At the same time as the announcement under investigation, there was also an "Announcement on the Diversion of Company Project Construction Funds". In this announcement, Luxiao Technology stated that the company had diverted 30 million yuan of IPO funds in 2012, and this part of the funds went through a tortuous path and finally entered the pockets of the major shareholder Luxiao Group.
Illegal use of 30 million IPO fund raising
Luxiao Technology announced today (10th) that the company received a notice of investigation from the China Securities Regulatory Commission on the 9th. Because the company was suspected of violating securities laws and regulations, the China Securities Regulatory Commission decided to launch an investigation into the company. The company will actively cooperate with the China Securities Regulatory Commission’s investigation and strictly fulfill its information disclosure obligations. Luxiao Technology also revealed that the company's current production and operation conditions are normal, and the company's 2012 annual audit is in progress.
Another announcement released by Luxiao Technology today shows that in September 2012, the company's board of directors passed a resolution and decided to invest 103 million yuan in building an industrial new technology research and development base project. To this end, on December 25 of the same year, the company bid for the corresponding land for the construction of supporting projects. After that, Luxiao Technology Infrastructure and the leaders decided to hand over the supporting projects to the controlling shareholder Luxiao Group for implementation.
On November 27 and December 12, 2012, the special account for the supervision of funds raised by Luxiao Electronic Wire, a wholly-owned subsidiary of Luxiao Technology, transferred acceptance bills of 20.5 million yuan and 9.5 million yuan indirectly to accounts such as Luxiao Group through the endorsement of the construction unit, and used them directly or indirectly for the implementation of supporting projects for research and development projects. According to the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, the raised funds must be deposited in special accounts in accordance with regulations and used exclusively for special purposes. Therefore, Luxiao Technology’s use of raised funds for non-raised investment projects is contrary to this regulation. After the incident, Roxiao Group took the initiative to return the above 30 million yuan in funds and interest to Roxiao Technology on July 21 this year.
Regarding the violations, Luxiao Technology explained that this stems from the company's management's lack of awareness of laws and regulations, serious misunderstandings about the use of funds raised for investment projects and financial management, and the financial and infrastructure departments' serious lack of understanding of the supervision of funds raised by listed companies and project construction supervision; and the company's internal financial management system is not standardized and operates in violation of relevant regulations. The company has written a self-examination report on the above incidents to the regulatory authorities, will humbly accept the investigation and punishment of the regulatory authorities, and apologizes to investors.
The sponsor found no violations
According to Luxiao Technology, the company’s diversion of 30 million yuan in fundraising occurred in November and December 2012. The company's special report on the storage and use of raised funds in 2012 disclosed on April 24, 2013 stated that "the company did not use surplus funds for other raised fund investment projects or non-raised fund investment projects in 2012. As of the end of 2012, the unused raised funds were deposited in a special account for raised funds."
In addition, the sponsor agency Dongxing Securities believes that: after verification, the storage and use of the raised funds in 2012 by Luxiao Technology complied with the provisions of relevant laws and documents, and the raised funds were stored and used exclusively in a special account. There was no disguised change in the use of the raised funds and harm to the interests of shareholders, and there was no illegal use of the raised funds.
Until the announcement released on April 28 this year, Luxiao Technology and Dongxing Securities still used similar expressions regarding the use of raised funds.
The reporter noticed that the industrial new technology research and development base project invested by Luxiao Technology with an investment of 103 million yuan was not an investment project raised by the company's IPO funds, and the supporting engineering construction of the project was naturally not an IPO raised investment project. However, the listed company invested 30 million yuan of IPO proceeds, which is inconsistent with the above statements of the company itself and the sponsor Dongxing Securities.
"Since the management has low awareness of laws and regulations and has misunderstandings about the use and financial management of investment project funds, why has Luxiao Technology been able to successfully hide the diversion of funds raised in the past two years?" Some investors questioned in the stock bar.
What are the facts? We still need to wait for the results of the China Securities Regulatory Commission’s investigation to be released.
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