In April this year, Cai Shen, the former board secretary of Luxiao Technology, was criminally detained on suspicion of committing a crime. Now the company has been investigated by the China Securities Regulatory Commission for violating laws and regulations.
At the same time as the announcement under investigation, there was also an "Announcement on the Diversion of Company Project Construction Funds". In this announcement, Luxiao Technology stated that the company had diverted 30 million yuan of IPO funds in 2012, and this part of the funds went through a tortuous path and finally entered the pockets of the major shareholder Luxiao Group.
Illegal use of 30 million IPO fund-raising
Luxiao Technology announced yesterday that the company received a notice of investigation from the China Securities Regulatory Commission on the 9th. Because the company was suspected of violating securities laws and regulations, the China Securities Regulatory Commission decided to launch an investigation into the company. The company will actively cooperate with the China Securities Regulatory Commission’s investigation and strictly fulfill its information disclosure obligations. Luxiao Technology also revealed that the current production and operation conditions of the company are normal, and the company’s 2012 annual audit work is in progress.In progress.
According to the announcement, in September 2012, the board of directors of Roxiao Technology passed the motion "On Investment and Construction of Industrial New Technology R&D Base Project". The total investment in the R&D project was 103 million yuan. The early progress of the project was relatively smooth. The company transferred from Zhuji City on December 25, 2012. The Bureau of Land and Resources obtained the land use rights for the construction of the project's research and development base through bidding. However, since the purchased land is not a piece of land that can be directly put into use, the company must also deal with the ponds, graves, crops near the land, and do related greening, road construction and other supporting construction.
Taking into account the difficulty of project implementation and the high irregular expenditure of supporting projects, the company decided to hand over the supporting projects of the R&D project to the company's controlling shareholder Luxiao Group for implementation. The company's finance and infrastructure departments transferred 30 million yuan in subsequent infrastructure projects through the company's subsidiary Zhejiang Luxiao Electronic Wire Co., Ltd. (hereinafter referred to as "Luxiao Wire") in two installments (20.5 million yuan and 9.5 million yuan) to Luxiao Group for R&D project supporting and engineering fee payment, resulting in violations. As of now, 70% of the project has been completed.
"The finance and infrastructure departments have a serious lack of understanding of the supervision of funds raised by listed companies and project construction. They believe that as long as the funds are used for listed companies, the methods and methods are not important, as long as they are not used for controlling shareholders." Luxiao Technology Company disclosed in the self-examination announcement. However, the author discovered that the company auctioned the land use rights on December 25, 2012, and the auction only started on December 8, 2012. However, on November 27, 2012, the subsidiary Luxiao Wire Materials indirectly transferred the acceptance bill of 20.5 million yuan to the account of Luxiao Group Co., Ltd. through the special account for raising funds supervision through the endorsement of the construction unit. That is to say, before the land was auctioned, the company had already transferred the money to the controlling shareholder's account.
Another announcement released by Luxiao Technology today shows that in September 2012, the company's board of directors passed a resolution and decided to invest 103 million yuan in building an industrial new technology research and development base project. To this end, on December 25 of the same year, the company bid for the corresponding land for the construction of supporting projects. After that, Luxiao Technology Infrastructure and the leaders decided to hand over the supporting projects to the controlling shareholder Luxiao Group for implementation.
On November 27 and December 12, 2012, the special account for raising funds from Roxia Technology, a wholly-owned subsidiary of Roxia Electronic Wire, transferred acceptance bills of 20.5 million yuan and 9.5 million yuan indirectly to accounts such as Roxiao Group through the endorsement of the construction unit, and used them directly or indirectly for the implementation of supporting projects for research and development projects. According to the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, the raised funds must be deposited in special accounts in accordance with regulations and used exclusively for special purposes. Therefore, Luxiao Technology’s use of raised funds for non-raised investment projects is contrary to this regulation. After the incident, Roxiao Group took the initiative to return the above 30 million yuan in funds and interest to Roxiao Technology on July 21 this year.
Regarding the violations, Luxiao Technology explained that this stems from the company's management's lack of awareness of laws and regulations, serious misunderstandings about the use and financial management of raised investment project funds, and the financial and infrastructure departments' serious lack of understanding of listed companies' fundraising and project construction supervision; and the company's internal financial management system is not standardized and operates in violation of relevant regulations. The company has written a self-examination report on the above-mentioned incidents and reported it to the regulatory authorities. It will humbly accept the investigation and punishment of the regulatory authorities and report to the investors.The person apologizes.
The sponsor found no violations
According to Luxiao Technology, the company’s diversion of 30 million yuan in fundraising occurred in November and December 2012. A special report on the storage and use of raised funds in 2012 disclosed by the company on April 24, 2013 stated that "the company did not use any surplus funds for other raised fund investment projects or non-raised fund investment projects in 2012. As of the end of 2012, the unused raised funds were deposited in a special account for raised funds."
In addition, the sponsor agency Dongxing Securities believes that after verification, the storage and use of the funds raised by Roxiao Technology in 2012 complied with the provisions of relevant laws and documents. The raised funds were stored and used exclusively in a special account. There was no disguised change in the use of the raised funds and damage to the interests of shareholders, and there was no illegal use of the raised funds.
Until the announcement released on April 28 this year, Luxiao Technology and Dongxing Securities still provided information on the use of raised funds.However, similar expressions are used.
The author noticed that the industrial new technology R&D base project invested by Luxiao Technology with an investment of 103 million yuan is not an investment project raised by the company's IPO funds, and the construction of supporting engineering projects for this project is naturally not an IPO investment project. However, the listed company invested 30 million yuan of IPO proceeds, which is inconsistent with the above statements of the company itself and the sponsor Dongxing Securities.
"Since the management has low awareness of laws and regulations and has misunderstandings about the use and financial management of funds raised from investment projects, why has Luxiao Technology been able to successfully hide the diversion of funds raised in the past two years?" Some investors questioned in the stock bar.
What are the facts? We still need to wait for the results of the China Securities Regulatory Commission’s investigation to be released.
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