Core Viewpoint - Huaxi Biological is facing serious allegations of financial misconduct, including accusations of financial fraud and inflated revenue figures, which have led to a significant decline in its stock price and raised concerns about its governance and internal conflicts [3][4][29]. Group 1: Allegations and Responses - A former employee, David, has accused Huaxi Biological's controlling shareholder, Huaxi Xinyu Investment Co., of concealing shareholdings and committing fraud related to bond issuance and revenue inflation [3][4]. - Huaxi Biological has publicly responded, stating that David was previously a market director who committed fraud and was reported for embezzlement [3][24]. - The company claims that David's allegations were investigated during its IPO process in 2019 and were found to be unsubstantiated [3][29]. Group 2: Financial Data Discrepancies - Significant discrepancies in financial data have been highlighted, with David pointing out that the revenue for the first half of 2017 was reported at 278 million RMB, which was 91 times the total revenue for the entire year [11][14]. - The company's financial reports show a dramatic increase in operating income and expenses in 2017, followed by a sharp decline in the annual report, raising red flags about the accuracy of the financial statements [12][20]. - David alleges that the inflated figures were linked to profits from the sale of shares in Jinju Holdings, which were then misclassified as operational costs to reduce tax liabilities [14][16]. Group 3: Internal Conflicts and Governance Issues - Huaxi Biological has faced multiple internal disputes, including allegations of stock buybacks at undervalued prices and conflicts among founding members regarding profit-sharing [34][36]. - The company has been criticized for its governance practices, with frequent reports of employee grievances and accusations of workplace bullying [34][36]. - Recent financial performance has shown a decline, with a reported 11.6% drop in revenue and a 70.6% decrease in net profit for 2024, indicating potential underlying issues within the company [34][36].