Ruixing financial fraud investigation is released, administrative punishment is on the line

Original title: Ruixing’s financial fraud investigation is released, administrative punishment is on the line
Trainee reporter He Jueyuan
On July 31, the Ministry of Finance, the State Administration of Market Supervision and the China Securities Regulatory Commission successively issued investigation reports on Ruixing Coffee’s financial fraud. The China Securities Regulatory Commission revealed that recently, the China Securities Regulatory Commission has served the parties involved in the case with advance notice of administrative penalty. If the relevant responsible subject is suspected of committing a crime, it will be transferred to the public security and judicial organs for further accountability.
On the evening of the 31st, the Ministry of Finance first announced that the Ministry of Finance has completed the inspection of the accounting information quality of Ruixing Coffee Company’s domestic operating entities since May 6. The inspection found that from April 2019 to the end of 2019, Ruixing Coffee Company increased its transaction volume by 2.246 billion yuan and inflated revenue by 2.119 billion yuan (accounting for 41.16% of the 5.15 billion yuan disclosed to the outside world) through the fictitious commodity certificate business. The cost is 1.211 billion yuan, and the inflated profit is 908 million yuan. The Ministry of Finance stated that the next step will be to impose administrative penalties on the financial fraud of Ruixing Coffee’s main operating entities in accordance with the law, and promptly disclose the punishment results to the public.
Since then, the State Administration of Market Supervision issued an investigation report stating that since Ruixing Coffee “disposed” its financial fraud in April, the State Administration of Market Supervision quickly established a task force to investigate it. The investigation revealed that in order to gain a competitive advantage, Luckin Coffee (China) Co., Ltd. and Luckin Coffee (Beijing) Co., Ltd. had unfair competition behaviors that produced false performance and publicized them through false transactions, etc., and related third-party companies had false help. Propaganda of unfair competition. The market supervision department is dealing with the illegal activities of Luckin Coffee (China) Co., Ltd., Luckin Coffee (Beijing) Co., Ltd., and related third-party companies.
On the evening of the 31st, the China Securities Regulatory Commission issued a circular on the investigation and disposal of Ruixing Coffee’s financial fraud. According to the announcement, the China Securities Regulatory Commission, together with the Ministry of Finance, the State Administration of Market Supervision and other departments, conducted investigations into the suspected violations of laws and regulations by the domestic operating entities, related parties and related third-party companies of Ruixing Coffee in accordance with the law, and at the same time cooperated with the U.S. securities regulatory authorities to carry out cross-border investigations .
The China Securities Regulatory Commission stated that investigations by relevant departments showed that Ruixing Coffee’s domestic operating entities and related management personnel, and related third-party companies fictitious transactions, inflated revenue, costs, expenses, and false publicity, which violated China’s “Accounting Law”, The relevant provisions of the Anti-Unfair Competition Law. Ruixing Coffee’s domestically-linked NEEQ listed companies Shenzhou UCAR Co., Ltd. and Beijing Hydropower Yiwei Technology Co., Ltd. violated the relevant provisions of my country’s Securities Law. The Ministry of Finance, the State Administration of Market Supervision, and the Securities Regulatory Commission will impose administrative penalties on Ruixing Coffee’s domestic operating entities and related responsible persons, a number of third-party companies that assisted in fraud and false propaganda, two NEEQ affiliated companies and related responsible persons.
Since the beginning of this year, in response to the chaos in the capital market such as financial fraud, many departments have intensively stated their positions and have “zero tolerance” for illegal and criminal activities in the capital market. On July 11, the most recent meeting of the Financial Committee put forward the requirement for full implementation of “zero tolerance” for illegal and criminal acts in the capital market.