Truth Uncovered: Investigating China Aoyuan Group’s Financial Transactions
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juillet 30, 2024
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The auditors of Aoyuan Healthy Life, a non-wholly owned subsidiary of China Aoyuan Group (“Aoyuan”), uncovered financial transactions totaling approximately RMB7 billion, which involved non-trading fund flows with Aoyuan and third parties. This revelation caused a delay in the release of Aoyuan’s annual results, leading to an immediate trading suspension. The Independent Investigation Committee of China Aoyuan Group appointed FTI Consulting to conduct an independent forensic investigation and internal control review to promptly and systematically uncover the critical facts surrounding the transactions at issue, responding to inquiries from relevant stakeholders, including regulators and external auditors, and resolving the market uncertainties in order to steer the company back on course and resume trading on the Hong Kong Stock Exchange.
Our Impact
- FTI Consulting issued a formal report of the results of our assessment on the company’s internal control system and processes, detailing the forensic findings to clarify the nature and substance of relevant transactions.
- Our experts aided the company and its legal representatives in addressing inquiries from regulators.
- The formal report was successfully submitted to the Independent Board Committee of China Aoyuan Group and was accepted by the Hong Kong Stock Exchange, allowing the resumption of trading.
Our Role:
- FTI Consulting conducted a comprehensive forensic analysis, including the collection and examination of 35 group subsidiaries and 2,500 gigabytes of electronic data, such as records from computer hard drives and company email files.
- Our experts performed targeted business intelligence and investigative research on more than 100 third parties and suspected related parties, including financial counterparties.
- The team interviewed over 40 current or former employees and third parties, carried out fund tracing analysis and provided recommendations to address significant weaknesses and deficiencies identified in the company’s internal control framework.
Related Information
Date
juillet 30, 2024
Contacts
Senior Managing Director