Huafeng Biology's actual controller, chairwoman and general manager Guo Henghua has been approved for arrest by the procuratorate on suspicion of illegally absorbing public deposits. On the evening of June 24, news came that Guo Henghua had been taken into criminal detention, and she resigned from all her positions at the company that day. Huafeng Biology urgently terminated its Hong Kong IPO plan, which had just passed the hearing of the Hong Kong Stock Exchange. Guo Henghua directly holds 18.08% of Huafeng Biology's shares, while Ningbo Ruiheyuan Venture Capital Partnership and Anhui Hengrun Huaye Investment, which she controls, hold 7.77% and 2.91% of the company's shares respectively. Together, the three control nearly 30% of the listed company's equity. Guo Henghua previously founded companies such as Jinguo Microcredit and Jinguo Pawnshop. Her business partner Xue Jinhe had previously been sentenced to 19 years in prison for illegally absorbing public deposits and fundraising fraud. Currently, Huafeng Biology's chief financial officer Fan Yi has taken over as chairman and general manager, but Guo Henghua still holds 30.78% of the voting rights. The company faces a dual governance structure and the risk of a change in control.
Anhui Huaheng Biotechnology Co. Ltd. AActual controller arrested for illegally absorbing public deposits, triggering governance crisis and IPO termination.
