Pan Sino was a cocoa bean trader, which listed in Hong Kong in 2003. Shortly before the 2006 results were due to be published in March 2007, its auditor, PKF, resigned ostensibly due to a dispute over fees; no further reasons were provided. The company’s shares were suspended. The results had still not been announced by August, when the new auditor resigned again due to the failure to reach agreement on fees. The company finally published its 2006 results in December 2007, although the auditor’s report included a disclaimer as to whether the results presented a true and fair view. The auditor could not confirm whether sales had occurred or whether inventories, receivables, or deposits for construction in progress and for a JV with a major customer either existed or were recoverable. This third auditor resigned soon after the results were announced. The Chairman, who was also the controlling shareholder, was removed after he became uncontactable. The company was put into liquidation despite reporting HK$0.4bn of cash and no debt at its last balance sheet date. The company was ultimately de-listed in September 2011. It is unclear exactly what happened but it appears to involve fictitious sales and profit, offset with fake PP&E and JV progress payments/deposits created.
Pan Sino: Annual Report 2006