Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (002271.SZ), a leading waterproofing company in China's A-share market, has fallen victim to a cyber fraud incident. The company announced that its U.S. subsidiary, OYH Construction Materials LLC, was defrauded of approximately $1.72 million (around 12.12 million yuan), accounting for about 1.5% of its net profit for the first three quarters of this year.
The fraud occurred during a routine payment process for construction progress, where criminals hacked the email system, impersonated the contractor, and induced the transfer. Upon discovering the anomaly, OYH promptly reported the incident to local U.S. law enforcement and the FBI's Houston division.
Oriental Yuhong stated that the incident is isolated and will not significantly impact normal operations. The company has formed a task force to investigate and mitigate risks. As the case remains under investigation, final outcomes are uncertain, and accounting adjustments will follow based on results.
Notably, OYH was established recently in March 2024 in Houston, Texas. Its executives include Bin Liu, Oriental Yuhong’s vice chairman, and Jianjun Li, general manager of its North American operations. The company has been expanding aggressively in North America, with a $100 million R&D and production base in Houston set to complete by year-end.
This case is not isolated. Other Chinese listed firms, including Shenzhen Hepalink Pharmaceutical Group Co., Ltd. (002399.SZ), Dare Power Dekor Home Co., Ltd. (000910.SZ), and Suzhou Slac Precision Equipment Co., Ltd. (300382.SZ), have reported similar overseas cyber fraud incidents in recent years, highlighting growing cybersecurity risks amid global expansion.
The trend underscores the urgent need for enhanced financial controls and digital security measures as Chinese companies accelerate overseas operations.
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