BEIJING, February 16, 2021 / PRNewswire / – Jianpu Technology Inc. (âJianpuâ or the âCompanyâ) (NYSE: JT), a leading independent open platform for the discovery and recommendation of financial products in China, today announced the results of the previously disclosed independent review conducted by the independent audit committee of its board of directors (the âaudit committeeâ) regarding certain matters relating to transactions between the Company and third party business entities, and provided an update on its review of financial statements and NYSE compliance.
As previously indicated by the Company in its late filing notification (form 12b-25) on June 15, 2020, the Audit Committee, with the assistance of advisers, had conducted an internal review of certain matters relating to transactions between the Company and third party business entities. Specifically, the Audit Committee retained the services of Paul Hastings LLP as independent legal counsel to assist in carrying out a review of certain matters relating to transactions made by the Credit Card Referral Business Unit of the Bank. company (the âCredit Card BUâ) with third party entities (the âReviewâ). The audit committee was also assisted by forensic accounting experts from a Big-Four accounting firm which is not the auditor of the Company which worked under that of Paul Hasting direction.
The review is now virtually complete. The review required procedures that the audit committee and the aforementioned professional advisers, in their professional judgment, have determined to be necessary and sufficient to investigate the issues, including, but not limited to, the review of documents. and data from several Company employees (such as reviewing e-mails and other electronic files and communications); interviews with Company employees and relevant third parties; and analysis and testing of relevant Company transactions, as well as books and records. The Company cooperated with the Review.
Summary of Findings
The following is a summary of the main findings of the review as of the date hereof. Unless otherwise indicated, the findings of the review generally cover fiscal years 2017 to 2019.
The review found that some transactions involved third-party agents (including upstream agents and downstream suppliers) with undisclosed relationships, and some transactions lacked commercial substance (âquestionable transactionsâ). As a result, certain related income and expenses have been inflated or incorrectly recorded in the financial statements. The evidence suggests that some employees of the Credit Cards BU may have been aware of or have been involved in some of the questionable transactions that resulted in inflated sales commissions to these employees. With respect to questionable transactions, the review revealed that some employees had incorrectly amended the supporting documents provided to the Company’s external auditor.
With the exception of one employee at the head of a business unit who has since been fired, the review found no evidence that other senior management who oversaw the Credit Cards BU knew about it. or had participated in one of the questionable transactions.
Financial impact assessment follow-up
The Company assesses the overall financial impact of questionable transactions on its financial statements, including the adjustment of revenues recognized for fiscal years 2018 and 2019 to net recognition and the reversal of certain revenues and associated costs and expenses. The Company anticipates that the total amount of overstated income for fiscal years 2018 and 2019 will be approximately, 90 million RMB and 164 million RMB, representing approximately 4.5% and 10.1% respectively of the total revenues previously reported by the Company for those years, and the adjustment of overstated costs and expenses as well as the reserve for potential credit loss of approximately 90 million RMB and 130 million RMB for fiscal years 2018 and 2019, respectively, resulting in a minimal impact on net income for fiscal year 2018 and 34 million RMB the impact of the net loss for the 2019 financial year.
The consolidated financial statements of the Company for the 2018 financial year will be restated accordingly; previously published audited financial statements for fiscal year 2018 and the auditor’s report can no longer be relied on. Additionally, investors should exercise caution when using the Company’s previously disclosed unaudited financial information for fiscal 2019.
Corrective actions in response to the review
The Company, with input from the Audit Committee and the professional advisers described above, has prepared a remediation plan in response to the review, including, but not limited to (i) disciplinary action against employees found guilty of misconduct, (ii) termination of cooperation with high-risk third-party agencies, (iii) adjustment of the Company’s internal structure and reporting lines, if applicable, (iv) improving the Company’s policies and internal controls (including identifying and correcting potential weaknesses and control deficiencies), as well as the financial reporting function, and (v) performing follow-up reviews of additional business units who may share internal control vulnerabilities similar to those identified in the Credit Card BU and take other corrective measures if necessary and appropriate; (vi) organize additional training for Company employees regarding the issues involved in the findings of the review. The Company is in the process of implementing the remediation plan.
NYSE Financial Statement Review and Compliance
In light of the findings of the review to date, the Company’s previously published audited financial report for fiscal 2018 will be restated. The Company cannot at this time provide an estimate of the closing schedule for the financial statements for the 2019 financial year.
As previously stated, the July 2, 2020, the Company received a notice from NYSE Regulation indicating that the Company was not in compliance with section 802.01E of the NYSE Listed Company Manual due to the failure to timely file its annual report on Form 20 -F for the year ended in December. December 31, 2019 (the âForm 20-F 2019â) with the Securities and Exchange Commission. The Company is making every effort to complete the aforementioned review of the financial statements and intends to file Form 20-F 2019 as soon as possible and no later than July 1, 2021 to re-comply with section 802.01E of the NYSE Listed Company Manual.
About Jianpu Technology Inc.
Jianpu Technology Inc. is a leading independent open platform for financial product discovery and recommendation in China. By leveraging its in-depth data insight and proprietary technology, Jianpu provides users with personalized search results and recommendations tailored to each user’s particular financial needs and credit profile. The Company also enables financial service providers offering sales and marketing solutions to reach and serve their target customers more effectively through online and mobile channels and improve their competitiveness by providing them with tailor-made data, a end-to-end risk management and solutions. The Company is committed to maintaining an independent open platform, which enables it to respond impartially to the needs of users and financial service providers. For more information, please visit http://ir.jianpu.ai.
Safe Harbor Declaration
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “will”, “expect”, “anticipate” “,” The future “,” intentions “,” plans “,” belief “,” estimates “,” confidence “and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including, but not limited to, the following: the objective and strategies of the Company; the future business development of the Company, its financial position and its results of operations; the Company’s expectations regarding demand and market acceptance of its solutions and services; the Company’s expectations regarding maintaining and strengthening its relationships with users, financial service providers and other parties with which it works; general economic and commercial conditions; and the assumptions underlying or related to all of the above. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company assumes no obligation to update any forward-looking statement, except as required by applicable law.
For investor and media inquiries, please contact:
Jianpu Technology Inc.
Phone. : +86 (10) 6242-7068
E-mail: [email protected]
The Piacente Group, Inc.
Phone. : +86 (10) 6508-0677
E-mail: [email protected]
In the United States:
The Piacente Group, Inc.
Phone: + 1-212-481-2050
E-mail: [email protected]
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