GuShiio.com ① The China Securities Regulatory Commission has opened an investigation into Dongfang Group’s suspected major financial fraud. Its financial information from 2020 to 2023 was seriously false, which may involve major illegal and forced delisting.
② Dongfang Group’s share price has doubled sixfold, but now it closes at 2.14 yuan/share, with a market value of 7.83 billion yuan.
Financial Union reported on February 28 that according to the website of the China Securities Regulatory Commission, the China Securities Regulatory Commission reported the progress of the phased investigation into the financial fraud case of Dongfang Group.
On June 20, 2024, the China Securities Regulatory Commission opened an investigation into Dongfang Group Co., Ltd.(referred to as Dongfang Group, 600811). It has been initially ascertained that the financial information disclosed by Dongfang Group from 2020 to 2023 is seriously false and is suspected of major financial fraud, which may involve major illegal forced delisting. The case is currently under investigation, and the CSRC will find out the illegal facts as soon as possible and deal with it seriously in accordance with the law.
The China Securities Regulatory Commission said that financial fraud by listed companies seriously harms the interests of investors. The China Securities Regulatory Commission will investigate and deal with all types of fraud strictly and quickly, and strengthen three-dimensional accountability for administrative, civil and criminal matters. For listed companies that are involved in major illegal and compulsory delisting situations, the delisting system will be strictly implemented, such “black sheep” will be resolutely eliminated, and counterfeiters will pay a heavy price.
According to the previous financial reports disclosed by Orient Group, during the period from 2020 to 2023, the company’s revenue exceeded 10 billion yuan in three years. In addition to achieving a profit in net profit in 2020, it has suffered losses in net profit for three consecutive years since then.
In 2020, the company’s operating income was 14.711 billion yuan, a year-on-year increase of 11.63%, and the net profit was 240 million yuan, a year-on-year decrease of 58.8%;
In 2021, the company’s operating income will be 13.729 billion yuan, a year-on-year decrease of 6.68%, and the net profit loss will be 1.719 billion yuan, a year-on-year decrease of 814.81%;
In 2022, the company’s operating income will be 11.265 billion yuan, a year-on-year decrease of 17.94%, and the net profit loss will be 996 million yuan, a year-on-year increase of 42.08%;
In 2023, the company’s operating income will be 6.081 billion yuan, a year-on-year decrease of 46.02%, and the net profit loss will be 1.557 billion yuan, a year-on-year decrease of 56.38%.
It is worth mentioning that after Dongfang Group’s stock price bottomed out in early July last year, its subsequent stock price increased by more than five times. As of now, the stock price has closed at 2.14 yuan/share, with a market value of 7.83 billion yuan.
Since the beginning of this month, Dongfang Group has issued many announcements on the progress of the investigation and risk warnings. The company stated that Dongfang Group was investigated by the China Securities Regulatory Commission on suspicion of illegal information disclosure. If the investigation results touch on a major illegal and compulsory delisting situation, the company’s shares will be delisted.
The announcement mentioned that the company is at risk of not meeting the conditions for reorganization. Because it has been investigated and there is a risk of delisting, it does not have the value of reorganization as a listed company.
In addition, the announcement also mentioned the issue of the return of raised funds. Orient Group reminded that the company used 628.98 million yuan of idle raised funds to temporarily replenish working capital on March 6, 2024, and is expected to be unable to return it to the special account on schedule.
