Core Viewpoint - The company Fuhong Hanlin faced criticism from the Hong Kong Stock Exchange due to internal control failures and misappropriation of IPO funds, leading to a significant drop in stock price, followed by a partial recovery the next day [1][2]. Group 1: Company Actions and Consequences - On September 2, the company disclosed that it was reprimanded by the Stock Exchange, and its former CEO Liu Shigao was criticized and required to complete training on regulatory and legal issues before being eligible for future directorships [1][4]. - The investment management agreement signed by the company with Shangcheng Global, which involved the misallocation of IPO funds, was not in line with the intended use disclosed during the IPO process [3][7]. - The company approved management fees totaling $3.5 million over two years based on the investment management agreement, which was deemed inappropriate as it did not undergo proper board review [4][5]. Group 2: Financial Implications - As of the end of 2024, the company had an outstanding receivable of $66.36 million (approximately 477 million RMB) from Shangcheng Global, which has been fully impaired [5][6]. - The company reported that it had recovered $30.64 million from Shangcheng Global by the end of 2022 and an additional $20 million in the 2023 fiscal year [5]. Group 3: Governance and Management Changes - The company has experienced significant management turnover since 2019, with three CEOs and four CFOs, indicating instability within its leadership [8]. - Liu Shigao and Zhang Zidong, both involved in the investment management agreement, have since left the company, with Liu resigning in September 2020 and Zhang in December 2020 [8].