Shoemaker fined $63,000 for fraud

The Ontario Securities Commission (OSC) has found Chinese shoemaker Zungui Haixi Corporation and its two founders, Yanda Cai and Fengyi Cai, guilty of fraud.

Specifically, they “have demonstrated a total and continuing disregard for their obligations under Ontario Securities law” and “have demonstrated from their conduct that they are fundamentally ungovernable,” says the OSC.

The trouble began when auditors couldn’t confirm that the firm’s cash balances actually exist. Yanda and Fengyi refused to co-operate with the OSC’s investigation into the company.

Read: Beware your auditor

As a result, the Commission has made protective orders including: permanently removing Zungui from Ontario capital markets; prohibiting its founders from becoming or acting as directors or officers of any issuer; and prohibiting trading in any securities of Zungui.

Also, the OSC panel ordered Yanda and Fengyi to pay $63,667.50 on a joint and several basis.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.