There was a forced sale of 1.7m shares in the company by the company’s president which caused a substantial fall in the share price in March 2008. In April 2008 the auditors issued a qualification audit opinion relating to an associated company’s contribution in the group’s consolidated income statement and an emphasis of matter relating to going concern. An independent director resigned in October 2008 citing difficulty in getting information from the executive directors and lack of support for a special audit. The PWC audit highlighted suspicious payments of RMB291m to acquire a business. Investigations by the auditor revealed that it was uncertain whether the company was able to meet its financial obligations.
Company was placed under Judicial Management in September 2009. CEO and another key personnel failed to provide the judicial managers with the necessary information and assistance. CEO failed to disclose in particular that he was adjudged a bankrupt on 10 September 2009. Company was subsequently delisted on 5 May 2011.
PWC: Auditor Report, 6 Apr 2009