Recently, Ingenious Ene-carbon New Materials Co., Ltd. (hereinafter referred to as ‘Extra ST Ene-carbon’ or ‘the Listed Company’) failed to disclose periodical report timely, SZSE firstly informed the market of relevant situation, immediately started the disciplinary proceedings, timely sent the Prior Notice on Disciplinary Actions to the Listed Company and its audit firm and relevant parties concerned, and then heard the statement and pleadings of relevant parties concerned, and finally make the decision of disciplinary actions to them.
Extra ST Ene-carbon received an auditor’s report with a disclaimer of opinion for 2015 financial report, so it was implemented the delisting risk warning. There are obvious disputes about the accounting treatment for disposing partial equity stake of a subsidiary in 2016 by the Listed Company, however, until its appointment of audit firm on 24 April, 2017, it didn’t issue any risk reminder announcement on possible suspension of listing for its stocks or disclose reminder announcement on periodical report within a specified time limit, then it disclosed relevant risk reminder announcement on 28 April, 2017, but finally, it didn’t disclose 2016 Annual Report and 2017 First Quarterly Report before 30 April, 2017 according to relevant regulations. Zhongxinghua Certified Public Accountants LLP, as the audit firm for 2016 Financial Report of the Listed Company, failed to diligently and responsibly complete relevant audit work and issue relevant auditor’s report on time, and didn’t timely inform the Listed Company of failure in completing the audit work before the scheduled disclosure date of annual report, until 27 April, 2017, it told the Listed Company that it failed to complete relevant audit work as scheduled, therefore, it should bear important responsibility for the Company’s failure in disclosing 2016 Annual Report before 30 April, 2017, risk reminder announcement on possible suspension of listing for its stocks, and reminder announcement on periodical report within a specified time limit.
Extra ST Ene-carbon failed to fulfill the legal obligation for disclosing periodical report and publishing relevant risk reminder, SZSE had implemented trading suspension for its stocks since 2 May, 2017, and seriously punished the Listed Company and its audit firm as well as relevant parties concerned. Public censure was made to the Listed Company’s main responsible directors, supervisors and senior management, audit firm (Zhongxinghua Certified Public Accountants LLP) and certified public accountants. Meanwhile, the illegal clues of relevant parties concerned had been reported to CSRC for investigation, and the Listed Company had received the notice on initiating an investigation from CSRC on 12 May, 2017. Relevant department of SZSE said that it would continuously urge the Listed Company and its audit firm to disclose periodical report according to relevant regulations, and make serious investigation into other possible illegal behaviors in its periodical report.
A person in a responsible position in SZSE expressed that information disclosure is the cornerstone of securities market, and that listed companies, all the directors, supervisors and senior executives shall strictly perform their disclosing obligations in accordance with laws and regulations. Accounting firms and their registered accountants are the gatekeepers of the security market, who shall pay full attention to audit risks in practice, cautiously and prudently accept their consignments and earnestly fulfill their auditing responsibilities. To seriously deal with Extra ST Ene-carbon, its auditors and relevant persons, SZSE was following the instructions given by President Liu Shuyu in the 2017 SZSE Members’ General Meeting to actively and fully exercise the supervisory power in accordance with laws and to actually take the responsibilities as a first-line supervisor. Next, SZSE shall adhere to the principal of strict regulation in accordance with laws, further exercise the regulating and supervising power of a first line regulator, strengthen the supervision on listed companies and relevant intermediate institutions, maintain the orders of the capital market, and fully protect the interests of board investors.
