The list of S-cheats, long as it is, continues to expand.
China Environment yesterday (6 Jan) announced that its statutory auditor, RT LLP, had conducted surprise site visits, on the request of the Board, to ascertain the existence and validity of receivables due from Anhui Shengyun Mechanical Co. Ltd ( “AHSY” ) and Nanning Youji Technology Co Ltd ( “NNYJ” )
RT -- recently appointed auditor of the company -- was unable to locate NNYJ's physical place of operations based on the address furnished by the previous Finance Department, which is the same address indicated in the confirmation received by auditor RT during their audit.
|• March 2016: Resigns as executive chairman of China Environment.
• June 2016: Stock trading suspended.
• Dec 2016: China Environment lodges report to Commercial Affairs Department against Huang Min and former CFO Chiar Choon Teck.
The confirmation was received by RT without any exception, that is, the balance was confirmed by NNYJ without any disagreement.
The inconsistency between the confirmation received by RT and the inability to identify the physical location and existence of NNYJ has led the Board to conclude that the trade receivables due from NNYJ amounting to RMB 341 Million in the unaudited Group financials for FY2015 is likely to be nonexistent.
The Company has also found discrepancies on the RMB 163 million amount of trade receivables due by the other customer, AHSY during the site visit.
AHSY has subsequently confirmed that no amount is owing to the Company.
The Group had previously impaired the amount due from NNYJ and AHSY in its 2016 half year result announcement on 12 August 2016.
The Company has filed a CAD report and served a writ of summons on the former Executive Chairman Huang Min for these non-existent receivables.
See also: Special auditor uncovers serious, suspicious lapses in FORELAND FABRICTECH