New Lotus to repeat the mistakes of financial Fraud 5 Committee members have reviewed the new Earth

The new Earth, the three Austrian shares were exposed to fake and failed to go public after the listing, and the third single new Lotus suspected of counterfeiting Sprint gem case, can not help to make people to the issuing system, the Committee members of the appointment ability, due to the state of doubt. At the end of August, the Sichuan new Lotus Herbal Pieces Co., Ltd. (hereinafter called the New Lotus) will fall unexpectedly before the last threshold before listing. According to the SFC disclosed that August 28, Sichuan herbal pieces of Chinese enterprises new Lotus by the Securities and Futures Commission issued the Supervision department, as the latest termination of the review of the past will start enterprises. The reason for this is that the regulators have not expressed it. However, the reporter learned from reliable sources, the new Lotus to terminate the review, and after the queue listed during the listing of employees. According to people close to the Sichuan Securities Regulatory Bureau, the company started after the meeting, there are employees to report the financial fraud, suspected of concealing related transactions, virtual increase in corporate profits and other serious internal control problems. After the investigation and verification by local regulatory authorities, the termination of its IPO approval review. Coincidentally。 In mid-July this year, the first round of the Guangdong New Earth Biotech Co., Ltd. was also terminated after the initial rounds of financial fraud such as forged data and fraudulent transactions, becoming the first IPO enterprise to have been approved for termination. There are a few similarities between companies with the word "new" in all two names. Both will be listed before the sudden termination of the review, the reasons are financial fraud, the market is to be listed as the Gem, and the release of the two companies of the Commission, almost the same people, Kongxiang, Sun Xiaobo, Li Wenxiang, Bang, Tan Hongxu 5 people were present two meetings. However, a few days ago, the fourth session of the Board of Directors of the Gem issued a list of members, in addition to Kongxiang, the other four members have not seen. The list of members of the new Lotus Kiwhan Tan Kongxiang Sun Xiaobo Li Wenxiang Bang Tan Hongxu autoclaved The list of members of the new Chen Jinju Li Jianhui Tan Hongxu Sun Xiaobo Li Wenxiang Kongxiang to the personal purchase rate of up to 80% for the last moment before the listing regret "Lok Ma", the company has said it is "there is another arrangement for listing", There are also news that the company voluntarily withdrew the listing application. But according to the reporter understands, these are only "fig leaf". The reporter learned from reliable sources, about two months ago, there is information about the company was reported circulated. At that time, the report letter was passed directly to the SFC, then transferred to the Sichuan Securities Regulatory Bureau to urge the investigation. Sichuan Securities and Regulatory Bureau after investigation found that the company has a problem. According to people familiar with the matter, the company's fraud is mainly reflected in the concealment of related transactions. That is, by setting up a third party to carry on the unrelated transaction dealing with the related transaction, indirectly falsely increases the profit. Available information indicates that the company is most likely to falsify transactions or from raw material purchases. According to the prospectus, the new Lotus main customers include Guangzhou Pharmaceutical Group, Guangzhou Cai Lin Pharmaceutical, Guangdong Pharmaceutical Group, Beijing Tongren Tong Tong Health Medicine, Shanghai Fuxing Medicine, Shanghai Shang Pharmaceutical industry, Zhangzhou Xinhuang Pharmaceutical industry, Sichuan Province People's Hospital and Sichuan provincial Hospital. The top five sales customers in the past three years are also the main distribution. The risk of these companies being matched to financial fraud is generally low. On the other hand, corporate procurement of financial management loopholes andRisk is much higher. Prospectus shows that the new Lotus main pieces of traditional Chinese medicine processing manufacturing, upstream procurement of raw materials for Chinese herbal medicines, under the agriculture. Based on the characteristics of the industry, the company established a major procurement model for individual suppliers to purchase. Between 2008 and the first half of 2011, individual purchases accounted for 80.93%, 86.43%, 82.02% and 79.68% per cent of total purchases. From the procurement list, the purchase of medicinal materials from the individual suppliers can not be verified. The new Lotus in the prospectus simply disclose the name, does not specify the source of source. The reporter noted that the top five suppliers listed in the first five major varieties of medicinal herbs changed significantly each year and included a large amount of cash transactions. Because of the controllability of individual supplier procurement, it can be used to indirectly adjust the indirect profit of this transaction. "If these individual suppliers are related to the company, then it is entirely possible for the company to lower the cost of the acquisition and to increase the profit margin." "A person engaged in the Chinese herbal medicine business told reporters," on the other hand, even if the company according to market price payment, but because the use of cash, the specific expenditure is difficult to approve, for financial fraud leave space. "The source said, because the state of Chinese herbal medicines and other agricultural products duty-free system, individual suppliers are driven by the interests of enterprises can open or less development votes, indirect impact on the company's performance. On the related financial fraud questions, the reporter has called the new Lotus Dong Chen Yu, but always no answer. Jiangyun, chairman of the reporter in the interview, then hurriedly hang up the phone, no longer answer. Does not mention the inventory depreciation preparation regardless of the incentive cost although cannot confirm from the company whether through conceals the related transaction, the cash settlement way and so on the performance false, but some financial treatment's nonstandard, the new lotus leaves the space for the fictitious increase profit. Reporter investigation found that the new Lotus did not in the corresponding accounting period, the prospectus explicitly mentioned in the inventory of the reduction of risk to do impairment loss adjustment; At the same time, based on the facts of internal management equity incentive, the company also did not give financial processing cost amortization. The company's definition of its inventory impairment is divided into two parts. The first is inventory of raw materials, operating stocks in products and inventory, and the other part of the production inventory of the nature of biological assets. In response, the corporate risk statement clearly states that the foregoing inventory may adversely affect performance due to changes in the market environment, unforeseen natural disasters and mismanagement resulting in impairment. However, under the loss of impairment of assets, the company only involves accounts receivable of bad debts, does not include the aforementioned inventory category of impairment loss. With the price of Chinese herbal medicines entering the declining channel in the second half of 2011, inventories have highlighted the risk of impairment. Prior to the first half of the new Lotus sold ordinary pieces, the average unit price of toxic pieces fell. The former fell by as much as 39.4%, while the latter slipped 30.54%. Data show that the new Lotus in this category of inventory three-year total of up to 22.6118 million yuan, 37.4252 million yuan, 49.8847 million yuan, 71.4942 million yuan. However, some senior accountants believe that because the actual criteria still difficult to define, it is difficult to verify the existence of substantial impairment of inventory, the company's financial staff have the right to choose not toTo reduce value, to achieve the role of color-enhancing profit. The new Lotus obviously chose this accounting treatment to improve the performance. The new Lotus's neglect of the cost amortization of the executive equity incentive is a more obvious profit-increasing behavior. Data show that the new Lotus in June 2010 to three senior executives at 3 yuan per share of the price of 1.38 million shares of additional subscription. According to the supervision department's Equity incentive Behavior criterion, the new Lotus should pay for the above mentioned executive incentive behavior, the cost of this incentive cost is about 883200 yuan. The defect of corporate governance structure has not been improved. In addition to the alleged false increase in profits of the financial fraud, corporate governance structure is also a concern. The prospectus shows that the new Lotus, founded in 2001, is actually held by the Chengdu State Ka Investment Co., Ltd. (hereinafter called Guo Jia Investment), which owns 43.51% of the shares. Jiangyun Investment holding 47% and directly hold the new Lotus 9.36%, and indirectly become the actual controller. In addition to the new Lotus, Jiangyun also holding a Singapore listed company Kerry International. The company was established in 2003 by Jiangyun, Wu Xuadan and other six people through the formation of offshore companies in the form of indirect holdings, October 2004 in Singapore listing. As the listed matrix, China Ka International operating assets are in Sichuan, adjacent to the new Lotus. 2008, 2009, the company controlled by the Chengdu State Jia Joint Pharmaceutical Co., Ltd. (hereinafter referred to as the United States and the new Lotus has had a related transaction.) June 2010, after stepping down the international director of China Ka, Jiangyun will hold a free donation to Wu Xuadan, the latter has inherited Jiangyun successor to China Ka International chairman. According to people familiar with the matter, a few years ago, Jiangyun's work has shifted to the new Lotus, based on the market of medicine pieces of good, its new Lotus investment in greater effort, the purpose is to go public. From the purpose of the gift, Jiangyun is to circumvent the domestic regulatory level on foreign investment must not intervene in the Chinese Medicine industry regulations, to avoid the new Lotus on the market adversely affected. Previously, the new Lotus Prospectus, Jiangyun clear commitment to the new Lotus and China International and its affiliated companies to operate independently, including production and management sites, business technology, management, personnel, finance, institutions in many aspects of mutual independence, in order to avoid potential competition and conflict of interests. But in fact, after six months of Jiangyun equity liquidation, the new Lotus Management still maintains close contact with China Ka International. The relevant investigation shows that the state Ka United January 18, 2011 to handle the scope of business and the changes in the company's Articles of association, has commissioned a new Lotus Dong Chen Yu for Business agents, for the relevant business. At that time, Chen Yu was a deputy general manager of the new Lotus. The 9 subsidiaries are less profitable than the most direct earnings comparisons, compared with their counterparts in the listing of the Kang Mei Pharmaceutical Industry (600518). Financial data show that from 2008 to the first half of 2011, SIG pharmaceutical industry gross profit margin of 26.9%, 33.4%, 36.5%, 30.25%, the new Lotus is only 16.74%, 20.81%, 22.03%, 22.1%, the overall lower than the former about One-third. It is not difficult to see that the new Lotus is not the technology of herbal piecesHigher value-added industries. The only way to support their profitability is to scale-driven efficiency, access to higher bargaining power. The data shows that the production capacity of SIG medicine is about 15,000 tons, and the new Lotus has 5000 tons. Obviously, this makes the new Lotus's profitability difficult to highlight. The prospectus shows that as of the first half of 2011, the new Lotus 9 subsidiaries are losing money. From the case of each subsidiary, the profit level has not been substantially improved, the new Lotus has begun to the upstream Chinese herbal medicine, research and development, downstream logistics channel construction, Sales extension, but the effect is not good. In fact, the new Lotus is still in the embodiment of its research and development strength of High-tech certification swing. Data show that the new Lotus 2008 for the first time to obtain High-tech enterprise certification, 2011 to review. According to the relevant methods, if the company's most recent sales revenue in more than 200 million, research and development costs accounted for sales income ratio of more than 3%. Data show that 2010, the new Lotus accounted for only 2.46% of the first half of 2011 fell to 1.43%, far from the High-tech enterprise certification standards.