Vivi Co., Ltd.: Correction of Previous Accounting Errors

On April 3, Viviv Shares Co., Ltd. released an announcement stating that on April 3, 2026, the company received the “Decision on Administrative Regulatory Measures” (No. 〔2026〕32) issued by the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as the “Jiangsu CSRC”) (hereinafter referred to as the “Decision Document”). The specific contents are announced as follows:

The “Decision Document” contains the following:

“Upon investigation, it has been found that for certain grain and oil trading business revenue recognized by Wewe Food and Beverage Co., Ltd. (hereinafter referred to as the company) from 2022 to 2024, the methods of using the gross method and the net method were not appropriate, which does not comply with Article 34 of the Accounting Standards for Business Enterprises No. 14—Revenue, resulting in inaccurate disclosures of the company’s operating revenue and operating costs in its Q1, interim, and Q3 reports for 2022, 2023, and 2024. The related conduct violates the provisions of Article 3, paragraph 1 of the “Measures for the Administration of Information Disclosure by Listed Companies” (CSRC Order No. 182) (hereinafter referred to as the “Information Disclosure Measures”). The company’s Chairman Ren Dong, General Manager Zhao Huiking, and Chief Financial Officer Zhao Changlei failed to perform their duties with due diligence, in violation of the provisions of Article 4 of the “Information Disclosure Measures,” and bear primary responsibility for the above-mentioned violations by the company.

Pursuant to Article 52 of the “Information Disclosure Measures,” this bureau has decided to take administrative regulatory measures requiring rectification against the company, and to take administrative regulatory measures of issuing letters of warning against Ren Dong, Zhao Huiking, and Zhao Changlei, and to record the matter in the integrity file of the securities and futures market. You shall attach great importance to the above issues, take effective measures to carry out rectification in a practical manner, strengthen your study of securities laws and regulations, improve your level of financial accounting and awareness of standardized operations, prevent the recurrence of such violations, and submit a written rectification report to this bureau within 10 working days from the date of receipt of this Decision Document.”

On the same day, Viviv Shares Co., Ltd. released an announcement regarding the correction of prior accounting errors. The announcement shows that, because the company was unable to accurately distinguish whether it was the principal or the agent in certain transactions for its financial statements for the first three quarters of 2022, 2023, and 2024, there were judgment deviations as to whether to apply the net method or the gross method for accounting for certain businesses. To execute the relevant provisions of the Accounting Standards for Business Enterprises more rigorously, the company conducted a stricter assessment of the substance of transactions for the relevant businesses. Based on the principle of prudence, for businesses in which the company acts as the principal in the transactions, the company uses the gross method for accounting, and for businesses in which the company acts as the agent in the transactions, the company uses the net method for accounting. On April 3, 2026, the company convened the 12th meeting of the ninth session of the board of directors to deliberate and approve the “Proposal on the Correction of Prior Accounting Errors,” and to make retrospective adjustments to the company’s financial statements for the first three quarters of 2022, 2023, and 2024.

This correction of prior accounting errors involves adjusting the operating revenue and operating costs in the company’s first-quarter reports, interim reports, and third-quarter reports from 2022 to 2024. Accordingly, it reduces operating revenue and operating costs in the first quarter of 2022 by 117,461,080.27 yuan; increases operating revenue and operating costs in the first half of 2022 by 31,360,493.78 yuan; reduces operating revenue and operating costs in the third quarter of 2022 by 105,644,114.14 yuan; reduces operating revenue and operating costs in the first quarter of 2023 by 128,915,889.33 yuan; reduces operating revenue and operating costs in the first half of 2023 by 247,004,028.63 yuan; reduces operating revenue and operating costs in the third quarter of 2023 by 448,238,498.78 yuan; reduces operating revenue and operating costs in the first quarter of 2024 by 126,056,810.02 yuan; reduces operating revenue and operating costs in the first half of 2024 by 71,911,622.40 yuan; and increases operating revenue and operating costs in the third quarter of 2024 by 33,705,545.95 yuan.

(Company announcement)

(Editor: Wang Can, Lin Chen)

Keywords:

                                                            Beverage
                                                            Viviv Shares