Don’t bank on it
Jiugui Liquor doesn’t pull any punches. Jiugui translates into English as “alcohol devil” and is a term commonly used to refer to drunkards. And with a name like that, perhaps it’s not surprising that the company has stumbled into a spot of trouble.
The maker of baijiu, a clear spirit usually distilled from sorghum, has announced that Rmb100 million ($16.5 million) has been stolen from one of its bank accounts. The money was withdrawn from an Agricultural Bank of China account over the space of three days, and the theft will contribute to a net loss for the company in 2013, reports Reuters.
While it’s an embarrassing admission for Jiugui, people are puzzled about how this kind of crime could happen. One financial professional told CBN that it’s very unusual. Corporate customers wanting to make withdrawals need to produce seals normally kept in locked drawers by company finance officials.
But staff at the bank told CBN that all the necessary procedures for Jiugui’s withdrawal were completed.
The scepticism has spread online, with incredulous netizens doubting the official story.
“This is so funny. I have to personally make a reservation with the bank if I want to transfer Rmb1 million,” says one netizen, who then referred to company’s description of the incident as a “fairy tale”.
Others suspect some sort of inside job: “This was definitely done by the people within the company, as outsiders can’t get access to the official seal to transfer such a large amount of money.”
This is the latest in a string of unfortunate events at Jiugui over the last two years. Most makers of baijiu – a booze typically drunk in large quantities at Chinese banquets – have been hit by Xi Jinping’s anti-corruption drive, which has scared revellers into cutting back on boozy meals.
But Jiugui was also troubled by a safety scandal in 2012 when plasticising agent (a chemical that makes plastic more flexible) was found in some of its products (see WiC174). The Global Times reported at the time that Jiugui contained as much as 260% more than the national standard, marking a turning point for a stock that had outperformed in previous years (it had ridden a baijiu boom spurred by businessmen entertaining government counterparts).
Since then the company’s share price has shrunk in sync with its profits, with Jiugui stock trading at just over Rmb11 at the beginning of this week, compared with a high of Rmb60 at one point in 2012.
But there might be a slither of good news for Jiugui, as Reuters is reporting that six people have been arrested on suspicion of the bank theft.
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