Jifeng Agricultural Machinery "Bribery Door" Sounded The Alarm For Corporate Governance Of GEM Companies

Last week, because two subsidiary executives were arrested for bribery, Jifeng agricultural machinery [23.06 -2.95% shares fell into the "bribery door".

Although the company is secretive, evasive and minor in its impact on the follow-up, there is no doubt that its negative effects are spreading halo, which may be much more serious than expected.

Jifeng agricultural machinery (SZ:300022) latest price: 23.06 0.7 2.95%

However, it is the first bull stock of the gem that has been put on the market for a year.

For Jifeng agricultural machinery such a "gorgeous turn", some investors said that the lack of business ethics, it needs to pay a heavy price, Ji Feng Agricultural Machinery "bribery door" for those who are busy on one side, ignoring or even ignoring the company's governance of GEM companies alarmed the alarm.

Jifeng agricultural machinery "bribery door" the protagonist is not an idle person, in the company is a high weight person.

One is the company director, Paul Liu, the chairman of Jifeng Jinqiao company.

According to the 2010 annual report data, Ji Feng Jinqiao realized operating income of 641 million yuan in 2010, contributing 14 million 211 thousand and 800 yuan to the company's net profit, accounting for 21.4% of the total net profit of the company, ranking first among the ten largest subsidiaries.

Another is the director of Chongqing Jifeng Agricultural Machinery Co., Ltd.

Chongqing Ji Feng ranked eighth in its ten largest subsidiary with net profit of about 3 million 730 thousand yuan.

Ji Feng farm machinery set up nearly 160 subsidiaries, the two subsidiaries are indispensable in the performance of listed companies.

A minor branch company or a "trivial" employee in the company bribes, and doubts about corporate governance seem to be insignificant and can not be seen.

However, Ji Feng Agricultural machinery is not the only one that is the two most important branch of the two separated businesses.

Although the current public information is not yet able to conclude that there are some major deficiencies in corporate governance, there is no denying that there are at least one aspect of the company in terms of knowing others, controlling risks and building corporate culture.

Searching for the root causes of these deficiencies is not difficult to find clues from the company's overemphasis on one aspect of its development strategy.

According to reports, Jifeng agricultural machinery listed "has been keen on rapid replication, expansion and pride."

The 2010 annual report shows that the company has established 160 direct outlets and 1406 agency dealers. In 2009, the two figures were 89 and 592, and the expansion rate reached 80% and 138% respectively within one year.

Insiders pointed out that behind the crazy expansion, there will inevitably be loopholes in governance or other aspects. The management pressure brought about by the expansion of the company is not simply the physical accumulation corresponding to its scale, but a geometric increase.

The growth of an enterprise needs to be nurtured. Just like life, it will only leave the boundless land.

Ji Feng Agricultural machinery is paying the price for this. Commercial bribery is a lack of business ethics competition means, lack of the most basic moral foundation, as a public company, its image will be doubly damaged.

Some investors suggested paying close attention to Ji Feng farm machinery near 4 yuan, and cited circumstantial evidence, [33.66 -0.77% shares of Erie stock. After the melamine incident, the stock price once approached the net assets. Ji Feng farm machinery, as a new company, did not exclude the stock price from falling to the net assets. Hopefully, such a big scenario will not happen.

GEM companies generally have trouble growing up. In the fast growing period, there will be such a shortage. This is not surprising. But we must take precautions to avoid tripping. "Ji Feng Agricultural machinery is worthy of warning. As an opportunity for GEM companies, we will get twice the result with half the effort."