vintagearcadenearme| Shilong Industrial's financial fraud will be punished by ST, but some investors will not suffer injustice

Every commentator Jia Yunke

Recently, the Jiangxi Securities Regulatory Bureau issued a "decision on administrative penalty" for financial fraud in its wholly-owned subsidiary Shilong supply chain between 2019 and 2020. It has been found out that the total false profit of Shilong supply chain in 2019 is 573.Vintagearcadenearme.170,000 yuan, accounting for 29.09% of the total profits disclosed by Shilong in the current period, and 11.7841 million yuan in 2020, accounting for 6.62% of the total profits disclosed by Shilong in the current period. Shilong's financial fraud has not only affected the company's reputation, but also caused its shares to be subject to "other risk warnings" (ST). In the face of the fact of financial fraud and the strict attitude of regulation, the losses of investors seem inevitable, but this is not the case.

The author noticed that Shilong Industry announced and received the "advance notice of Administrative punishment" from Jiangxi Securities Supervision Bureau on the evening of March 12, which was precisely related to financial fraud in Shilong's supply chain. Jiangxi Securities Supervision Bureau intends to decide: to order the company to correct, give a warning and impose a fine of 2.8 million yuan; give a warning to Zhang Haiqing, the then general manager, and Wang Dazhong, the then deputy general manager, and impose a fine of 1.4 million yuan respectively, and so on.

However, the regulatory sword did not seem to bring the expected deterrence, and Shilong's share price fluctuated sharply in the short term after the announcement of the penalty. The company's shares have risen by 15.89% since March 13, the day after the announcement, to April 3. Although the share price has since experienced a rapid decline, it rose rapidly after April 17, and by May 7, the range rose as high as 28.77%. This phenomenon suggests that some investors may take a fluke, hoping to profit from short-term fluctuations, while ignoring the long-term risks of financial fraud.

Financial fraud often indicates that there are major problems in the operation and management of companies, and future performance and stock prices may face greater uncertainty and downside risks. Therefore, investors must be rational in the face of risk events and should not blindly chase the rise and fall. Financial fraud is not only a serious violation of market rules, but also a serious harm to the trust of investors. The case of Shilong Industry warns again.VintagearcadenearmeWe, in investment decisions, risk management and prudential analysis are more important than short-term market volatility. If you ignore the risk and participate in the market speculation with the psychology of gamblers, it is not surprising that there will be losses.

In addition, behind the financial fraud case of Shilong Industry, Dahua Accounting firm is also involved (hereinafter referred to as Dahua Institute). Dahua not only failed to fulfill its responsibility in Jin Tongling's financial fraud case, but also issued a "standard unqualified opinion" audit report in Shilong's financial reports in 2019 and 2020. The so-called "standard unqualified opinion" means that no problems have been found, and this erroneous audit results cover up financial fraud and aggravate the misleading to investors.

Freezing was not built in a day. Dahua's audit dereliction of duty in many cases indicates that there may be serious loopholes in its internal management and supervision mechanism. For such an auditor caught in the quagmire of financial fraud, it is necessary for regulators to conduct spot checks on the companies they have handled in recent years in order to comprehensively assess their practice quality and compliance. Only through strict supervision and comprehensive audit inspection can we maintain the fairness and transparency of the market and protect the legitimate rights and interests of investors.

Shilong's financial fraud warns investors to be rational in stock investment, not to blindly follow the short-term fluctuations of the market, but to pay attention to the company's fundamentals and risk factors. At the same time, the supervision of audit institutions should also be strengthened to ensure that they can perform their duties diligently and maintain market order. When choosing the investment target, investors should not only pay attention to the company's financial statements, but also pay attention to the reputation and professionalism of audit institutions in order to reduce investment risk.