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Kai Yi-KY (2939-TW) issued serious news today (26), frankly admitting that the company has a number of internal control deficiencies, including the failure to evaluate the supplier, the failure to review the procurement objects, the payment without obtaining internal and external proofs, and even Although Kai Yi emphasized that these deficiencies have been thoroughly reviewed, the company did not give a clear answer when asked by President Cai Moucan about the transfer of large transactions in recent months. The incident claimed that it was “affected by an incident of fraud”, which still got the market talking about it.
Kai Yi recently reported that she feared being deliberately defrauded and had to recognize a contingent liability of 1 billion yuan, causing her share price to plummet in recent days. However, the reason was that it had signed several contracts for the sale of light cycle oil worth around 500 million euros. It is completely different from its previous businesses such as kitchen use and daily necessities, and Kaiyi’s registered capital is only 457 million yuan.
In accordance with the requirements of the competent authority and based on the principle of disclosure of information, Kaiyi today explained the compliance with the internal control system for the purchase of medical gloves and the purchase and sale of light cycle oil.
In this important news, Kaiyi admitted that there was no internal supplier management operation based on internal control to evaluate suppliers, and the light cycle oil purchase contract and the oil purchase contract did not follow the operation of purchase requested. Audit, that is, the contract is signed by the responsible supervisor.
Regarding payment operations, Kaiyi stated that the responsible supervisor did not review the relevant vouchers in accordance with the payment regulations and paid 2.377 million yuan (about 68,000 euros) related to the oil purchases to Tiancheng Trading before obtaining the internal and external vouchers for procurement procedures. Group Co., Ltd.
In addition, in the sale and collection cycle, only the signing of the contract and the commercial license were attached, and the establishment of basic customer information and credit line request forms were not processed.
Regarding the management method and the printing process for the use of seals, the review process for the two procurement cases of medical gloves and light recycled oil is not synchronized with the printing process, but the contract drafting process It is done after review and printing, resulting in the contract signing date prior to the review date. The scandalous situation.
Kai Yi also candidly admitted that internal risk assessments were not carried out in accordance with sales and collections plans, and no contingency plans were proposed for potential risks.
Kaiyi emphasized that a comprehensive review of these deficiencies will be based on the audit committee’s requirements to raise the level of decision-making and the establishment of government directors, compliance with internal control and evaluation of personal and departmental performance, and the amount of exposure will be limited.
However, the whole incident is not only Kaiyi’s lack of internal control, but Cai Moucan, the president of Kaiyi, successively carried out large transfer transactions through Moucan Holdings on May 29, June 23, and 25. September of this year, which were 6,800 and 1,500. Zhang and 1500, the stock price was still around 130 yuan between May and June. When asked if there was a question about insider trading, Kaiyi replied that it was inappropriate to answer. The use of inside information was determined by the competent authority.
However, when the contracting parties to these light cycle oil contracts were questioned by the outside world, Kaiyi was even identified as a company with false statements, to which Kaiyi responded by signing the contract in accordance with internal control.
Kai Yi candidly said that there was indeed operational pressure from the epidemic, but internal control did not prevent risks from occurring. It was purely a lack of compliance. The accountant did not issue a qualified opinion and acknowledged that the incident was a fraud.
The legal entity once again reminded investors that Kaiyi had a cumulative loss of 56.46 million yuan in the first three quarters and a loss of 1.22 yuan per share. In addition, an independent director from Kaiyi has recently resigned. Additionally, Kaiyi did not elaborate on the board chairman’s huge transaction. It is still necessary to observe the further development of the entire incident and pay attention to the risks.
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