More Fu Ji fraud

The likely scenario being management set up parallel operations and diverting business to them. Disclosure was non-existent. With the number of staff exiting (78%) it must have degenerated into a open joke on the bond and stock holders.

The lesson to be learned here is to shoot first and ask questions later when it comes to mainland China companies. Red flag here was the accounts were not released because CFO was too 'ill'.

A Director (Carlye Tsui) left because she said she couldn't get enough information, but this was at a much much later stage.

What is the heroic SFC doing? .. Sh*t F*ckall Competence

The Fu Ji auditors: CCIF CPA

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In that statement, Fu Ji said its business was stable and it was confident of increasing its share of the mainland catering market, which it said was growing fast. It called its financial position "solid" and stated profit attributable to shareholders of 250.23 million yuan (HK$284.57 million) for the six-month period.

In the past 12 months, according to a report prepared for Fu Ji's bondholders by accounting firm KPMG and reviewed by this newspaper, the beleaguered caterer has lost its contract to serve food to Intel, its largest corporate client, as well as contracts with Wal-Mart and Taiwanese computer manufacturer Asus. Fu Ji has just 3,000 staff, down from 13,823 in September last year, the report adds.

Fu Ji has also been losing senior staff. The caterer's heads of sales, legal services, human resources, investment and convenience foods resigned in the past year, the report says. Of 15 sales managers who worked for the company a year ago, 14 were gone, KPMG said, while 12 of 19 finance staff also left. The report says mainland courts hearing unspecified cases against Fu Ji have frozen some of the caterer's assets, meaning it cannot sell them.

The report left bondholders fuming. "There is a huge issue here with disclosure. We had no idea any of these problems were happening," one complained.

The SFC declined to comment.

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