Hall of Shame
Anxin-China (1149 HK)
Anxin-China Holdings Limited, an investment holding company, produces and sells system hardware and application software for the installation of intelligent surveillance disaster alert and rescue coordination (ISD) systems in the People’s Republic of China. It listed on the HKEX in Nov. 2003
Public announcements made since mid‑March 2015 disclosed serious problems within the Company concerning its management and internal controls:
On 18 March 2015, the Company announced a delay in the publication of its 2014 results due it requiring additional time to provide information to its auditors.
By 31 March 2015 discrepancies had emerged between banking records provided by certain accounting staff and management accounts of the Company and various subsidiaries. As a result, the Company set up a special team to carry out a full investigation.
On the same day, trading was suspended.
On 8 May 2015 the Company announced that there was fraud committed by certain employees of the Company although, allegedly, it did not cause any loss to the Company. Nevertheless, it showed that internal controls might have been inadequate. The auditors took the view that the findings of the special team disclosed that fraud had been committed.
The auditors resigned on 11 May 2015 when the Company refused to appoint independent forensic accountants to conduct an independent investigation into the fraud. The auditors considered in those circumstances it would be impossible for them to continue the 2014 audit.
On 3 June HKEx imposed conditions for the resumption of trading and essentially requiring that it be satisfied on the discrepancies issue and the adequacy of the Company’s internal controls. As a result, on 11 June 2015, the Company appointed RSM Nelson Wheeler as independent forensic accountants.
On 24 September 2015, Cheung Chuen (“Mr Cheung”) an INED since September 2004 and a member of the Company’s audit, nomination, remuneration and corporate governance committees, resigned. It resulted in the Company not having sufficient INEDs as required by the listing rules.
On 25 September 2015 two significant events took place:-
- Sue Yang (the Company’s financial controller), doubting the integrity of certain member(s) of senior management, gave notice of her resignation, effective from 30 September 2015.
- The independent forensic accountants (appointed in June) resigned with immediate effect as they had serious concerns as to the information provided by the Group during the independent forensic review as well as the integrity of one or more member(s) of the Company.
The company was delisted on December 20, 2018.
Anxin China: Resignation of Auditor, 15 May 2015
Anxin China: Resignation of Financial Controller and the Independent Forensic Accountants - Sept. 25, 2015
HK High Court : Winding Up Judgement Jan, 20, 2017