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The risk of *ST Huatie (000976) having difficulty in releasing its 2023 annual report has increased.

The company disclosed on the evening of August 16 that it had recently received a "Notice Letter" from Beijing Yanhuang Certified Public Accountants (General Partnership) (hereinafter referred to as "Yanhuang"), the annual audit agency for 2023. Due to concerns about not receiving audit fees, Yanhuang intends to terminate its cooperation with *ST Huatie.

Securities Times e-company reporter noted that Yanhuang's total revenue in 2023 was only 216,600 yuan, and *ST Huatie offered it a remuneration of 2.1 million yuan. On platforms such as Douyin, Yanhuang is selling books.

Even so, Yanhuang's attitude to terminate cooperation remains relatively firm.

In the "Notice Letter", Yanhuang stated that some audit fees of *ST Huatie were not paid on time. It learned that multiple bank accounts of the listed company and its subsidiaries were frozen, which would most likely lead to its inability to collect the contract price, thereby affecting the realization of its contract purpose. Therefore, it urged the listed company to fulfill its payment obligations on time. If the purpose of the contract cannot be achieved, Yanhuang may take necessary stop-loss measures such as withdrawing project team auditors to other projects and terminating the contract.

*ST Huatie said that the company, the board of directors and the management attached great importance to the "Notice Letter" and had many in-depth communications with Yanhuang Law Firm and actively sought solutions. The company promised and raised funds in accordance with the "Business Agreement" to pay for the second phase of the audit fees in order to resume and complete the audit work within the specified time. However, Yanhuang Law Firm still notified the company that after issuing the "Notice Letter", it would be handled in accordance with the termination agreement, and it was no longer possible to restart the project in a short period of time and complete the audit work within the specified time.

*ST Huatie has hired Dahua Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Dahua") to audit its annual reports since the 2015 annual report. Dahua issued a qualified audit report and a negative internal control audit report on the company's 2022 financial report. In October last year, the company announced that it would re-employ Dahua as its 2023 audit agency.

However, *ST Huatie's 2023 annual report encountered difficulties. On April 30, the company said that due to the approaching statutory disclosure date, some of the information involved in the aforementioned report could not be verified and clarified for the time being, and the company expected that it would not be able to disclose the 2023 annual report and the first quarter report of 2024 within the statutory period. "In order to ensure the authenticity, accuracy and completeness of the disclosure of periodic reports, the company still needs to further verify the relevant situation and publicly disclose (the above report) after the relevant matters have been verified and clarified."

To this day, *ST Huatie's annual report is still difficult to produce. The company has also become one of the only two A-share companies that have not disclosed their 2023 annual reports, the other being *ST Weichuang (002308).

During this period, the news that Dahua was fined was exposed in mid-May. Subsequently, many listed companies announced the cancellation of cooperation with Dahua, including *ST Huatie. In mid-June, *ST Huatie announced that it would change the annual review agency for 2023 to Yanhuang.

Compared with Dahua, Yanhuang is a little less well-known. The announcement shows that Yanhuang was established on October 20, 2015. As of April 2024, Yanhuang has 2 partners, 7 certified public accountants, and 0 certified public accountants who have signed audit reports for securities services. As of the end of 2022, the occupational risk fund of Yanhuang was 12,200 yuan, and the cumulative compensation limit of the occupational insurance purchased was 1 million yuan.

Cao Fengliang, the executive partner of Yanhuang Law Firm, is also one of the signing certified public accountants for this project. He became a certified public accountant in September 2003, registered for practice in June 2006, and started to engage in the audit of listed companies in 2022. However, he has signed or reviewed the audit reports of 0 listed companies in the past three years. Another signing certified public accountant, Xie Jian, and the project quality control reviewer, Wang Huanqing, have also signed or reviewed the audit reports of 0 listed companies in the past three years.

The reporter noticed that Cao Fengliang registered his own video account and opened a window to sell goods, and the product was a book about ChatGPT. On Douyin, an account named "Yanhuang Accounting Firm" also sold books related to economics, stocks, management wisdom, etc. This account is not certified, but many of its video contents are related to Cao Fengliang.

*ST Huatie paid Yanhuang a total of 2.1 million yuan in remuneration, including 1.6 million yuan in audit fees and 500,000 yuan in internal control audit fees. In 2023, Yanhuang's total audited revenue was 216,600 yuan, of which securities business revenue was 148,500 yuan. In the previous year, it had 0 listed company audit clients.

For Yanhuang Law Firm, this order from *ST Huatie is attractive enough. But if the payment cannot be received, no matter how big the order is, it is meaningless. In late July, *ST Huatie disclosed that the company's main bank accounts were frozen, involving a total amount of 15.5483 million yuan. This resulted in the company being unable to collect payment for goods in a timely manner through its bank account, which had a significant impact on the company's capital operation, business management, etc. At the same time, the company said that it could not rule out the possibility of subsequent or other bank accounts being frozen. In mid-August, the company also stated that the balance of guarantees corresponding to its overdue debts was 618.35 million yuan.

*ST Huatie's delisting is a foregone conclusion. From April 22 to July 25, the company's stock price was below 1 yuan for 20 consecutive trading days, triggering the par value delisting regulations. In late July, the Shenzhen Stock Exchange issued a "Preliminary Notice of Termination of Listing" to the company, announcing its intention to terminate the company's stock listing.

On the morning of August 17, the reporter sent a private message to Cao Fengliang’s video account about the interview outline, but no response was received as of press time.

Editor: Peng Bo

Proofreading: Yao Yuan

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