Finally, Chinese company Jiangsu Yabaite Technology Co Ltd’s fraud has a drop scene; China blacklists company defaming Shehbaz Sharif

 
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Shehbaz Sharif not only strongly rebutted the media reports but also sent legal notices to the media organisations involved in alleged misreporting.

CSRC found Yabaite’s claim false; deals with Pakistan w.r.t. Multan Metro non-existent

BEIJING Dec 21 (TNS): Finally, the fraud of Chinese company Jiangsu Yabaite Technology Co Ltd had a drop scene as the China Securities Regulatory Commission (CSRC) blacklisted it forever and awarded the maximum penalties to the company and its owner.

On December 17 2017, the owner of the Chinese company Yabaite published an apology on its official website and confessed that he had defrauded the public and accepted the CSRC decision of penalty and lifetime ban on his entry in the security market.

When contacted, Deputy Chief of Mission Chinese Embassy Lijian Zhau verified that the CSRC had announced its decision and the public apology of the owner of Yabaite was authentic. He said he had already clarified that the said Chinese company was involved in some fraudulent activities and the foreign office of China had also already clarified the matter.

The Chinese company’s fraud was highlighted when the Pakistani media reported that Punjab Chief Minister Shehbaz Sharif was allegedly involved in money laundering and sent a huge amount of kickback money to China through Yabaite. However, the Shehbaz Sharif not only strongly rebutted the media reports but also sent legal notices to the media organisations which were involved in alleged misreporting. The case of alleged money laundering was then referred to FIA.

The CSRC on December 15, 2017 issued a statement which said it had imposed a fine of 600,000 Yuan to Yabaite and Lu Yong, the owner of Yabaite had also been fined 300,000 Yuan. The Chinese regulatory body had barred him from the securities market for life. Similarly other employees involved in the case received administrative penalties or were banned from the market.

According to China Central Television (CCTV) and other Chinese media reports, “An investigation showed that from 2015 to September 2016, Yabaite inflated its revenue and profit by 58 million Yuan and 26 million Yuan respectively by announcing non-existent transaction such as Multan Metro Bus project and other deals”.

According to these reports, the inflated profits accounted for 73 per cent and 20 per cent in 2015 and 2016 respectively. The company claimed that Multan Metro Bus project was undertaken by it with the cooperation of the local government. It also claimed that the company received $35 million. To cover up the fraud, Yabaite exported construction materials during the period the project was supposedly in progress, claiming that those materials were used for the Multan Metro Bus project. However, the CSRC investigation found that the material was then imported back to China through a third party company and Yabaite employees had not even visited the site themselves.

“The money was mostly remitted through Yabaite-controlled companies or other domestic enterprises rather than what the company claimed had been payments from Pakistan. All the company’s bank transactions were completed in a 20 square-meter apartment in Shanghai. Yabaite transferred funds through more than 100 bank accounts and 50 companies in seven countries and regions which complicated the investigation process”, reported CCTV while quoting a CSRC employee.

According to the CSRC statement, originally in Chinese which was translated through google translation “China Securities Regulatory Commission (CSRC) investigated the illegal conduct of Jiangsu Yabaite Science and Technology Co Ltd which lied about its business income by fabricating project overseas and making up domestic and foreign trade in construction materials to fake financial statement. CRSC found out that Yabaite falsely reported its newly-added business revenues of 580 million RMB and profits of roughly 260 million RMB by making up its Multan Metro Bus project in Punjab, Pakistan, and its international and domestic trade from 2015 to September 2016. CSRC decided to impose a fine of 600,000 RMB on Yabaite and 300,000 RMB on Lu Yong, the person directly in charge of the company, which are the highest amounts stipulated by the Securities Law, and ban the company from entry into securities market”.

Similarly, the Yabaite’s owner Lu Yong published an apology on his official website and said, “On December 15, 2017, Jiangsu Yabaite Science and Technology Co Ltd concerned managers of the company and I received the decision of Administrative Penalty made by CSRC. I accept the decision made by CSRC about the company and myself, and apologise to all the shareholders and staff of the company. I recognise my misconducts and firmly support supervision authorities to strictly regulate public companies and market order, so as to create a sound legal environment for the positive development of the capital market”.

Earlier, when the Chinese company’s fraud was reported by the local media, the matter was probed and it solved the puzzle of this entire saga. The Chinese company had never been involved in any project in Pakistan. However with the help of some cronies in Pakistan, the Chinese company’s owner managed some fake and forged documents to prove its claim of working in Pakistan. The partner of the Chinese company in Pakistan i.e. Capital Engineering and Construction Company never existed though Lu Yong and his Pakistani acquaintances tried to get it registered with SECP but failed due to non-availability of the name.

It is pertinent to mention here that the two partners who allegedly helped Lu Yong to manage fake and forged documents were arrested.

China Securities Regulatory Commission (CSRC) investigated the illegal conduct of Jiangsu YABAITE Science and Technology Co., Ltd., which lied about its business income by fabricating project overseas and making up domestic and foreign trade in construction materials to fake financial statement.

CRSC found out that YABAITE falsely reported its newly-added business revenues of 580 million RMB and profits of roughly 260 million RMB by making up its Multan Metro Bus project in Punjab, Pakistan, and its international and domestic trade from 2015 to September 2016.

CSRC decides to impose a fine of 600,000 RMB on YABAITE and 300,000 RMB on Lu Yong, the person directly in charge of the company, which are the highest amounts stipulated by the Securities Law, and ban the company from entry into securities market.

Full report could be read at the official platform of CSRC; http://www.csrc.gov.cn/pub/newsite/zjhxwfb/xwdd/201712/t20171215_328942.html

Securities Regulatory Commission (CSRC) would hand out an official punishment to a Chinese company that falsely claimed that it was involved in the metro bus project in Multan and lied about its performance, a spokesperson of Chinese Foreign Ministry said on Monday.

“The CSRC will hand out an official punishment to the company involved and publicize the result of the punishment in accordance with law in days,” Geng Shuang said during regular press briefing while responding to a question about Jiangsu-based Yabaite Technology Co. Ltd, that falsely claimed that it was involved in the metro bus project in the city of Multan and lied about its performance by forging the letters from Punjab Chief Minister Shehbaz Sharif and other politicians.

The spokesperson said, on May 12, CSRC issued a public notice that the Jiangsu Yabaite Technology Co. Ltd inflated its operating incomes and profits by fabricating overseas engineering projects from September 2015 to 2016.

“The CSRC, along with the relevant Pakistani authorities, has probed into the company involved. It did not admit the letters from the prominent Pakistani political figures submitted by this company as evidence and found no evidence of any economic relations or capital flow between this company and other Pakistani company or individual,” he added.

The spokesperson stressed that the Chinese side has always requested the overseas Chinese enterprises to operate in a law-abiding manner and investigate and punish the activities violating law and regulations in accordance with law.

“China stands ready to work with Pakistan to promote the sound development of China-Pakistan economic cooperation,” he added.

Lu Yong¸ President Jiangsu YABAITE Science and Technology Co., Ltd. published a public apology on official website, saying “On 15 December 2017, Jiangsu YABAITE Science and Technology Co., Ltd., concerned managers of the company and I received the Decision of Administrative Penalty made by CSRC. I accept the decision made by CSRC made on the company and myself, and apologize to all shareholders and staff of the company. I recognize my misconducts and firmly support supervision authorities to strictly regulate public companies and market order, so as to create a sound legal environment for the positive development of the capital market.” Read Full Text Here: http://www.yabaite.com/index.php?c=article&id=179