(Yicai Global) July 14 -- Three years after authorities in Malaysia tipped off their Chinese counterparts about a financial fraud at the China unit of listed Malaysian company Lambo Group, China’s finance ministry imposed the first cross-border administrative penalty on the firm’s auditor yesterday.

Zhongxingcai Guanghua Certified Public Accountants was fined CNY300,000 (USD44,600), and the certified public accountant who signed off on the financial reports of Lambo’s wholly owned Chinese subsidiary had his license revoked. The controller and financial officer of Lambo’s Fujian-province based unit are being investigated on suspicion of forging the company’s seal.

In August 2019, the Securities Commission Malaysia handed to Chinese authorities clues about alleged illegal behavior at Fujian Accsoft Technology Development and the accounting firm.

Accsoft’s revenues from 2016 to 2018 were stated as CNY27 million (USD4 million), CNY133.4 million (USD19.8 million), and CNY151.74 million, with net profits of CNY19.1 million, CNY30.4 million and CNY30.9 million, respectively. Bank deposits as of the end of 2018 were CNY13 million, with CNY50 million worth of financial products.

But after an investigation, China’s finance ministry found that Accsoft was losing money from 2016 to 2018 and never had more than five employees nor had annual revenues of more than CNY60,000. The loss was CNY30,100 in 2016, CNY46,000 in 2017, and CNY86,200 in 2018. Actual bank deposits at the end of 2018 were no more than CNY50,000, and the firm did not own any financial products.

The 2016 and 2017 annual reports submitted by Accsoft to the Malaysian accountants responsible for Lambo’s audit, as well as the 2018 annual bank inquiry letter, bank statements, and purchase and sales contracts provided to Zhongxingcai Guanghua's Shandong branch, were all forged.

Founded in 2015 with a registered capital of about USD10 million, Accsoft was dissolved in May, according to information on Chinese corporate information platform Tianyancha.

Editor: Futura Costaglione