The cumulative inflated income is nearly 23.1 billion yuan. Kingenta and "fertilizer...

According to the official website of the China Securities Regulatory Commission, the China Securities Regulatory Commission recently issued an administrative penalty decision on Kim Zhengda

After investigation, Kim Zhengda has the following illegal facts:

1.

From 2015 to the first half of 2018, Kingenta and some of its subsidiaries within the scope of the consolidated financial statements, through fictitious contracts with its suppliers, customers and other external units, idled funds, and carried out fictitious trade business without actual logistics, accumulatively inflated income of 2,307,345.

2.

(1) Kingenta failed to disclose its affiliated relationship and affiliated transactions with Nobeifeng (China) Agriculture Co.

1.

Wan Moujun is the sister of Wan Lianbu, the actual controller, chairman and general manager of Kimenta

Kingenta disclosed Noble Fung as a related party in its 2018 and 2019 annual reports.

2.

In 2018 and 2019, Kingenta paid RMB 5,545,054,400 and RMB 2,529,019,800 of non-operating funds to Nobeifeng respectively through prepayments, which were not disclosed in the 2018 and 2019 annual reports as required, and were not disclosed in the 2018 Annual Report.

Most of the above-mentioned funds are allocated to the external fund pool by Kingenta, and the funds in the fund pool are mainly used for fictitious trade capital circulation, repayment of loan principal and interest, and asset operation outside the system

(2) Kingenta failed to disclose its affiliated relationship and affiliated transactions with Fulang (China) Biotechnology Co.

Wan Moujun holds 100% equity of Fulang (China) Biotechnology Co.

In 2018, Kingenta purchased goods from Fulang of 33.

To sum up, according to Articles 51 and 52 of the "Compilation Rules for Information Disclosure of Companies Offering Securities to the Public No.

3.

(1) Kingenta inflated bills payable

From July 2018 to June 2019, Kingenta, as the drawer and acceptor, paid Linyi Vangoo Agricultural Materials Sales Co.
, Ltd.
, etc.
7 through four banks including Baoshang Bank, China Minsheng Bank, Huaxia Bank, and Zheshang Bank.
A company involved in the aforementioned fictitious trade business issued a commercial acceptance bill with a cumulative amount of 1,028 million yuan
.
Kingenta did not perform accounting treatment on the above commercial acceptance bills issued by it, resulting in the false reduction of bills payable and other receivables of RMB 928 million in the 2018 Annual Report, and the false reduction of bills payable and other receivables in the 2019 Semi-annual Report.
Other receivables amounted to RMB 1,028 million
.

(2) Kimenta falsely increased the number of products issued

In order to solve the large prepayment balance and the falsely estimated inventory balance, and to digest the inventory deficit problem, Kingenta fabricated production by using the falsely estimated raw materials and the actual inventory that has been depleted, fictitious electricity and labor costs, etc.
In the process, the production of finished products was falsely increased by 2,544,128,400 yuan, and through the false delivery process, it was included in the issued commodity account
.
At the same time, Kingenta will also count the 653,023,300 yuan of goods falsely purchased from Nobeifeng and temporarily estimated to be put into the warehouse, which will also be included in the item of issued goods, resulting in 3,197,151,700 yuan of goods issued
.
The above situation resulted in an inflated inventory of 3,197,151,700 yuan, a total of 141,812,600 yuan of inflated profits and 14,358,400 yuan of inflated liabilities (other payables/employee compensation payable) in Kingenta's 2019 Annual Report
.

To sum up, the "2018 Annual Report", "2019 Semi-annual Report" and "2019 Annual Report" disclosed by Kingenta contained false records
.

Wan Lianbu, the actual controller, then chairman and general manager of Kingenta, made decisions on the aforementioned fictitious trade business, falsely increasing the issuance of goods, etc.
; he knew the real relationship between Kingenta and Nobel, Fulang, and Nortel; Participated in the decision-making of Kingenta's transfer of non-operating funds to Nobel; it was known that Kingenta issued bills to some companies involved in fictitious trade business for financing
.
Li Jiguo, then deputy general manager and chief financial officer, participated in the decision-making of the aforementioned fictitious trade business, transfer of non-operating funds to Nobel, inflated goods, and falsely reduced bills payable; knew or should have known about Kingenta and Nobel real relationship between them
.
Tang Yong, then the manager of the finance department and director of the financial center, participated in the negotiation and was responsible for the specific organization and implementation of Kingenta's fictitious trade business, the transfer of non-operating funds to Nobeifeng, and the false increase in the issuance of goods; participated in the negotiation of false reduction of bills payable; Know or should know the real relationship between Kimenta and Nobel, Furlong, and Notaire
.
Cui Bin, then director, secretary of the board of directors, deputy general manager, participated in the industrial and commercial registration procedures of Nobel, Furlong and Notaire, and participated in the arrangement of directors of Nobel, Furlong and Notaire, etc.
, and failed to pay attention to and further Verify the relationship between Nobel, Fulang, Nottel and Kingenta; participate in decision-making to inflate the issuance of commodities
.
Gao Yiwu, the then director and deputy general manager, worked in a related Kimenta subsidiary that participated in fictitious trade during the period involved in the case, knew and participated in fictitious trade business matters, and knew that the data disclosed in Kimenta’s regular reports since 2015 were inconsistent with the actual data
.
Yan Mingxiao, the then deputy general manager, cooperated with the financial department to perform the relevant approval procedures for fictitious trade business and payment to Nobel, and participated in the approval procedures for foreign payments by Furlong and Nottel.
The relationship between Notaire and Kim Zhengda
.
Zheng Shulin, the then deputy general manager, cooperated with the financial department to perform the approval procedures related to fictitious trade business; was responsible for the construction of Nobel, Fulang, and Notell projects, and participated in the approval procedures for external payments of Nobel, Fulang, and Notaire.
Failed to pay attention to and further verify the relationship between Nobel, Furang, Nottel and Kimenta
.
Xu Hengjun, the then deputy general manager, cooperated with the financial department to perform the relevant approval procedures for fictitious trade business
.
The above-mentioned directors and senior management have signed written confirmation opinions on their periodic reports during their term of office
.

The above facts, as evidenced by Kingenta's relevant periodic reports and announcements, financial information, meeting resolutions, situation explanations, financial information and situation explanations provided by relevant customers and suppliers, bank flow and bill inquiry information, and relevant personnel inquiry records, are sufficient to prove that identified
.

I would think that the "2015 Annual Report", "2016 Annual Report", "2017 Annual Report", "2018 Annual Report", "2019 Annual Report" and "2018 Semi-Annual Report", "2019 Annual Report" publicly disclosed by Kingenta There are false records in the semi-annual report.
The above-mentioned behavior of Kingenta violated the second paragraph of Article 78 of the Securities Law and the provisions of the semi-annual report and annual report of Article 79 of the Securities Law.
The circumstances described in the second paragraph of Article 197
.

The above-mentioned acts of relevant directors and senior managers of Kingenta violated the provisions of paragraph 3 of Article 82 of the Securities Law and the provisions of paragraphs 1 and 3 of Article 58 of the Measures for the Administration of Letters and Disclosures.
The circumstances described in Paragraph 2 of Article 197 of the Securities Law
.
Among them: Wan Lianbu was fully responsible for decision-making and organized the implementation of the above-mentioned illegal acts, Li Jiguo and Tang Yong organized and participated in the above-mentioned illegal acts, failed to perform their duties with due diligence, and were the directly responsible persons in charge, and Wan Lianbu and Li Jiguo's illegal circumstances were more serious, Tang Yong's illegal circumstances are serious
.
Cui Bin, Gao Yiwu, Yan Mingxiao, Zheng Shulin, and Xu Hengjun were aware of and participated in the above-mentioned illegal acts, and they failed to perform their duties with due diligence.
They are other directly responsible persons
.

In addition, Wan Lianbu, as the actual controller of Kingenta, made decisions and instructed relevant personnel to carry out financial fraud, concealed related relationships and related transactions, and his actions also constituted the actual control mentioned in Article 197, paragraph 2 of the Securities Law.
people's situation
.

Jin Zhengda, Wan Lianbu, Tang Yong, Cui Bin, Gao Yiwu, Yan Mingxiao, Zheng Shulin, Xu Hengjun and their agents proposed: First, the 2005 Securities Law should be applied to this case
.
During the epidemic, the stock exchange allowed listed companies to postpone the disclosure of annual reports, resulting in a delay in the disclosure of Kimenta's 2019 annual reports compared with previous years
.
Jinzhengda's illegal acts involved in the case all occurred before the revision of the new Securities Law.
"(Revised in 2021) Article 37 on "respecting the old and the lighter" provisions shall be punished by the Securities Law of 2005
.

Second, there are circumstances of lighter or reduced punishment in this case
.
First, Kingenta actively rectified and truthfully disclosed the violations confirmed in the "Advance Notice"
.
From the second half of 2018, Kingenta stopped the illegal activities of fictitious trade business and falsely inflated income and profits, and backed off some false amounts at the end of 2018; the falsely reduced bills payable from July 2018 to June 2019 have been reported in 2019 and 2020.
The annual report shows that the inflated inventories, profits and liabilities in the 2019 annual report have been reversed in the 2020 annual report; in the "Announcement on the Confirmation of Daily Related Party Transactions in 2020 and the Prediction of Daily Related Party Transactions in 2021", the concealed information was disclosed in a timely manner.
Related parties Fulang, Nottel and related transactions; the harmful consequences of information disclosure violations have been mitigated
.
Second, Kingenta actively promoted the repayment of the occupied funds by the related party Nobel, and took measures such as the establishment of a bailout fund, the bankruptcy and reorganization of the holding company, and the resolution of non-standard matters to actively promote the risk resolution work, and strive to improve the financial situation
.
The third is that Kimenta maintains stable operations and maintains corporate value after the investigation
.

Third, the request to postpone the administrative penalty
.
Kingenta is currently in the most critical period of active rectification, recovery, elimination of risks, bankruptcy and reorganization of the controlling shareholder.
In order to maintain the stability of the existing management team and avoid penalties leading to management changes, we urge the decision to make administrative penalties after the end of March 2022.

.

In addition to the above statement and defense, Tang Yong also proposed that he only served as the manager of Kingenta's financial department during the period involved, and did not serve as a director, supervisor, or senior manager
.

To sum up, Jin Zhengda and the aforementioned responsible persons request mitigation of punishment
.

Li Jiguo and his agent pointed out: First, there is a deviation in the factual determination of this case, and the division of responsibilities is unclear
.
Li Jiguo did not have the subjective motivation to actively organize and participate in financial fraud, and objectively did not actively organize and participate in fraud.
During the period involved in the case, he was only the nominal financial person in charge of Kingenta, mainly responsible for external affairs coordination, and his participation in financial affairs was not high, so it was not financial fraud.
the main responsible person
.
His behavior did not fall into the more serious circumstances stipulated in the "Regulations on Prohibition of Entry into the Securities Market" (Order No.
115 of the China Securities Regulatory Commission)
.

Second, this case did not fully consider the facts, nature, circumstances and degree of social harm of the illegal act
.
First, Li Jiguo actively cooperated with the investigation, took the initiative to explain the illegal behavior, and cooperated with Jin Zhengda to take corresponding measures to eliminate or reduce the harmful consequences of the illegal behavior; second, the "Advance Notice" failed to accurately identify the degree of participation and specific responsibility of Li Jiguo in the financial fraud.
, the results of the proposed treatment are biased; third, the proposed market entry prohibition measures are too heavy and unfair compared with the cases in the same period; fourth, the result of the punishment will have a negative impact on the equity reorganization and production and operation of Li Jiguo's current company
.

To sum up, Li Jiguo requested a lighter or reduced administrative penalty
.

In response to the statement and defense opinions of Jin Zhengda, Wan Lianbu, Tang Yong, Cui Bin, Gao Yiwu, Yan Mingxiao, Zheng Shulin, and Xu Hengjun, after review, I will think: First, on the application of the old and new "Securities Law"
.
In this case, it was determined that Kingenta's information disclosure violations continued from 2016 to 2020, and that the current "Securities Law" was implemented after the end of the behavior.
It is not inappropriate to apply the current "Securities Law"
.

Second, about the circumstances of lighter or reduced punishment
.
First, regarding the fictitious illegal acts related to trade business, Kingenta advocates that the relevant illegal acts should be stopped from the second half of 2018 and corrected by backflushing.
Its active correction is not related to the facts of the case, but it is worthy of recognition; Illegal acts of bills, inflated inventories, profits, and liabilities
.
Kingenta claims to be corrected or reversed in the follow-up report, but until the administrative penalty was issued, Kingenta did not provide corresponding evidence to correct, retrospectively adjust and disclose the periodic report with false records in this case
.
Thirdly, regarding the failure to disclose related illegal acts related to related parties and related transactions as required, Kingenta and relevant responsible personnel have rectified the "inaccurate disclosure of related fund transactions with NoviFon" in the "Advance Notice", and adopted After understanding a series of measures to solve the difficulties, I will adopt the defense opinions of this part of the statement
.

The third is about delayed punishment
.
The reasons for the extension of the punishment proposed by the parties are not directly related to this case, and there is no basis for the extension in law
.

Fourth, Tang Yong participated in the negotiation and was responsible for the specific organization and implementation of Jinenta’s fictitious trade business, the transfer of non-operating funds to Nobeifeng, and the inflated issuance of goods during the period involved.
The facts are clear and the evidence is sufficient
.
Tang Yong played an objective role in organizing and coordinating financial fraud, and had a direct causal relationship with Kingenta's related information disclosure violations
.
According to the provisions of Article 17 of the "Rules for the Determination of Administrative Responsibilities for Information Disclosure Illegal Acts" (Announcement of the China Securities Regulatory Commission [2011] No.
11), it is not inappropriate for the CSRC to identify Tang Yong as the person in charge who is directly responsible
.

To sum up, I will partially adopt the defense opinions of Kingenta and the above-mentioned responsible persons, and adjust the market prohibition measures of some responsible persons according to law
.
At the same time, the adoption of the defense opinion will not affect the amount of fines imposed on Kimenta and the above-mentioned responsible persons
.

In response to Li Jiguo's statement and defense opinions, after review, I will think: First, about the factual determination of this case
.
During the period involved in the case, Li Jiguo participated in the decision-making of fictitious trade business, the transfer of non-operating funds to Nobel, the false increase in the issuance of commodities, and the false reduction of bills payable
.
It is determined that the facts of Li Jiguo's organization and participation in the illegal acts involved in the case are clear and the evidence is sufficient, and that his acts belong to the more serious circumstances stipulated in the "Regulations on the Prohibition of Access to the Securities Market"
.

Second, about the amount of punishment against Li Jiguo
.
First, the existing evidence could not prove that Li Jiguo took the initiative to explain the illegal facts that were not discovered by our association, and the cooperation in the investigation had been considered in advance notification
.
Second, during the period involved in the case, Li Jiguo, as the person in charge of finance, should bear the main responsibility for the authenticity, accuracy and completeness of Kingenta's financial data
.
I will fully consider Li Jiguo's role in the process of illegal behavior, the degree of knowledge, duty and performance of his duties when measuring the punishment
.
Third, Li Jiguo's current position has nothing to do with this case
.

Third, accept Li Jiguo's other defense opinions
.

To sum up, I will partially adopt Li Jiguo's defense opinion and reflect it in the decision of the market ban in this case
.

Based on the facts, nature, circumstances and social harm of the parties' illegal acts, and in light of the special circumstances under which the illegal acts are applicable to the old and new Securities Law, and in accordance with the provisions of Paragraph 2 of Article 197 of the Securities Law, the China Securities Regulatory Commission will Decide:

1.
Kingenta Ecological Engineering Group Co.
, Ltd.
was ordered to make corrections, given a warning, and imposed a fine of 1.
5 million yuan;

2.
A warning was given to Wan Lianbu and a fine of 2.
4 million yuan was imposed, including a fine of 1.
2 million yuan for the person in charge who was directly responsible, and a fine of 1.
2 million yuan for the actual controller;

3.
Give a warning to Li Jiguo and impose a fine of 600,000 yuan;

4.
Give a warning to Tang Yong and impose a fine of 550,000 yuan;

5.
Give warnings to Cui Bin, Gao Yiwu, Yan Mingxiao, Zheng Shulin, and Xu Hengjun, and impose a fine of 500,000 yuan respectively
.

The above parties shall, within 15 days from the date of receipt of this penalty decision, remit the fine to the account bank of China Securities Regulatory Commission: China CITIC Bank Beijing Branch Business Department, account number: 7111010189800000162, and the bank will directly turn it over to the state treasury, and note that A copy of the payment voucher with the name of the party concerned shall be submitted to the Office of the Administrative Punishment Committee of the China Securities Regulatory Commission for the record
.
If the party concerned is not satisfied with this penalty decision, he or she may apply to the China Securities Regulatory Commission for administrative reconsideration within 60 days from the date of receipt of this penalty decision, or directly to the competent authority within 6 months from the date of receipt of this penalty decision.
The people's court with the right to file an administrative lawsuit
.
During the period of reconsideration and litigation, the above decision will not be suspended
.