Chinese Auditor Gets Debt Funding Suspension After Fudging Client's Financials
Dou Shicong
DATE:  Jul 19 2019
/ SOURCE:  yicai
Chinese Auditor Gets Debt Funding Suspension After Fudging Client's Financials Chinese Auditor Gets Debt Funding Suspension After Fudging Client's Financials

(Yicai Global) July 19 -- Chinese regulators have banned Zhongxinghua Certified Public Accountants from conducting debt financing-related business for six months after finding that the auditor made major errors in a 2017 review of a client's financials.

The firm botched its audit of the now-bankrupt chemicals conglomerate Reward Science and Technology Industry Group's, the National Association of Financial Market Institutional Investors said on July 18, adding that Zhongxinghua must fix up from now on. The suspension kicked in on July 15.

Zhongxinghua, which has 27 branches and nearly 1,000 staff nationwide, signed off on Reward Group's 2017 financials despite missing certificates for bank deposits, business transactions and operating income, the watchdog added, saying this was a clear violation of intermediary service rules for debt financing and that the company did not actively cooperate with its investigation.

Beijing-based Reward Group is a privately owned daily chemicals firm whose debts spiraled out of control late last year. It filed for bankruptcy in April after defaulting on seven bonds worth a total CNY4.6 billion (USD669 million), public data shows.

Editor: James Boynton

Follow Yicai Global on
Keywords:   Zhongxinghua,Reward Group