China Tracker - Details for Fuqi International (FUQI)

 Fuqi International
 Business Outlook

COVERAGE TERMINATED (Going Dark)
Recent Chain of Events:
2012-07-26 -- Last SEC Filing
2011-07-30 -- CFO Resignation
2011-03-29 -- Delisting from NASDAQ
2009-11-09 -- Last Quarterly/Annual Report: Q3/FY2009 ended September 30, 2009

(Source: Trading China, 2012-09-30)

After identification of the cash transfer transactions by the auditor, the Company's management and finance team began to gather information and documentation related to the cash transfer transactions. The auditor subsequently brought this matter to the attention of the Audit Committee of the Board of Directors of the Company, which was requested to expedite the investigation. The Audit Committee determined that Company counsel, with assistance from the Company's finance team, should investigate the cash transfer transactions further and report regularly to the Audit Committee. On January 20, 2011, the Company retained a People's Republic of China ("PRC") law firm to determine whether any violations of PRC law occurred as a result of the cash transactions.

On February 11, 2011, the Audit Committee received a letter from Marcum pursuant to Section 10A(b)(1) requesting that the Audit Committee conclude its investigation into the cash transfer transactions to determine whether the cash transfer transactions violated applicable laws in the U.S. or the PRC. Following receipt of the letter, the Audit Committee engaged special investigative counsel at the Company's outside law firm to undertake the investigation requested by the auditor. The law firm retained a forensic accountant to assist it in the investigation.

The Audit Committee shared with Marcum preliminary findings of the investigation. On March 16, 2011, the Audit Committee received an additional letter from Marcum requesting that the investigation be continued and expanded. On March 22, 2011, the Board of the Company received a letter from Marcum sent pursuant to Section 10A(b)(2) of the Exchange Act further requesting that the Audit Committee's investigation into the cash transfer transactions be expanded to resolve issues noted in the letter. On March 22, 2011, the Audit Committee held a special meeting at which it approved the continuation of the investigation into the cash transactions, and on March 23, 2011, the Board also held a meeting and approved the continuation of the investigation.

The Company currently believes that the cash transfer transactions will not have an impact on the balance sheets and statements of income for the affected periods; however, the transactions are expected to be reflected in the Company's statements of cash flows and disclosed in the notes to the financial statements for the affected periods. Although these transactions began during the last month of the third quarter of 2009, the Company's publicly filed Quarterly Report for that period did not include disclosure regarding the cash transfers because they were not identified until 2010. The restated report for that period will include such disclosures.

The Company has disclosed the cash transfer transactions to the U.S. Securities and Exchange Commission ("SEC"). At this point, the Company is unable to predict what actions any government authority may take in response to such disclosure, and there can be no assurance as to how any resulting consequences may affect the Company's business. Any determination that the cash transfer transactions violated existing laws or regulations in the US or China could result in fines, civil and criminal penalties, interruptions of business, modifications of business practices and compliance programs, equitable remedies, including injunctive relief and other sanctions that may be taken against the Company, Mr. Chong, or other personnel.

(Source: PR Newswire, 2011-03-28)

The Company appeared before the NASDAQ Hearings Panel on November 11, 2010, subsequent to which the Panel determined to continue the listing of the Company's common stock on The NASDAQ Stock Market subject to an extension through March 28, 2011, by which date the Company must file all delinquent reports with the SEC. Under NASDAQ's rules, the extension through March 28, 2011 represents the maximum length of time that the Panel may grant the Company to come back into compliance with its rules. Since the Company is not able to make all such filings by March 28, 2011 and no further extensions are available, the Company expects to receive a delisting determination from the Panel in the very near term indicating that the Company’s common stock will be delisted from The NASDAQ Stock Market.

(Source: 8-K Filing, 2011-03-25)

FUQI International today announced receipt of a determination letter dated September 29, 2010 from Nasdaq advising that FUQI remains out of compliance with the continued listing requirements for failure to timely file SEC periodic reports, and as a result, the Company's common stock is subject to delisting. FUQI intends to request a hearing before a Nasdaq Hearings Panel no later than October 6, 2010 to seek an exception period in which to complete its filings and thereby regain compliance with listing standards. FUQI's request for a hearing will automatically suspend the delisting of its common stock for 15 calendar days from the deadline to request a hearing, or until October 21, 2010; however, the Company also intends to request a further stay on the delisting of its common stock pending the Panel's decision.

(Source: PR Newswire, 2010-09-29)

Fuqi International was notified recently by the SEC of a formal investigation, and has received a subpoena from the SEC for certain documents, relating to its failure to timely file required periodic reports, as well as other matters. The Company intends to fully cooperate with the SEC regarding this matter. No assurances can be given as to the timing or outcome of this investigation.

(Source: 8-K Filing, 2010-09-08)

Currently, we are aware of the number of class action claims filed against the Company. We are taking appropriate actions to address these claims and we intend to defend such claims with guidance from our experienced legal counsel. Lastly, I'd like to emphasize that I still own my entire FUQI stock position since the Company went public in 2007 as I firmly believe in the Company's ability to become one of the largest jewelry enterprises in China and that its full value has yet to be fully recognized. We thank you for continued support and look forward to discussing our 2010 outlook and development plans in greater detail in our upcoming Q4 Earnings Conference Call to be scheduled as soon as possible.

(Source: PR Newswire, 2010-04-07)

General order demand in both our wholesale and retail businesses remains solid for 2010 and we are placing a strong emphasis on maximizing our overall margin performance and the growth of our retail business as we progress through this year. [...] Based on the Company's latest estimate, the earnings per share included in the previously issued financial statements for the nine months ended September 30, 2009 were overstated by approximately $0.15-$0.19 per share based on approximately 23.0 million weighted average number of shares for the nine months ended September 30, 2009. The foregoing estimate is based only upon preliminary information available to the Company as of the date of this press release, is subject to adjustment in connection with its ongoing review, and has not been audited by its independent registered public accounting firm. Due to the Company's ongoing internal analysis, the Company is currently unable to provide estimated results of operations for the year ended December 31, 2009. [...] As a fast growing company, we remain focused that our operating entity financial accounting infrastructure grows stronger and we are committed to invest more resources in our internal auditing function as well. We remain confident in the fundamental soundness of our businesses and look forward to discussing our 2009 financial results and developments for 2010 when we report our fourth quarter and full year 2009 financial results.

(Source: PR Newswire, 2010-03-16)
FUQI
Retail/Consumer
SCORE
6
UNDER REVIEW
READ: Score Cards Explained
SAFETY/RISK SCORE
EXTREME RISK
DETAILS: Safety/Risk Model for FUQI
Current Price:  n/a
F10k Day (2007-10-23): -100.00%$10.47
2009 Close: -100.00%$17.95
2010 Close: -100.00%$6.38
2011 Close: -100.00%$1.15
High (2012-02-28): -100.00%$1.46
Low (2012-06-29): -100.00%$0.55
Exchange: N/A
Market Capitalization: n/a
Total Shares: 27.63 mill
Float: n/a
Avg Volume: n/a
Last Quarter: 2009-09-30
Revenue (MRQ): 127.19 mill
Net Income (MRQ): 18.79 mill
all financial data provided without warranty