Pharmaceutical company, Broad Intelligence, bought an integrated software, application and solutions provider in China for HK$1.3bn (US$170m) in 2009 and then changed its name to Anxin-China. Profitability took off and its share price rose more than 30-fold between early 2009 and mid-2013. However, the company issued a profit warning relating to FY13 results in March 2014 and then for FY14 results in February 2015. This precipitated a share price collapse. In March 2015, Anxin announced a delay in the publication of FY14 results as its auditors needed more time. The company's shares were suspended in line with exchange rules. Auditor BDO had found discrepancies in the banking records. The company tried to explain the discrepancy away but BDO resigned as management would not engage a forensic investigator to conduct an independent investigation. This seemed to prompt a proper investigation which finally revealed in March 2020 that most of the company's HK$2.5bn of cash at end-2013 was missing. Anxin had likely faked profits between FY09 and 1H13, hiding the evidence as fabricated cash balances. Anxin is a confirmed fraud.

Last updated October 2021

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