million yuan, accounting for 48.33% of the total profit disclosed in the current period; In the first half of 2018, the falsely increased operating revenue was 6004355900 yuan, the falsely increased cost was 5670190600 yuan, and the corresponding falsely increased total profit was 334165300 yuan, accounting for 28.81% of the total profit disclosed in the current period. The above situation led to false records in the 2015 annual report, 2016 annual report, 2017 annual report and 2018 semi annual report disclosed by Kim Jong Il.
(II) Kim Jong Il failed to disclose related parties and related transactions as required
1. Kim Jong Il failed to disclose its connected relationship and connected transactions with nobefeng (China) Agriculture Co., Ltd. as required
(1) The disclosure of the relationship between Kim Jong Il and nobefeng (China) Agriculture Co., Ltd. is inaccurate
Wan Moujun is the sister of Wan Lianbu, the actual controller of Kim Jong Il and chairman and general manager. Wan Moujun holds 100% equity of nobefeng Investment Co., Ltd. (hereinafter referred to as nobefeng investment) through direct holding or holding on behalf of others, and can control nobefeng investment. Nobefeng investment is the controlling shareholder of nobefeng (China) Agriculture Co., Ltd. (hereinafter referred to as nobefeng), and Mr. Wan is the actual controller of nobefeng. According to item 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 for the administration of information disclosure), Wan Moujun is an associated natural person of Kim Jong Il, and Nuo Beifeng is an associated legal person of Kim Jong IL.
Kim Jong Il disclosed Nuo Beifeng as a related party in the annual reports of 2018 and 2019. The reasons for the disclosure include that Kim Jong Il holds 10.71% equity of Nuo Beifeng, the legal representative of Nuo Beifeng holds a middle-level management position in Kim Jong Il, and Kim Jong Il has large capital transactions with Nuo Beifeng in 2018. Kim Jong Il’s disclosure of its relationship with nobefeng was inaccurate.
(2) Kim Jong Il’s disclosure of related capital transactions between Kim Jong Il and nobefeng is inaccurate
In 2018 and 2019, Kim Jong Il paid non operating funds of RMB 5545054400 and RMB 2529019800 to nobefeng respectively through prepayment, which were not disclosed in the annual reports of 2018 and 2019 as required, and in the summary of funds occupied by controlling shareholders and other related parties in 2018 In the summary of funds occupied by controlling shareholders and other related parties in 2019, the nature of non operating capital transactions with norbefeng is disclosed as operating transactions.
Most of the above funds are transferred into the external capital pool by Kim Jong Il. The funds in the capital pool are mainly used for fictitious trade capital circulation, repayment of loan principal and interest, asset operation outside the system, etc. By the end of 2018 and 2019, after deducting the non operating funds recovered by Kim Jong Il and the funds used for fictitious trade business, the balance of non operating funds between Kim Jong Il and nobefeng was 1983072900 yuan and 2757884600 yuan respectively.
2. Kim Jong Il failed to disclose its related relationships and related transactions with Fulang (China) Biotechnology Co., Ltd. and nutril (China) Chemical Co., Ltd
Wan Moujun holds 100% equity of Fulang (China) Biotechnology Co., Ltd. (hereinafter referred to as Fulang) and nottel (China) Chemical Co., Ltd. (hereinafter referred to as nottel), and is the actual controller of Fulang and nottel. According to item 3 of Article 71 of the measures for the administration of trust phi, Fulang and nottel are affiliated legal persons of Kim Jong Il. Kim Jong Il did not disclose Fulang and nottel as related parties of Kim Jong Il in the annual reports of 2018 and 2019.
In 2018, Kim Jong Il purchased 33.9535 million yuan of goods from Fulang and sold 17.8627 million yuan of goods, with a total transaction amount of 51.8161 million yuan; In 2019, Kim Jong Il purchased 69.1375 million yuan of goods from Fulang and sold 489.3882 million yuan of goods, with a total transaction amount of 558.5258 million yuan. In 2018, Kim Jong Il purchased 72.3152 million yuan of goods from nottel, sold 14.838 million yuan of goods, and the total transaction amount was 87.1532 million yuan; In 2019, Kim Jong Il purchased 25.5674 million yuan of goods from nottel, sold 31.2406 million yuan of goods, and the total transaction amount was 56.808 million yuan. Kim Jong Il did not disclose the above related party transactions in the financial reports of 2018 and 2019.
In conclusion, according to articles 51 and 52 of the rules for the preparation of information disclosure of companies offering securities to the public No. 15 – General Provisions on financial reports (CSRC announcement [2014] No. 54), According to Article 40 of the standards for the content and format of information disclosure by companies offering securities to the public No. 2 – the content and format of annual reports (CSRC announcement [2017] No. 17), Kim Jong Il shall truthfully disclose its related relationships and related transactions with nobefeng, Fulang and nottel in the 2018 annual report and 2019 annual report, However, Kim Jong Il did not disclose it as required.
(III) there are false records in most of Kim Jong Il’s assets and liabilities
1. Jin Zhengda falsely reduced notes payable
From July 2018 to June 2019, Jin Zhengda, as the drawer and acceptor, issued commercial acceptance bills to 7 companies involved in the above fictional trade business, including Linyi Fangao Agricultural Materials Sales Co., Ltd., through four banks including subcontractor bank, China China Minsheng Banking Corp.Ltd(600016) , Hua Xia Bank Co.Limited(600015) , China Zheshang Bank Co.Ltd(601916) , with an accumulated amount of 1028 million yuan. Jin Zhengda failed to carry out accounting treatment for the above commercial acceptance bills issued by him, resulting in a false reduction of notes payable and other receivables of RMB 928 million in the 2018 annual report and RMB 1028 million in the 2019 semi annual report.
2. Kim Jong Il falsely increased commodities
In order to solve the problem of large prepayment balance and false estimated inventory balance and digest the inventory loss, Kim Jong Il fictitious the production process by collecting the raw materials received by false estimation and the actual inventory loss, fictitious electricity and labor costs, falsely increased the output of finished products by 2544128400 yuan, and included it in the issued goods account through the false delivery process. At the same time, Kim Jong Il also included the goods of 653023300 yuan falsely purchased and temporarily estimated to be warehoused from nobefeng into the issued goods account, resulting in 3197.1517 million yuan of issued goods. The above situation led to a false increase of inventory of 3197.1517 million yuan, a false increase of total profit of 141.8126 million yuan and a false increase of liabilities (other payables / employee salaries payable) of 14.3584 million yuan in Kim Jong Il’s 2019 annual report.
In conclusion, there are false records in the 2018 annual report, 2019 semi annual report and 2019 annual report disclosed by Kim Jong Il.
Wan Lianbu, the actual controller of Jin Zhengda, the then chairman and general manager, made decisions on the above-mentioned fictitious trade business, falsely increased the issuance of goods and other matters; Be aware of the real relationship between Kim Jong Il and noble, Fulang and noble; Participate in decision-making, and Kim Jong Il transfers non operating funds to nobefeng; It is known that Kim Jong Il issued bills to some companies involved in fictitious trade business for financing. Li Jiguo, then deputy general manager and financial director, participated in the decision-making of the above fictitious trade business, transfer of non operating funds to nobefeng, falsely increase the issuance of commodities, falsely reduce notes payable and other matters; Know or should know the true relationship between Kim Jong Il and nobefeng. Tang Yong, then manager of the finance department and director of the finance center, participated in the discussion and was responsible for organizing the implementation of Kim Jong Il’s fictitious trade business, transferring non operating funds to nobefeng, falsely increasing the issuance of commodities, etc; Participate in the negotiation of false reduction of notes payable; Know or should know the true relationship between Kim Jong Il and nobefeng, Fulang and nottel. Cui bin, then director, Secretary of the board of directors and deputy general manager, participated in handling the industrial and commercial registration procedures of nobefeng, Fulang and nottel, participated in arranging the directors of nobefeng, Fulang and nottel, and failed to pay attention to and further verify the relationship between nobefeng, Fulang, nottel and Kim Jong Il; Participate in decision-making on falsely increased commodity issuance. Gao Yiwu, then director and deputy general manager, served in the relevant Jinzhengda subsidiary involved in fictitious trade during the case, knew and participated in fictitious trade business matters, and knew that the data disclosed in Jinzhengda’s periodic reports since 2015 were inconsistent with the actual data. Yan Mingxiao, then deputy general manager, cooperated with the financial department to perform the relevant approval procedures for fictitious trade business and payment to nobefeng, participated in the approval procedures for external payment of Fulang and nottel, and failed to pay attention to and further verify the relationship between nobefeng, Fulang, nottel and Kim Jong Il. Zheng Shulin, then deputy general manager, cooperated with the financial department to perform the approval procedures related to fictitious trade business; Responsible for nobefeng and Fulang
