FRC Investigates Victory City Financial Statements and Deloitte Audit

19 Mar, 2021

The FRC today announces the initiation of:

(i) An enquiry into the financial statements of Victory City International Holdings Limited (Victory City) for the year to 31 March 2020 (Annual Accounts) and six months to 30 September 2020 (Interim Accounts); and

(ii) An investigation into the audit of the Annual Accounts by Deloitte Touche Tohmatsu (Deloitte).

In an announcement on 22 February 2021 (First Announcement), Victory City noted that, in a letter from Deloitte dated 11 February 2021 received by the audit committee on 16 February 2021 (First Letter), Deloitte stated that on 22 January 2021 it had obtained two credit reports relating to two Mainland subsidiaries of Victory City and that the credit reports contained certain outstanding borrowings of RMB946 million (borrowings), “part of which” might not have been included in the Annual Accounts and the Interim Accounts.

Deloitte was the auditor of the Victory City Annual Accounts and expressed an unmodified audit opinion on them. Deloitte also expressed an unmodified review conclusion on the Interim Accounts.

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