The most expensive signature in history! Punish over 50 million yuan from Kangmei Pharmaceutical | Yang Wenwei | Signature

Kangmei Pharmaceutical's "massive fraud" case has made new progress.

On June 29, the China Judgment Document Network published a document ruled by the Beijing Higher People's Court, rejecting the reconsideration application of Yang Wenwei, a partner of Zhengzhong the Pearl River, and formally determining the signing accountant of Kangmei Pharmaceutical as the executor.

At that time, the signing accountant Yang Wenwei was ordered by the court to be added as a debtor, bearing unlimited joint and several liability, and will face huge fines and compensation. At that time, his signature on the audit report of Kangmei Pharmaceutical was also jokingly referred to as the "most expensive signature in history" by netizens.

Pictures are subject to 100% joint and several liability in litigation

Previously, Zhengzhong the Pearl River was confiscated business income of 14.25 million yuan and fined 42.75 million yuan, totaling 57 million yuan, due to false records in the audit report issued by Kangmei Pharmaceutical.

Zhengzhong the Pearl River has paid part of the fines and confiscations to the CSRC, but the implementation has not yet been completed.

According to an administrative ruling recently disclosed by the Beijing Financial Court, as of the time when the ruling was made, Zhengzhong the Pearl River had only paid 5.7 million yuan in fines and confiscations. The CSRC requires Zhengzhong the Pearl River to pay the fines and confiscations in time and apply to the court for enforcement. In the process of executing the above-mentioned fine, the Beijing Financial Court found that there was no property available for execution in the middle of the Pearl River, and terminated the execution procedure.

As Yang Wenwei is the certified public accountant who signed the annual financial statement audit report of Kangmei Pharmaceutical from 2016 to 2018, the general partner of Zhengzhong the Pearl River, and the directly responsible person who issued the false financial statement audit report, the CSRC filed an application to the court to add Yang Wenwei as the executor.

The Beijing Financial Court held that Yang Wenwei was in line with the circumstances of the partnership's debts caused by the partners' intentional or gross negligence in their practice activities, and ruled that Yang Wenwei should be added as the defendant of the execution in the Pearl River. Yang Wenwei was unable to accept the above ruling and therefore applied for reconsideration to the Beijing Higher People's Court.

Yang Wenwei believes that if the court adds him as a debtor at the request of the China Securities Regulatory Commission, it is equivalent to requiring him to bear the responsibility of paying the fine together with the partnership enterprise, which is a disguised administrative penalty. In addition, Yang Wenwei has been personally warned and fined. If he is added as a debtor, it may constitute two penalties for one matter, exceeding the necessary limit and violating the principles of fairness and proportionality.

But the second instance of the court ultimately rejected Yang Wenwei's application for reconsideration and upheld the original ruling. This means that Yang Wenwei, the signing accountant of the Kangmei fraud case, will bear unlimited joint and several liability for the losses caused by Zhengzhong the Pearl River, and will bear a debt of up to 50 million yuan.

More huge claims on the road

Zhengzhong the Pearl River Certified Public Accountants and the directly responsible personnel face a huge amount of recovery far beyond this.

On November 12, 2021, the Guangzhou Intermediate People's Court made a first instance judgment on the country's first securities class action case, ordering Kangmei Pharmaceutical Co., Ltd. to compensate securities investors for losses of 2.459 billion yuan due to infringement of false statements such as the annual report. Ma Xingtian, the former chairman and general manager, and five directly responsible persons, Zhengzhong the Pearl River Certified Public Accountants and directly responsible persons bear all joint and several liability, and 13 relevant responsible persons bear part of joint and several liability according to the degree of fault.

The company announced that in the case, Kangmei Pharmaceutical Co., Ltd. compensated 52037 investors, including plaintiffs Gu Huajun and Huang Meixiang, for investment losses of 2.459 billion yuan; Judge Ma Xingtian and six others to assume joint and several liability for repayment; The 13 individuals who were then directors, supervisors, and senior executives of the company shall bear joint and several liability of 20%, 10%, and 5% respectively based on the degree of fault. At the same time, Kangmei Pharmaceutical's auditing agency at that time, Guangdong Zhengzhong the Pearl River Certified Public Accountants and the signing accountant of the annual report audit project, bear joint and several liability for repayment.

This means that Yang Wenwei will also face the pursuit of Kangmei Pharmaceutical compensating investors for huge losses.

The China Securities Regulatory Commission has also issued a warning to Yang Wenwei in 2021, imposed a fine of 100000 yuan, and implemented a five-year ban on entry into the securities market.

During the period of prohibition, Yang Wenwei shall not continue to engage in securities business or serve as a director, supervisor, or senior manager of the original listed company or non listed public company in his original institution, nor shall he engage in securities business or serve as a director, supervisor, or senior manager of any other listed company or non listed public company in any other institution.