Recently, in 2021, 20 typical illegal cases were published, among which the information disclosure violation case of "Yihua Life" of household enterprises was a typical case in which the actual controller directed the listed companies to implement financial fraud. From 2016 to 2019, yihua Life has increased its revenue by 7.1 billion yuan through fictitious sales and other methods.
What means does Yihua Life use to weave financial lies? What tricks did it play to counter the investigation?
Financial fraud for four consecutive years
hide the investigation of confrontation of important departments of the company
According to public information, the main business of Yihua Life is the design, production and sales of household products such as furniture and wood floors, of which the export proportion of products is as high as 70%. On April 27, 2019, Yihua Life released its annual report for 2018. At the end of the reporting period, the balance of Yihua living currency fund was 3.389 billion yuan, and the balance of long-term loans, short-term loans and bonds payable totaled 5.256 billion yuan, financial expenses during the reporting period were 0.447 billion yuan, accounting for% of the net profit of the parent.
On one side, billions of yuan of monetary funds lay on the book, while paying high interest for financing. The abnormal financial data of Yihua's life attracted the attention of the regulatory authorities. In April 2020, the CSRC filed an investigation into the illegal information disclosure of Yihua's life according to law.
The inspectors of the CSRC told the reporter that Yihua Life has six production bases and 47 subsidiaries with CONSOLIDATED STATEMENTS. In order to find clues, they need to transfer all the company's financial vouchers to the company site. Although the inspectors had already expected, they still felt pressure in the face of the mountain of financial vouchers in the conference room at that time.
It is not easy to find the evidence of the company's financial fraud from the vast financial documents. What makes the inspectors feel more difficult is that although the company is well-equipped with the investigation work, it is actually fighting secretly. All contracts signed with overseas customers provided by Yihua Life have only one framework agreement and do not provide basic transaction materials. The whole export process of the company is opaque, however, the core employees or senior executives that the inspectors want to inquire are either resigned or unable to contact, and even the entire import and export department of the company disappears.
Inspector of CSRC: when we went there, the finance department, especially the import and export department, was basically clean and clean. There were no computers, only a stack of very thin framework contracts, stay there as business information for our inspection. In order to avoid the investigation, the company hid all the normal import and export departments in the temporary office of the production workshop with relatively poor conditions, and did not allow the main business personnel to contact the investigators.
The value of customs declaration is nearly 6 times higher.
Yihua Life "dual system" falsifies data
The inspectors of the CSRC told reporters that the financial fraud cases they checked in the past were generally fake exports, and they did not have real exports and customs declaration, so the whole set of data was fake. However, Yihua Life Is Real export and real customs declaration, but the customs declaration price is too high and the value of goods is too high, so as to inflate the enterprise top-line and bottom-line. Therefore, in order to find the strong evidence of fraud of the company, it is particularly critical to obtain the real quotation contract between it and overseas customers.
On the surface, the framework agreement provided by Yihua Life to the inspectors of the CSRC for inspection is consistent with the customs data, regardless of the unit price or total amount of customs declaration, its financial data is also consistent with these framework agreements. However, during the investigation, inspectors found that the company had secretly run another production business system. Every time inspectors entered the site, they secretly pulled out the power of this system.
Through two completely independent production business systems, Yihua Life has made two sets of data respectively. One set of data has a false high value for customs declaration, and the other set of data is the real data reconciled with overseas customers. Finally, the investigation team found relevant evidence of the real price of the company's export goods, including freight vouchers such as quotation, English invoice, packing list, reconciliation and collection details, etc.
CSRC inspector: there is an example for everyone to see. This is its real quotation record, and this is its export declaration record. The real quotation of this dresser is only 205 dollars, but at the time of export declaration, the quotation of dresser is as high as 1359 dollars, and the difference is nearly 6 times.
The discovery of real transaction materials in Yihua's life opened a door for the investigation of the case. In order to further consolidate the evidence, inspectors also applied for cross-border law enforcement cooperation, please ask the overseas regulatory authorities to check the specific situation of some overseas customers. According to the data returned from the follow-up investigation, Yihua's life financial fraud numerous irrefutable evidence. In order to specifically calculate the false data of export sales in each year of Yihua's life, the inspectors of the CSRC even checked the company's more than 12000 container numbers exported from 2016 to 2019.
Inspector of CSRC: Yihua's life is systematic and long-term fraud, and the illegal amount is extremely large and the nature is relatively bad. Because its annual report of 2019 was published in April, 202020, the new securities law was applied and the company was fined 6 million yuan.
Under the background of the comprehensive implementation of the registration system reform, with the implementation of the new securities law, the supervision system and delisting system of the capital market have been further improved. Yihua's life and financial fraud case, it became the first vicious case to be punished by the new securities law. On March 22 last year, due to the closing price of less than 1 yuan for 20 consecutive trading days, Yihua Life was delisted by Shanghai Stock Exchange and officially withdrew from the-share market, it has thus become one of the first batch of "1 yuan delisting shares" under the new delisting rules.
