Recently, Huawu Co., Ltd. (300095) announced that it may be cheated by the contract, and there is a risk that the payment of more than 37 million yuan cannot be recovered. But the timeliness of the company’s letter has also been questioned. On December 30, Shenzhen Stock Exchange issued a letter of concern to Huawu Co., Ltd., requiring the company to disclose the specific time when it learned that Jiangsu Lanwei optical glasses Technology Co., Ltd. (hereinafter referred to as “Lanwei company”) was suspected of contract fraud, and whether there were cases such as untimely information disclosure. < p > < p > on December 29, Huawu company announced that it was found that the bid winning notice and the purchase order with a military enterprise provided by the personnel of the partner Lanwei company were suspected of forgery and contract fraud. There is a risk that the remaining payment for goods of 37.244 million yuan in this event can not be recovered. < / P > < p > in terms of details, according to the announcement of Huawu, the company had carried out business cooperation with Lanwei company in 2018. Lanwei company said that it signed a military order project for military goggles with a military enterprise, and presented the relevant contract and other information to the company. Huawu said that due to the lack of funds of Lanwei company, it was unable to purchase raw materials needed for production. It proposed to purchase raw materials on behalf of Lanwei company in advance. After the military order was delivered and the payment was received, it would pay the cost of raw materials and reasonable profits to Lanwei company. < / P > < p > according to the demand for raw materials, the company signed raw material sales contracts with Lanwei company in June and July 2018 with the amount of 41.41 million yuan and 15.834 million yuan respectively. After the two sales contracts were signed, the company signed the purchase contracts with the suppliers designated by Lanwei company in the amount of 34.8 million yuan and 13.1544 million yuan respectively, and paid a total of 47.9544 million yuan to the supplier’s bank account according to the purchase contract. By the beginning of 2020, Lanwei company owed Huawu 37.244 million yuan. < p > < p > Huawu said that through multi-party investigation, it was found that the bid winning notice and purchase order with a military enterprise provided by Lanwei company personnel were suspected of forgery, and Lanwei company was suspected of contract fraud. Huawu Co., Ltd. reported the case to Fengcheng Public Security Bureau of Jiangxi Province in December 2020, and recently received the notice of filing a case issued by Fengcheng Public Security Bureau of Jiangxi Province. Fengcheng Public Security Bureau of Jiangxi Province has put the company on file to investigate the contract fraud case. At present, the investigation of the case is in progress. < / P > < p > what is the impact on the company? Huawu said that there was a risk that the remaining payment of 37.244 million yuan in the event could not be recovered, and the specific amount needed to be further confirmed. The event will not have a significant impact on the normal operation of the company’s business. The company will actively cooperate with the public security organs to minimize the losses. On December 30, Shenzhen Stock Exchange issued a letter of concern to Jiangxi Huawu brake Co., Ltd. Shenzhen Stock Exchange expressed great concern about this and asked for supplementary disclosure of the specific time when Lanwei company was suspected of contract fraud, the specific time when the company reported the case and received the case filing notice, and to verify whether there was any situation of untimely information disclosure. < / P > < p > at the same time, it is also required to supplement the specific background, reasons and rationality of the raw material sales contract signed by the company and Lanwei company, whether the relevant transaction has commercial essence, whether there is disguised financial assistance or non operational occupation of the company’s funds; it is also required to supplement and disclose the basic information of the designated raw material suppliers of Lanwei company, and verify Lanwei company and the designated raw material suppliers Is there any relationship with your company, shareholders holding more than 5% of the shares, actual controllers, controlling shareholders, directors, supervisors and senior managers, and is there any other agreement or interest arrangement. < / P > < p > in addition, it is worth noting that public information shows that since April 2018, Wu Guangxu, the legal publisher and 40% shareholder of Lanwei company, has been listed by the court as a dishonest person and restricted from high consumption. It is required to supplement the company’s due diligence on Lanwei company’s credit level, business status, litigation disputes and contract materials, as well as the specific decision-making procedures, and explain whether the relevant decisions are reasonable and prudent, and whether the relevant directors, supervisors and senior executives perform their duties diligently. < / P > < p > finally, combined with the contract fraud incident and the implementation of the internal control system in the process of signing the contract, it is required to further self-examine and disclose whether there are risks that should be disclosed in other contracts signed by your company, the possible impact on the company and the proposed countermeasures. < / P > < p > the data shows that Huawu is mainly engaged in the construction of Industrial Brakes and their control systems R & D, design, manufacturing and sales, is the current domestic production scale, product variety, industry coverage, and has strong independent innovation ability of industrial brake professional manufacturers and industrial brake system solution providers. According to the third quarterly report, from January to September 2020, the company achieved a revenue of 934 million yuan, a year-on-year increase of 34.91%; the net profit attributable to shareholders of listed companies was 137 million yuan, a year-on-year increase of 147.72%. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.