Jinchuan Group International Resources Co. Ltd (“Jinchuan Intl”) released the final findings of an independent forensic investigation covering the period from 1 January 2016 to 31 March 2025. The probe was commissioned after complaints and auditor enquiries regarding payments at the Group’s Ruashi Mine in the Democratic Republic of Congo (DRC).
Key investigation parameters • Review scope: USD258.40 million in payments to 18 suppliers and USD7.10 million to a Ruashi employee’s personal account. • Methodology: Analysis of bank records, supplier due-diligence files, computer forensics on 11 employee devices and 18 email accounts, plus 34,000 electronic documents and 48 interviews/confirmations. • Limitations: Missing employee devices, incomplete bank confirmation data and non-responses from several suppliers and former staff.
Principal findings 1. Transactions with valid business purposes – Foreign ore purchases: USD45.10 million (2018-2023). Significant policy breaches included 60.0% of purchases from non-vetted suppliers and 99.6% from vendors not registered in Ruashi’s accounting system. – Government-related payments: USD66.80 million (mainly 2021-2023) to third-party agent GFS to resolve tax and customs penalties. About USD59.00 million was channelled in cash via intermediaries. Documentation deficiencies noted, though a 98% reduction in government claims was evidenced. – Other business expenses: USD9.10 million to seven suppliers for bank fees, spare parts and services; supporting records were often incomplete.
2. Alleged misappropriation scheme – USD144.50 million lacked apparent business purpose: USD137.40 million to 12 suppliers and USD7.10 million to Employee F’s personal account (2017-2024). – Scheme allegedly orchestrated by former senior finance staff (Employees D and E) and facilitated by others, exploiting approval controls and fabricating documents. – Around 96.3% of suspect payments occurred between November 2020 and April 2024, coinciding with Employee D’s tenure as CFO. – Payment approvals: 31.0% by Employee D, 21.4% by Employee E, 6.5% via credentials of a departed CFO, and 10.9% by cheque involving the same individuals.
Remedial and legal actions • Engagement of an external Internal Control Consultant to strengthen procurement, payment, and document-retention procedures. • Termination or suspension of implicated employees; reporting of the case to the DRC Public Prosecutor on 12 December 2025; planned civil and criminal actions to recover losses. • Immediate cessation of business with questioned suppliers and third-party agent; tightened vendor onboarding and payment controls; prohibition of cash or personal-account settlements. • Enhanced Board and group oversight, including direct access to Ruashi’s Delta accounting system and mandatory bi-annual reporting by subsidiary management.
Financial statement impact Misappropriated amounts had been booked as operating expenses in prior years. Following auditor guidance, they will be reclassified as “other losses,” with no material effect on previously reported profits or financial position.
Trading status The company’s shares (HKEX: 02362) have been suspended since 28 March 2025 and will remain halted until further notice.
Shareholders and potential investors are advised to exercise caution when dealing in Jinchuan Intl securities.