China Renaissance, a prominent player in China’s tech industry, announced on April 3 that it would halt trading of its shares and postpone the release of its annual results. The company cited auditors’ inability to complete their work or approve their report due to the unavailability of Bao Fan, the founder chairman and controlling shareholder who remains unreachable.
Bao gained fame for his involvement in the mergers of Didi and Kuaidi, Meituan and Dianping, as well as 58.com and Ganji. However, China Renaissance reported in late February that Bao was under investigation by certain authorities in the country and was cooperating with them.
China Renaissance, being a Hong Kong-listed company, must release its preliminary announcement of the 2022 annual performance within three months after the fiscal year ends on December 31, 2022. This is in compliance with Hong Kong’s listing rules. The financial statements for that fiscal year should be audited and agreed upon by auditors.
The company has reported that its auditors have been unable to complete the audit and approve the earnings report due to Bao’s unavailability for contact. The board is also uncertain about when it will be able to approve the audited results or release the annual report by April 30. However, delaying the publication of 2022 annual results will not significantly affect the group’s ongoing business operations, according to a statement from the group.
China Renaissance appointed Deloitte Touche Tohmatsu Certified Public Accountants LLP as its auditor after going public. At the shareholder annual meeting on June 30, 2022, it was announced that the auditor had been reappointed.
On April 2, China Renaissance also announced its 2022 unaudited annual results. Its total revenue in 2022 was 1.587 billion yuan ($230 million), a year-on-year decrease of 36.6%, while the net loss reached 564 million yuan. China Renaissance stated that the Hong Kong and US IPO market and the secondary market environment in 2022 are almost at the most difficult time in the past ten years, which has brought certain pressure on its private equity financing, Hong Kong and US IPO business and asset management business.