The actual controller of the first share of Amethystum Storage delisted from the Science and Technology Innovation Board was arrested on suspicion of fraudulent issuance of securities
The actual controller and persons acting in concert with the first share of Amethystum Storage delisted from the Science and Technology Innovation Board were arrested on suspicion of fraudulent issuance of securities.
On December 22, R Amethystum 1 (formerly Amethystum Storage), which has been delisted from the Shanghai Stock Exchange and is now on the New Third Board, announced that Zheng Mu, the actual controller of the company, and Luo Tiewei, the actual controller acting in concert, were suspected of fraudulent issuance of securities and were taken compulsory measures. The two are currently detained at the Meixian District Detention Center in Meizhou City, Guangdong Province. It is understood that the two have now been arrested by the Meizhou City Procuratorate. Previously, on December 18, R Amethystum 1 announced that Zheng Mu and Luo Tiewei had been included in the dishonest judgment debtors.
The announcement also said that the above events will have a significant adverse impact on the company's operations, and may involve a change in the actual controller, and it is uncertain whether it will have an impact on the company's finances. However, there is no risk of being terminated due to this penalty or treatment.
Financial fraud inflated revenue and profits, and the actual controller was suspected of the crime of fraudulent issuance of securities
R Amethystum 1 announced that the company understands that Zheng Mu and Luo Tiewei were criminally detained by the Meizhou Municipal Public Security Bureau on suspicion of fraudulent issuance of securities, which is consistent with the content of the illegal facts identified in the company's April 22 disclosure of the "Administrative Penalty Notice", and is a criminal measure taken against the illegal act.
According to the above-mentioned "Administrative Penalty Notice", the CSRC found that the "Prospectus" of Amethystum Storage falsely increased its operating income and profits by fictitious sales contracts, forged logistics documents and acceptance documents, arranged fund collection, and recognized revenue in advance. From 2017 to the first half of 2019, Amethystum Storage inflated its revenue by 222 million yuan and its profit by 85.99 million yuan. In addition, the balance of external guarantees at the end of 2016, the end of 2017 and the end of the first half of 2019 that Amethystum Storage did not disclose as required was 10 million yuan, 10 million yuan and 75 million yuan respectively. As of the signing date of the prospectus, the total balance of external guarantees was not disclosed as required, amounting to 135 million yuan.
The China Securities Regulatory Commission also found that after the listing, Amethystum Storage continued to inflate its operating income and profits through the above-mentioned financial fraud. In the 2019 annual report and the 2020 annual report, Amethystum Storage inflated revenue by 270 million yuan and 328 million yuan, and inflated profits by 145 million yuan and 169 million yuan respectively by carrying out false business and recognizing revenue in advance. In addition, from 2019 to 2021, Amethystum Storage failed to disclose the balance of external guarantees of 145 million yuan, 175 million yuan and 418 million yuan respectively.
The China Securities Regulatory Commission believes that Zheng Mu and Luo Tiewei are the directly responsible supervisors for the above-mentioned violations of laws and regulations, and in addition, Zheng Mu and Luo Tiewei, as the actual controllers of Amethystum Storage, organized and instructed them to engage in the above-mentioned violations of laws and regulations. According to the relevant regulations, the China Securities Regulatory Commission ordered Amethystum Storage to make corrections, gave a warning, and imposed a fine of 36.69 million yuan, Zheng Mu and Luo Tiewei were given warnings, and imposed fines of 21.64 million yuan, 18.04 million yuan and fines respectively, and other persons involved in the case were fined between 500,000 yuan and 2.2 million yuan. In addition, the China Securities Regulatory Commission also imposed a lifetime market ban on Zheng Mu and a 10-year market ban on Luo Tiewei.
The "first share of optical storage" was suspected of fraudulent IPO, and it became the first stock to be delisted from the Science and Technology Innovation Board
According to the official website, Amethystum Storage is an optical storage high-tech enterprise, providing optical storage media, magneto-optoelectronic hybrid storage systems, optical disc ferry systems, optical storage all-in-one solutions, industry solutions, data centers and cloud storage services for all kinds of users. The company was established in April 2010 and was jointly funded by Zheng Mu and Luo Tiewei, with a registered capital of 3 million yuan.
In 2010, Zheng Mu, who has more than ten years of experience in the optical disc industry, took a fancy to the optical storage outlet and returned to his hometown Meizhou to establish amethystum storage, the main product of which is a one-time recording Blu-ray disc. Facing the shareholder wind of optical storage, amethystum storage has been favored by capital repeatedly. According to the company's prospectus, the main shareholders of Amethystum Storage include Dachen Chuangtong and Dachen Chuanglian, Orient Securities Hand, Orient Securities Xiade and other well-known investment institutions. Among them, Dachen Chuanglian and Dachen Chuangtong have invested a total of about 125 million yuan in amethystum storage.
In February 2020, Amethystum Storage, with the halo of "the first share of optical storage", was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. On the day of listing, Amethystum Storage closed at 78.24 yuan per share, the share price rose 264.08%, with a total market value of 14.895 billion, and Zheng Mu, as the founder, also rose to 3 billion yuan.
However, after the listing, the performance of Amethystum Storage began to decline. In 2020, Amethystum Storage achieved an operating income of 563 million yuan, a year-on-year increase of 8.97%, but the increase in revenue did not increase profits, and the company's net profit attributable to the parent company was 104 million yuan, a year-on-year decrease of 24.71%. In 2021, Amethystum Storage's revenue will be 458 million yuan, a year-on-year decrease of 6.69%, and the net profit loss attributable to the parent company will be 229 million yuan, a year-on-year decrease of 379.85%. It is worth noting that Zhongxi Certified Public Accountants, as the auditor of Amethystum Storage's 2021 annual financial report, issued an audit report that could not express an opinion. This is also the first non-standard annual report on the Science and Technology Innovation Board.
On February 11, 2022, Amethystum Storage announced that the company was suspected of violating laws and regulations in information disclosure and had been investigated by the China Securities Regulatory Commission. On March 13, Amethystum Storage issued an announcement on the company's self-inspection involving illegal guarantees, stating that the company's self-inspection found that as of March 10 of that year, the company and its subsidiaries had a total balance of 373 million yuan in illegal pledge guarantees of fixed deposit receipts.
Since the implementation of the comprehensive registration system, Amethystum Storage is the first company suspected of fraudulent IPO, which has caused a shock in the science and technology innovation circle. On April 21, 2023, Amethystum Storage announced that due to fraudulent issuance and illegal information disclosure, the company will be forced to delist due to major violations. When trading was suspended, the share price of Amethystum Storage fell to 2.4 yuan per share, with a total market value of only 461 million yuan.
Written by: Peng Leyi, Xi reporter of Nandu Bay Finance Society