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ShiFang Holding Limited ( (HK:1831) ) has provided an announcement.
ShiFang Holding Limited has issued a clarification stating that earlier announcements about Baiming and Zhuoshi meeting profit guarantees were based on audit reports from Zhongjian Certified Public Accountants, which have now been deemed seriously misleading. A subsequent on-site re-audit by PricewaterhouseCoopers found that Baiming and Zhuoshi used revenue from newer sales contracts to subsidize older ones, effectively reclassifying those subsidies as marketing expenses and rendering the relevant contracts loss-making rather than profitable.
As a result of these findings, the company now considers that Baiming and Zhuoshi did not, in fact, achieve any of the agreed profit targets, and that the shares previously issued to their designated recipients represent actual losses to ShiFang. The board states that these shares must be recovered or otherwise re-placed to offset the company’s losses, signaling a potential unwind or restructuring of consideration linked to the acquisition and raising implications for shareholders and counterparties involved in the deal.
More about ShiFang Holding Limited
ShiFang Holding Limited, incorporated in the Cayman Islands and re-domiciled in Bermuda, is listed on the Hong Kong Stock Exchange under stock code 1831. The company has pursued growth through acquisitions, including interests in entities such as Baiming and Zhuoshi, which were subject to profit guarantee arrangements tied to their post-acquisition performance.
Average Trading Volume: 7,476,680
Technical Sentiment Signal: Buy
Current Market Cap: HK$279.6M
See more insights into 1831 stock on TipRanks’ Stock Analysis page.