China Environment auditors uncover "non-existent" gross receivables

CHINA Environment on Friday said two surprise site visits by its auditors have uncovered gross receivables for fiscal 2015 that are either "non-existent", or overstated.

Of the total gross receivables of 786 million yuan (S$164 million) before impairment, about 43.5 per cent is concluded to be non-existent, and 30.8 per cent concluded to be overstated. The rest are still under investigations.

Based on findings from its auditor's second site visit alone, the board noted trade receivables due from Shanxi Electric amounting to 70 million yuan in its unit, Fujian Dongyuan Environmental Protection Co Ltd, is likely to be grossly overstated by 48 million in the unaudited group financials for fiscal 2015.

These trade receivables make up about 8.9 per cent of the total gross receivables of 786 million yuan before impairment.