extrachillimegaways| Mandatory delisting of A-shares in major violations of laws, or another example will be added! The method of falsely increasing income is exposed

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False increase of operating income, false increase of inventory, * ST New Textile (rights protection) (002087) or lock delisting.

* ST Xinfang announced on the evening of April 28th that the company received a letter from Henan Securities Supervision Bureau on the same day.ExtrachillimegawaysThe advance notice of Administrative punishment and Market ban.

According to the "notice" to find out the suspected illegal facts, * ST New Textile has some illegal facts, such as falsely increasing business income, falsely reducing or falsely increasing operating costs, falsely increasing inventory, falsely increasing R & D expenses, falsely increasing or reducing profits, and so on.

The foregoing may touch 9 of the rules governing the listing of stocks on the Shenzhen Stock Exchange (revised in August 2023)ExtrachillimegawaysIn the case of compulsory delisting in accordance with Article 5.2, the company's shares may be subject to compulsory delisting in a major violation of the law.

* ST Xinfang said that at present, the company is verifying the facts and financial data of the "notification letter" suspected of violating the law, and the final result is based on the official decision issued by Henan Securities Regulatory Bureau. The company will continue to pay attention and disclose the relevant information in a timely manner after receiving the formal penalty decision.

According to the notice, * ST Xinfang is suspected of falsely increasing and reducing its operating income, resulting in false records in its annual report from 2016 to 2022. From 2016 to 2022, * ST New Textile and its subsidiaries falsely increased operating income and operating costs through false trade with external business entities that did not have commercial substance and did not meet the conditions for revenue recognition.

Of this total, there was a false increase of 230 million yuan in operating income and 230 million yuan in operating cost in 2016, 377 million yuan in operating income and 377 million yuan in operating cost in 2017, 676 million yuan in operating income and 594 million yuan in operating cost in 2018.

From 2020 to 2022, * ST New Textile recognized revenue for part of its sales business in advance when it did not meet the conditions for revenue recognition, and re-recognized revenue when it met the conditions for revenue recognition, resulting in a false increase in operating income and a false increase or decrease in total profits.

Among them, in 2020, the false increase in operating income was 215 million yuan, the inflated operating cost was 151 million yuan, and the total inflated profit was 63.7233 million yuan; in 2021, the inflated operating income was 42.2746 million yuan, the operating cost was 33.0827 million yuan, and the total inflated profit was 9,191,800 yuan; in 2022, the inflated operating income was 3.5783 million yuan, the operating cost was 4.718,200 yuan, and the total profit was 1.1399 million yuan.

In addition, * ST New Textile and its subsidiaries take the invoices issued by the purchase and sale of cotton and cotton yarn business as the basis for revenue recognition, which is not in line with the actual situation, and the merger set-off between the parent and subsidiary companies is not accurate, resulting in a false increase in operating income.

From 2016 to 2021, * ST New Textile falsely reduced operating costs by adjusting the amount, amount or vouchers of raw materials, and falsely increasing the number of finished products. From 2016 to 2022, * ST New Textile caused a false increase in inventory due to false reduction of operating costs and other factors. * ST New Textile also falsely increases its R & D expenses by splitting production costs into R & D expenses.

In this regard, the Henan Securities Regulatory Bureau ordered * ST Xinfang to correct, gave a warning and imposed a fine of 10 million yuan. Wei Xuezhu, then chairman of the company, was given a warning and fined 5 million yuan, and Wei Xuezhu was banned from the securities market for life; Xu Qinzhi, director, deputy general manager, then chief financial officer, and secretary of the board of directors was warned and fined 4 million yuan, and Xu Qinzhi was banned from the securities market for 10 years.

The announcement shows that according to the situation determined by the "advance notice of Administrative punishment", * ST Xinfang judged that the illegal and illegal acts of information disclosure involved in the "advance notice of Administrative penalty" received this time may touch the situation of major illegal and compulsory delisting stipulated in the rules governing the listing of stocks on the Shenzhen Stock Exchange. According to the relevant rules, the company will be superimposed with a risk warning of delisting.

Prior to this, * ST Xinfang issued a notice that the company received the "filing notice" issued by the China Securities Regulatory Commission on March 22nd. The main contents of the "filing notice" are as follows: on March 21, 2024, according to relevant laws and regulations, the China Securities Regulatory Commission decided to file a case against * ST Xinfang.

According to public information, * ST New Textile is engaged in the production and sales of medium-and high-grade cotton textiles, including yarn series, grey cloth and fabric products. The company expects a net profit loss of 290 million yuan to 240 million yuan in 2023, a decrease of 79.41% to 82.96% over the same period last year.

The main reason is that in 2022, due to the incomplete scope of the previous company merger and the discrepancy in the self-check inventory account, the retroactive restatement method was adopted to correct the accounting errors in the previous financial statements, which is still in progress.

At present, the delisting mechanism of A shares is being gradually optimized. Institutional analysis believes that the continuous improvement of the delisting mechanism will help to build a more standardized, transparent and efficient capital market environment and promote the healthy development of the A-share market.