Chinese milk powder company Daqing Dairy listed on the Hong Kong Exchange in November 2010. Less than 18 months later, in March 2012, auditor Deloitte resigned as it was unable to complete the audit for FY11. In January 2013, the company announced that accounting records had been destroyed in a flood and the special committee could not complete the forensic review. Our analysis of the last published annual accounts, for FY10, suggest Daqing had traits similar to past frauds and was likely faking profits and then hiding the evidence in fabricated cash balances. Management appear to have run off with the IPO proceeds. The listed vehicle has been reused for the back-door listing of a Cantonese style hotpot restaurant business in China called Longhui International.
Last updated October 2021
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