Fushun Special Steel, a subsidiary of metals giant Dongbei, has admitted to huge “accounting errors” for the last three years’ financial records, reports Caixin, overstating net assets by RMB 1.77 billion ($269.4 million).
The company said in a statement that “major defects in internal control systems” had been behind the inaccuracies. It also issued a warning to investors that it could be taken down from the Shanghai stock exchange, having already had its shares suspended five months ago for fabricating inventory data.
Dongbei, itself on the verge of bankruptcy last year, will provide Fushun with a cash injection but details of the bailout were not specified.