(Yicai Global) Dec. 28 – Chinese manufacturer of electronic vision products Jiangsu Protruly Vision Technology Group [SHA:600074] will not resume production in three months as it faces some financial problems, the company said in a statement yesterday. The company statement follows news that former controller Zhuang Min has misappropriated a substantial amount of assets belonging to the firm.
The cash flow crunch has affected both upstream and downstream supply chains, and the firm is unable to accept orders due to raw material shortage, said the statement. The situation deteriorated following a significant fall in order volume and an upsurge in staff turnover. The company is in a state of semi-suspension, it warned.
Furthermore, banks have blocked 19 of Protruly's 21 accounts. CNY180 million, or 75.31 percent, of the firm's CNY239 million (USD36.5 million) cash balance is frozen.
Zhuang Min embezzled CNY6.7 billion worth of company assets under the guise of external investment, accounts receivable and large-sum prepayment transactions, the firm disclosed in an earlier investigation report. Protruly's total liabilities currently stand at CNY4.4 billion, of which CNY930 million is overdue debts.
The company carried out a backdoor listing on Shanghai Stock Exchange in 2015. Back then its former chairman Zhuang Min had a 35 percent stake, but he has sold 25 percent equity to a new controlling shareholder. China's securities regulator has opened an investigation into the company and Zhuang Min.