news

our reporter yan shilong reports from beijing

recently, according to the linyi municipal commission for discipline inspection and supervision, li dongchun, former party secretary and chairman of linyi urban development group co., ltd. (hereinafter referred to as "linyi urban development"), was expelled from the party and removed from public office for serious violations of discipline and law.

as early as march 20 this year, the linyi municipal commission for discipline inspection and supervision announced that li dongchun was suspected of serious violations of discipline and law and was currently under investigation. the next day, linyi chengfa investment development (marketing) director fan feifei was also suspected of serious violations of discipline and law and was under disciplinary review and supervision by the yinan county commission for discipline inspection and supervision. at present, the linyi chengfa official website can no longer display any relevant information about li dongchun.

china business news reporters noted that immediately after the news of li dongchun and fan feifei being taken away, linyi chengfa held a meeting on april 1, 11 days later, to study the "correction of accounting errors", including the adjustment of multiple accounting items. among them, the original book value of the exclusive right to use the water resources of the an di reservoir alone, the intangible assets were reduced by about 4.026 billion yuan...

the interim financial report recently released by linyi chengfa showed that its total revenue in the first half of the year was approximately 4.479 billion yuan, a year-on-year increase of 34.26%; its net profit was -102 million yuan, a year-on-year decrease of 12.38%; and its net profit attributable to shareholders was -0.71 billion yuan, a decrease of 19.44%.

as a city shouldering the responsibility of transforming the old and new growth drivers in linyi, a major city in southwestern shandong, and an outstanding domestic integrated urban operation service provider, linyi urban development may be facing a big test.

municipal party committee inspection, high-level officials were investigated one after another

recently, with the approval of the linyi municipal party committee, the linyi municipal commission for discipline inspection and supervision conducted an investigation into the serious violations of discipline and law by li dongchun, the former party secretary and chairman of linyi chengfa. upon investigation, it was found that li dongchun had lost his ideals and beliefs, betrayed his original mission, was disloyal and dishonest to the party, and resisted organizational review; he ignored the spirit of the central committee's eight regulations and illegally accepted gifts, gifts, and consumption cards; he violated organizational principles and concealed and failed to report personal matters; he lost his integrity and illegally obtained large returns through private lending, illegally engaged in business and set up enterprises, and illegally arranged for others to bear the unit's expenses; he illegally intervened and intervened in market economic activities and did not perform his work duties correctly. his private desires expanded, "eating the company", and he used the convenience of his position or the convenience formed by his power and status to seek benefits for others in engineering contracting and project cooperation, and illegally accepted huge amounts of property. li dongchun seriously violated the party's political discipline, organizational discipline, integrity discipline, and work discipline, constituted serious violations of duty and was suspected of bribery, and did not restrain or stop after the 18th national congress of the communist party of china. the nature is serious and the impact is bad, and he should be dealt with seriously.

in accordance with relevant regulations, after research and approval by the linyi municipal commission for discipline inspection standing committee and reported to the linyi municipal party committee, it was decided to expel li dongchun from the party; the linyi municipal supervision commission will expel him from public office; confiscate his illegal gains; and transfer his suspected criminal case to the procuratorate for review and prosecution in accordance with the law, and the relevant property will be transferred together.

on march 20 this year, the linyi municipal commission for discipline inspection and supervision announced that li dongchun was suspected of serious violations of discipline and law and was under investigation. the next day, fan feifei was designated by the linyi municipal commission for discipline inspection and supervision to be under disciplinary review and supervision investigation by the yinan county commission for discipline inspection and supervision.

according to the reporter, li dongchun was investigated six months after he resigned as chairman. in october 2023, linyi chengfa issued an "announcement on the change of chairman and legal representative" showing that the former chairman and legal representative of the company, li dongchun, had reached retirement age. after being appointed and removed by the linyi municipal committee of the communist party of china, li dongchun no longer served as the chairman of the company, and li wei was appointed as the chairman of the company. according to the articles of association of linyi chengfa, the chairman is the legal representative of the company.

born in july 1964, li dongchun was a teacher at the training class of linyi (region) finance and taxation bureau, a cadre of linyi finance bureau and linyi economic development and investment company, and has worked in linyi chengfa since 2015. for a long time, li dongchun has been both chairman and general manager.

in september 2023, the first inspection team of the linyi municipal party committee reported the inspection situation to the linyi chengfa party committee. chen xiaodong, the leader of the first inspection team of the municipal party committee, pointed out that the problems existing in linyi chengfa are: there is a gap in the implementation of the decision-making arrangements of the party central committee and the work requirements of the provincial and municipal party committees, the standards for promoting the reform of state-owned enterprises are not high, the ability to modernize management needs to be improved, there is a gap in promoting the strengthening, optimization and expansion of state-owned enterprises, and the ability to prevent and resolve major risks is not strong; the implementation of the deployment requirements of comprehensive and strict party governance is not strong enough, and the problem of violating the spirit of the central eight regulations still exists, the financial internal control mechanism is weak, and the bidding procedures are not standardized; the leadership team itself is not strong enough, the leading role of party building is not fully played, and the construction of the cadre team has shortcomings; the rectification of the problems reported by the inspection is not thorough. at the same time, the inspection team also received clues reflecting the problems of some leading cadres, which have been transferred to relevant parties for handling in accordance with relevant regulations.

li dongchun said at that time that linyi chengfa will regard the rectification of problems reported by the inspection as an important political task at present, conduct in-depth analysis of the causes of the problems reported by the inspection, and resolutely make corrections as soon as they are known and carry out comprehensive rectification.

adjustment of accounting errors and write-downs of more than 4 billion yuan

in april 2023, the ministry of finance issued the "administrative penalty decision" (finance supervision law (2023) no. 89) to linyi chengfa, which showed that linyi chengfa provided financial accounting reports with inconsistent preparation basis to different users of accounting information in 2020 and 2021, and the amounts of assets, liabilities, owners' equity, etc. contained in the two financial accounting reports of the same year were significantly different. this behavior violated article 13 and article 20 of the "accounting law" and decided to impose an administrative penalty of 50,000 yuan. on july 20, 2023, moody's service issued a rating report, saying that the rating outlook of linyi chengfa was adjusted from stable to negative.

the 2023 annual report shows that it was on april 1, 2024, the 11th day after li dongchun was taken away by the commission for discipline inspection, that the company's ninth meeting of the board of directors reviewed and approved 20 "corrections of accounting errors" in one fell swoop. among them, in terms of the original book value of the exclusive right to use the water resources of the an di reservoir, intangible assets were reduced by 4.026 billion yuan; linyi chengfa steel-based new materials technology co., ltd. made a goodwill impairment provision of 179 million yuan; feixian dreamer film and television base co., ltd. made a long-term equity investment impairment of 38 million yuan...

on the same day, linyi chengfa reported the progress of the above inspection and rectification, stating that "we will continue to promote from a high level and make great efforts to implement responsibilities; we will continue to be problem-oriented and make great efforts to examine and rectify; we will continue to transform achievements and make great efforts to improve the effectiveness of rectification". the reporter noticed that linyi chengfa responded to all 24 issues reported by the inspection team, and in terms of "lax implementation of financial system", linyi chengfa showed "completed".

the relevant rectifications include: first, a promotion meeting of the financial sharing center was held, with plans to realize centralized fund management and establish a group "fund pool". second, for the relevant assets that were not correctly included in the fixed asset account, financial forces were organized to make appropriate corrections to accounting errors, make additional depreciation, and properly handle income tax matters. third, a sound trade union financial system was established. fourth, the training and assessment of accounting personnel were strengthened. fifth, relevant personnel were ordered to attach payment vouchers and explanations of the situation. at the same time, the bookkeepers reviewed themselves at the trade union committee meeting, and the leaders in charge criticized and educated them, and their bookkeeper qualifications were revoked.

the reporter saw in the semi-annual report recently released by linyi chengfa that the company's restricted assets table seemed to have obvious compilation errors. the unit of the table was "100 million yuan", so the company's total restricted assets as of the end of june this year were as high as "64.25 trillion yuan".

the reporter learned that on august 2 this year, linyi chengfa issued the "announcement on the completion of the rectification of the penalties of the ministry of finance in 2023", which showed that it quickly established a rectification leading group and a special working group for resolving major financial issues, with the general manager of the group as the team leader and the chief supervisor as the deputy team leader, and expressed the need to tighten responsibilities and promote rectification in a strict and practical manner. comprehensively build a group financial sharing center, realize centralized accounting and management of financial business and funds, build a group capital reservoir, strengthen the group's financial management and supervision and inspection from the source, and promptly discover and resolve existing potential problems.

the linyi municipal finance bureau also issued a "letter on the report on the rectification of matters involving the administrative penalty of the ministry of finance" on july 15 this year, pointing out that linyi chengfa attached great importance to the rectification work, studied the rectification measures one by one, and made every effort to implement them. the rectification was completed and the results were obvious.

incurring losses

wind data shows that in the first half of this year, linyi chengfa ushered in its first high revenue growth for seven consecutive quarters since 2022, but it is still facing a loss in net profit attributable to shareholders for five consecutive quarters.

relevant data show that in the first half of this year, linyi chengfa's operating income was 4.479 billion yuan, a year-on-year increase of 34.26%; net profit was -102 million yuan, a year-on-year decrease of 12.38%, while the comparable median of the province during the same period was 48 million yuan; net profit attributable to shareholders was -71 million yuan, a year-on-year decrease of 19.44%; total assets were 72.086 billion yuan, a year-on-year increase of 8.14%; shareholders' equity was 25.132 billion yuan; gross profit margin was 13.98%, and net profit margin was -2.27%.

as for the reasons for the company's losses, linyi chengfa believes that it is because the business is mainly settled in the second half of the year, and the amount of government subsidies received by the company in the first half of 2024 is temporarily small, resulting in the company's temporary losses. with the settlement of business and the payment of subsidy income in the second half of 2024, the company's net profit is expected to turn positive.

however, the reporter also noted that the reason why linyi chengfa suffered heavy losses was closely related to its high costs. in the first half of the year, its total operating costs reached 4.631 billion yuan, including 3.853 billion yuan in operating costs, 188 million yuan in taxes and surcharges, 85 million yuan in sales expenses, 211 million yuan in management expenses, 8.1721 million yuan in research and development expenses, and 286 million yuan in financial expenses.

in terms of debt, in the first half of the year, linyi chengfa's short-term loans amounted to 3.189 billion yuan, accounts payable and bills totaled 3.864 billion yuan, and current liabilities totaled 24.429 billion yuan. the current ratio was 1.26, while the provincial comparable median was 2.02; the quick ratio was 0.50, while the provincial comparable median was 1.06; the cash ratio was 0.15; the debt-to-asset ratio was 65.14%, while the provincial comparable enterprise median was 58.43%; and its debt-to-asset ratio after excluding advance payments was 59.72%.

in terms of cash flow, linyi chengfa's operating cash inflow in the first half of the year was 9.977 billion yuan, of which cash inflow from sales of goods was 9.233 billion yuan, and other cash inflows were 735 million yuan; operating cash outflow was 9.821 billion yuan, of which cash paid for purchases of goods was 8.437 billion yuan, and other cash payments were 686 million yuan; net operating cash flow was 156 million yuan.

in terms of financing cash flow, in the first half of the year, financing inflows were 4.174 billion yuan, of which borrowing inflows were 4.153 billion yuan; financing outflows were 4.145 billion yuan, of which 2.403 billion yuan was paid in cash to repay debts, 815 million yuan was paid in cash for dividends, profits or interest payments, and 927 million yuan was paid for other financing-related cash; the net cash flow from financing activities was 28 million yuan.

the relevant person in charge of the linyi urban development office said in an interview with reporters that the current national economic situation is declining and the group is also in a transformation stage, so there have been some changes in the company's performance. judging from the group's operating conditions in the first half of the year, it has maintained a stable and orderly development overall. from a business perspective, the current real estate market is very sluggish, and market expectations have not improved. at the same time, home buyers are very cautious, so the group's real estate sales sector is not as expected, resulting in some changes in revenue. "the entire city of linyi is also transforming and is increasing the layout of emerging industries, but linyi's housing prices are now falling sharply, and some real estate projects are indeed in a difficult situation. we are still working to ensure the delivery of buildings and stabilize people's livelihood. some real estate projects need to be delivered smoothly in order to enhance market confidence. we cannot be irresponsible."

as for the "64.25 trillion yuan" of restricted assets, the staff member said that further implementation will be carried out, but as of press time, no further feedback has been received from the person in charge. the person in charge of orient securities co., ltd., the underwriter of the relevant bonds of linyi chengfa, told reporters that the "64.25 trillion yuan" was caused by the operating system error of the company staff and had nothing to do with linyi chengfa.

(editor: lu zhikun, reviewer: tong haihua, proofreader: yan yuxia)