Connect with us

Bitcoin News

Chinese Firm Faces Legal Scrutiny From Government Regulator Due to Blockchain Stock Increase

Published

on

A relatively unknown Chinese education and porcelain firm is facing investigation by a Chinese regulator. The investigation was ordered when the firm’s blockchain stock surprisingly became among the most desired on the market last week.

Guangdong Great Wall Group’s stock rapidly climbed for 5 consecutive days, shortly after Xi Jinping lauded blockchain technology and announced his country’s intention to prioritize its adoption. This prompted a rapid rise in the price of the company’s stock.

And this, in turn, was deemed suspicious, with the China Securities Regulatory Commission (CSRC) being ordered to investigate. This investigation is taking place as the Chinese government is making an earnest request for “rational investments” in native fintech and blockchain firms.

The Great Wall Group began operations in 1996 as a porcelain firm, before diversifying into other enterprises, like blockchain. No less than 6 blockchain projects are detailed in its 2018 annual report.

However, investigators are questioning the genuineness of its blockchain push due to the recent rise in the price of its stock. According to files available at the Shenzhen Stock Exchange, investigators are suspicious that the company breached information disclosure laws.

Porcelain Fever!

On October 28, 2019, the Guangdong Great Wall Group received a request from ChiNext that asked for better details on how its varied businesses relate to each other and the blockchain sector. ChiNext functions as a NASDAQ-style board and is a feature of the Shenzhen Stock Exchange. ChiNext asked for better explanations of the purpose and functioning of the 6 research and development projects that the Great Wall Group asserted were connected to the blockchain.

Details asked for included the backgrounds of each of the projects, the amounts invested in each, and the research team members. ChiNext also inquired of the profits realized from the projects, and the influence of these profits on the bottom line of the Great Wall Group for the last year and 3 of the 4 quarters of the current year.

Great Wall, Great Troubles!

In its response, the Great Wall Group has asserted that 2 out of the 6 projects are the responsibility of its subsidiary, Zhiyou Education, which specializes in internet training. This subsidiary is tasked with developing the 2 projects that are assigned to it and intends to at some undetermined future time release a cryptocurrency ecosystem that will employ the OK Angel Coin Software. This software is incidentally yet to undergo development or release.

According to the Great Wall Group, a couple of projects it assigned its subsidiary has had no impact on its revenue streams or profit. As for the 4 remaining projects, these are the responsibility of the Emerald Education Group, which it recently acquired.

The Emerald Group, however, currently appears to be outside the control of its parent company and has possibly gone rogue. This was made known by the Great Wall Group to the Shenzhen Stock Exchange in a filing released in June.

According to the filing, the Emerald Group has ceased to render any financial reports or statements to its parent company. This state of affairs according to the Great Wall Group, makes it unable to explain how its subsidiary is related to blockchain technology.

Great Wall Group has also sued the Emerald Education Group and has complained of being unable to get in touch with its management. As of now, the Emerald Education Group’s financial statements are not included in the semi-annual and third-quarter reports of its parent company. This could cause the Shenzhen Stock Exchange to halt trading in Great Wall Group stocks until the situation has been rectified.

Like what you read? Give us one like or share it to your friends
original post…

Continue Reading
Advertisement
Advertisement

Recent Posts

Copyright © 2019 The Crypto Report