Pou Sheng International Ltd., one of the world’s biggest producers of branded shoes, saw shares fall as much as 37 percent after the company’s chief financial officer published inaccurate sales numbers last week and was consequently let go, reported the South China Morning Post.
The company’s CEO resigned after the scandal, playing a part in the share decline, taking out HK $4.1 billion of the company’s value, and making the share prices of 62 percent shareholder, Yue Yuen Industrial Holdings, fall 9.8%.
“The Company discovered on January 6, 2017 certain incorrect sales records in the month of December 2016, which could potentially lead to recognition of revenue for sales transactions that did not take place before end of year 2016,” said Pou Sheng in its Hong Kong Stock Exchange filing.
The manipulated figures did not significantly affect the group’s overall earnings, and did not affect overall financial information released before the announcements.
Pou Sheng hired Deloitte to check accounting records for the company in an effort to rectify the situation.
The company continues to struggle after a rough few quarters, as same store sales growth slowed to 4.6% for the first three quarters of the year from 6.7% for the first half, creating concern among investors.
Overall, Pou Sheng closed Monday trading down 22.22% percent while Yue Yuen only closed at a not-so-bad decrease of 6.88%.