CCTV News:Recently, the CSRC investigated and dealt with a cross-border financial fraud case of a listed company, which not only bought and sold its own building materials, but also faked transnational business. Moreover, I also want to take advantage of the "One Belt, One Road" east wind to make fake business in Pakistan. However, after cross-border investigation by the regulatory authorities, participating in Pakistan’s projects is completely false, and the company has lied in the annual report.
In August, 2015, Yabate successfully went public by backdoor. The annual report of that year showed that Yabate’s income from the urban rapid transit line project with Multan, Pakistan exceeded 200 million yuan, accounting for 21.8% of the total annual sales. The transnational business of such a large order makes Yabate’s annual report "sparkling". However, the investigators found that this income was problematic.
Investigators of CSRC:As far as the capital chain is concerned, after our investigation, the payback of Yabate mainly comes from the company controlled by Yabate itself, and there are other companies in China, which are not transferred by the Pakistani side at all.
It is understood that the owner of Multan project in Pakistan is Multan Development Agency, with a total investment of more than 350 million US dollars. However, the Multan Development Agency has not cooperated with Yabate at all, and the income mentioned in the annual report is completely false.
Investigators of CSRC:The investigation found that Abbott did not participate in the construction of this project at all. It found an overseas company to forge a false construction contract, but the contract was never fulfilled.
In order to lie, Yabate also directed and performed a "good play" of exporting building materials to Pakistan.
Investigators of CSRC:In the process of building this project, Yabate exported a batch of building materials overseas, and their company claimed that these building materials were used for the construction of this bus station in Multan, Pakistan. However, after our investigation, we found that these building materials were not actually shipped to Pakistan, but were imported back through a third-party company, which achieved the illusion that a fictitious overseas project was under construction in this way.
The CSRC once asked the company and relevant intermediaries to go to Multan to verify the project, but the relevant personnel of Yabate have never been to Multan, Pakistan, and the photos of the construction site are all fake.
73% profit fraud of Yabate
The biggest gain in the annual report turned out to be fraud, and Yabate Company is indeed courageous. However, the investigators found that in addition to counterfeiting this large transnational bill, Abbott had even more bizarre lies.
In 2015, Yabaite transferred the funds to its affiliated companies such as Shanghai Yuanpan and Shanghai Xuanyi by means of false procurement, and then transferred the funds back in the name of sales money through customers such as Shanghai Gui Liang and Shanghai Jiuren, so as to build a capital cycle and forge a "real" capital flow.
In the same year, Yabate forged false export contracts for building materials with overseas companies, transported the goods declared for export to Angola to Hong Kong, and then imported the goods back to China by its affiliated companies.
Investigators of CSRC:He transferred the money from domestic companies to the customs in the form of international trade, and then transferred the money back to China from the customs in the form of import, in this way to forge a real fund.
It is confirmed that from 2015 to September 2016, Yabate inflated its operating income by about 580 million yuan and inflated its profit by nearly 260 million yuan through fictitious overseas engineering projects, fictitious international trade and domestic trade, among which inflated profit in 2015 accounted for about 73% of the total profit for the current period.
Exclusive exposure of 1 billion yuan of fake accounts from 20 square meters stores.
In 2015, 73% of Yabaite’s profits were false. Yabaite worked hard to falsify its performance. Why?
It is understood that Yabaite is willing to make fraud, which is related to performance gambling.
Investigators of CSRC:First of all, in order to fulfill the performance promise and increase the income falsely, this is his purpose. Because he has made a commitment to the performance in 2015, 2016 and 2017, he must meet certain standards, otherwise he will use shares to make compensation.
Investigators found that Yabaite’s fraud cost was extremely low, and hundreds of millions of dollars of bills were actually completed in a 20-square-meter cabin in Shanghai. During the investigation, the inspectors found that there was only one accountant and one assistant who didn’t understand accounting in this shop, but they managed the capital flow of six major suppliers and four billing companies of Yabate.
Investigators of CSRC:The financial personnel of these six major suppliers and four accounting companies have only one financial manager, He Mou, and then he has an assistant, who is not a financial person and does not know much about accounting, but the capital flow in 2015 has reached nearly 1 billion.
In order to falsify, Yabate used more than 50 companies in 7 countries and regions to transfer funds, more than 100 bank accounts, and often transferred funds through bank bills and third-party payments, with complicated channels. In order to verify these account information, inspectors have almost traveled to all major banks in Shanghai.
Resist the investigation of the suspect’s "hurricane" acting skills
As the case became clear step by step, the investigators began to inquire about the relevant personnel of Yabaite, but they encountered unexpected things.
Investigators of CSRC:At that time, when we investigated Abbott, we found that many of its bookkeeping companies and suppliers were shell companies, so we asked Abbott to provide the contact information of suppliers to the CSRC, and Abbott has been shirking. After our repeated urging, they gave us the contact information of Han, a company called Yixun New Energy’s actual control.
Investigators immediately asked Han about the business development of Xunxun New Energy. Contact found that Han was actually a "smoke bomb" placed by Yabate to "fool" investigators and delay time.
Investigators of CSRC:In the case of our pressing step by step, he just couldn’t get the lie round, and then he struck a table with us, saying that the business of shining new energy was his privacy, and the China Securities Regulatory Commission had no right to investigate him.
Through the smoke bomb, the investigators finally found the core personnel of the case.
Investigators of CSRC:When our staff were investigating and collecting evidence, a man with dark skin suddenly came. When he saw that we were retrieving the document from the computer, he immediately turned off the switch of the shop. He told us that this was their privacy and our CSRC had no right to retrieve it. Then, after asking, we found out that he was the one who participated in the fraud.
Li is a key role. Li is the vice president of Yabate and the president of the key account division in the internal address book of Yabate, and conducts business as an employee of Yabate, but actually has no formal labor contract relationship with Yabate. At the same time, he is the controller of seven Yabaite suppliers, including Shanghai Xuanyi. Through Li’s manipulation of the upstream and downstream companies of Yabate, the investigators found that the fictitious trade between Yabate and these companies was nested and extremely complicated.
Overseas investigation creates new efficiency of supervision.
In order to avoid the investigation, Yabate chose to lie abroad. I thought it was a lie, and the CSRC could not reach that far. But they didn’t expect that the CSRC used the big trick of cross-border investigation.
Because Yabaite’s fraud involves cross-border trade, involving Pakistani, Singaporean, American and other places, it received a request from the China Securities Regulatory Commission, and the local securities regulatory commission gave strong assistance, and mastered the core evidence within one month, which greatly increased the efficiency of the case process and achieved remarkable results.
Investigators of CSRC:The construction site and the performance site of the project are all overseas. Yabate may consider that the China Securities Regulatory Commission may not have the strength to conduct this investigation and can go to Pakistan to investigate. However, in recent years, China Securities Regulatory Commission has signed memorandums with securities regulators in more than 60 major countries and regions around the world, and we can seek the help of these regulators through international investigation.
Multi-pronged anti-counterfeiting by CSRC in progress
It is understood that the Yabaite fraud case is the first batch of special enforcement actions of the CSRC in 2017, which refers to the financial fraud of listed companies that the market hates. Such cases are characterized by large-scale fraud, hidden fraud methods, systematic fraud, obvious cross-border trend and many anti-investigation methods, which are extremely harmful to the market.
Yabate’s financial fraud case is the first cross-border manipulation case of Shanghai-Hong Kong Stock Connect — — After Tang Hanbo’s market manipulation case, the CSRC investigated another cross-border illegal case. At the end of last year, relying on the law enforcement cooperation mechanism of Shanghai-Hong Kong Stock Connect, the Tang Han case was successfully uncovered, ensuring the smooth progress of the interconnection of the capital markets of the two places.
The CSRC said that it will further strengthen criminal law enforcement cooperation with public security and judicial organs; Continue to strengthen the front-line supervision function of the exchange, and continue to severely investigate and deal with financial fraud of listed companies. Once verified, they will be thoroughly investigated.