China’s securities regulator ordered Huachen Group, parent of BMW Group’s partner Brilliance China Automotive Holdings, to pay a 53.6 million yuan ($8.3 million) fine for severe misconduct while disclosing financial information.
Details about the fine were disclosed last week by Shenyang Jinbei Automotive Co., Huachen Group’s van subsidiary listed in Shanghai.
Huachen Group provided false information in 2017 and 2018 financial reports, used falsified financial records to win regulatory approval for corporate bonds issued in 2019 and 2020, and delayed financial information disclosures, Shenyang Jinbei said, citing a ruling from the China Securities Regulatory Commission.
In addition, 11 former executives of Huachen Group, including its former chairman, Qi Yumin, were fined 80,000 yuan to 600,000 yuan for participating in the practice.
In October 2020, Huachen Group defaulted on a 1-billion-yuan bond, prompting the China Securities Regulatory Commission to launch an investigation into the company for possible violations of information disclosure regulations.
One month later, the company received approval for bankruptcy protection by a court in the northeast China city of Shenyang, where it is incorporated.
In late August, BMW’s China subsidiary disclosed plans to participate in Huachen Group’s asset restructuring by acquiring the troubled company’s vehicle assembly plant in Shenyang. Details on the expected deal have yet to be released.
BMW Group assembles vehicles for the BMW brand with Brilliance China in Shenyang. Under an agreement the two companies signed in 2018, BMW would pay 3.6 billion euros ($4.2 billion) to raise its stake in the joint venture from 50 percent to 75 percent in 2022.
Huachen Group also operates a light commercial vehicle partnership in Shenyang with Renault SA that now builds vans for the Jinbei brand.
