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Fuwei Films Holdings (RTC US)

Year: 2007

Chinese plastic film manufacturer Fuwei Films listed on the NASDAQ Global Markets Index in 2006. In June 2007, the company announced that it was aware that three of its major shareholders were being investigated for selling state-owned assets at low prices. They were subsequently arrested in October and sentenced in March 2009. Over this period, Fuwei's share price lost over 90% of its value. Matters had been compounded by deteriorating financial performance plus auditor and CFO rotation. Although there were no accusations of the company faking profits, its financials in FY06 and FY07 triggered both Beneish's M-Score for profit manipulation plus our Fake Cash Flow Fraud model, suggesting traits in line with past frauds. The company is still listed. As such, Fuwei is not a confirmed fraud.

Last updated February 2022

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