The London Stock Exchange has censured and fined Yü Group plc £300,000 for failing to maintain effective controls to enable compliance with the AIM Rules and for announcing inaccurate information to the market.
During the course of the first half of its financial year to 31 December 2018, the company made a number of forecasts that its full year profits before tax would exceed market expectations. This was during a period of exponential business growth. However, during further internal assurance work undertaken by the company, it identified that there were material errors in its management information and the company in fact made a significant loss. The company’s review identified that the quality and accuracy of aspects of its financial and management information had not kept pace with the company’s growth.
The London Stock Exchange concluded that:
- the company had failed to ensure that it had in place sufficient procedures, resources and controls to comply with the AIM Rules, in breach of AIM Rule 31; and
- the lack of effective financial reporting systems and controls meant that the company’s disclosure was inaccurate, in breach of AIM Rule 10.
The fine has been waived in this instance, due to the uncertainties and potential financial challenges for the company arising from the Covid-19 pandemic.
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