Core Insights - The founder of Hong Jiu Fruits, Deng Hongjiu, has been detained for accounting fraud, leading to the company's stock becoming worthless and its delisting from the Hong Kong Stock Exchange [1][4][5] Company Overview - Hong Jiu Fruits was founded in 2002 by Deng Hongjiu and his wife Jiang Zongying, initially starting from a small fruit stall and later becoming the largest durian distributor in China by 2021 [1][4] - The company expanded its product range to include high-end fruits such as dragon fruit, mangosteen, longan, grapes, and cherries [1][4] Financial Decline - The company faced severe financial issues, including negative cash flow since 2019, with a reported revenue of 8.5 billion yuan (approximately 1.2 billion USD) and a profit of 802 million yuan (approximately 113 million USD) in the first half of 2023 [5][18] - The company was forced to suspend trading in March 2024 due to significant doubts raised by its auditor, KPMG, regarding its financial statements [5][18] Fraud Allegations - Allegations of fraudulent activities included "circular funding" operations, where the company allegedly made large payments to fictitious suppliers, inflating revenue and accounts receivable [5][18][19] - Following the fraud allegations, several executives, including Deng Hongjiu and Jiang Zongying, were arrested for loan fraud [8][19][20] Market Conditions - The durian price collapse during 2023-2024 significantly impacted the company's operations, exacerbating its financial troubles [6][19] - The broader fruit industry is facing challenges, including a 21.8% revenue decline for competitors like Baiguoyuan, reflecting increased operational pressures [20] Governance Issues - The company's governance structure was weak, operating as a family business with over 46% of shares held by family members, which contributed to its operational vulnerabilities [22] - The company has applied for a major restructuring, which may involve asset sales, including 16 fruit processing plants and cold chain logistics infrastructure [20][22]
榴莲之王坠落 洪九果品黯然退市