Hongwei manufactured and sold polyester fibres and was originally audited by E&Y who issued a disclaimer audit opinion in February 2011 in connection with its ability to verify cash balances. In a report in October 2011, the special auditors (KPMG) were unable to confirm the existence of RMB130m bank balances which made-up more than 99% of the purportedly available cash held by the Group. There was evidence of fabricated bank statements and sales invoices, undisclosed family ties, undisclosed bank account and the possibility of undisclosed accounting records.
The shares were suspended in February 2011 and delisted in 2013.
2010 RoPA was 46%
KPMG: Report on Independent Review, 21 Oct 2011
Hongwei Technologies: Annual Report 2010