Wolf Warrior 2 blockbuster filmmaker embroiled in own drama as stock exchange queries financial allegations

Beijing Jingxi Culture and Tourism, producer of Wolf Warrior 2, was queried by the Shenzhen Stock Exchange after former vice-chairman alleged accounting fraud

Shares of the filmmaker tumbled by the 10 per cent daily limit to a six-year low even after company dismissed accusations

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A still from Beijing Jingxi’s blockbuster movie Wolf Warrior 2, China’s record-grossing movie released in 2017. The filmmaker has found itself in the midst of a drama amid allegations of financial irregularities. Photo: Handout

Published: 6:00pm, 30 Apr 2020Updated: 8:07pm, 30 Apr 2020

Beijing Jingxi Culture and Tourism, the producer of China’s highest-grossing movie Wolf Warrior 2, is embroiled in a drama of its own making amid allegations of accounting fraud and embezzlement.

Events unfolded this week after former vice-chairman Lou Xiaoxi wrote on his microblog that chairman Song Ge and director Zhang Yunlong inflated earnings in 2018 and misappropriated funds in 2016 to cover losses at another unit.

The Shenzhen Stock Exchange asked the filmmaker late on Wednesday to respond on the matter by May 11, in a letter that reproduced Lou’s allegations of financial irregularities at the company.

Shares of Beijing Culture tumbled by the 10 per cent daily limit to 6.92 yuan on Thursday to their lowest level in six years. The dispute has quickened the company’s descent in ranking among the nation’s movie producers, having lost half of its market value in the past three years.

The stock slumped even after the filmmaker dismissed all the allegations in a brief statement late on Wednesday. Lou himself has fled the country after being investigated by the Beijing police in January for embezzling funds, the company said.

Lou, who resigned from the board last year, had said in his blog that Song used 14 million yuan (US$1.97 million) from the company to help a former company president cash out of the stocks, and gave some to a former chief financial officer as severance fee. The company denied both in its statement.

The case has sharpened the market focus on Chinese companies at home and abroad for the wrong reason, after high-profile revelations of financial misconduct in recent months. Fabricated sales at Luckin Coffee, for example, have slammed investors and spawned lawsuits.