I wrote about Eratat Lifestyle Ltd. before, here and here.
Unfortunately, things have progressed as expected. The company made a new announcement, with only bad news in it.
Instead of RMB 577 million the company only had a tiny fraction of that amount in the bank. And to make things worse, it even had RMB 34 million borrowings and RMB 30 million trade bills.
As has been the case in several companies in China, the cash in the bank is simply not there. Normal bank statements, online statements, confirmations by the local bank manager of the opposite, they were all simply useless.
Well, at least it explains why the company had to borrow money.
This would be extremely frustrating for the minority shareholders.
When it rains it pours.
Would it be an idea to have a central fund, in which all listed companies contribute a small amount of money on a yearly basis, which could be used for these kind of cases? That at least the disadvantaged shareholders know what actually had happened, and to enable some sort of justice.