【Fragrance Stock】Ying Tong Announces Royce Henson Resigns as Auditor, Luo Shen Mei Takes Over - Involves Investigation of 70 Million Prepayment After Listing

Perfume Group Ying Tong Holdings (06883)
Announces that PricewaterhouseCoopers has resigned as the company’s auditor, effective March 16. Following the recommendation of the audit committee, RSM Hong Kong has been appointed as the new auditor.

PricewaterhouseCoopers Resignation Triggered by Concerns Over Prepayment of HKD 70 Million Post-IPO

In its resignation letter, PricewaterhouseCoopers stated that Ying Tong Holdings completed its IPO on June 26, 2025, and shortly after listing on the Hong Kong Stock Exchange, entered into several agreements with three service providers to obtain long-term public relations, data analysis and consulting, and social media promotion services, with prepayments of HKD 70 million.

PricewaterhouseCoopers requested management to explain four key points:

PricewaterhouseCoopers later asked Ying Tong Holdings management to provide explanations, information, and documents regarding these matters, including but not limited to:

(1) Background information on the service providers, their roles, and involvement in the company’s IPO;
(2) Internal controls and approval procedures Ying Tong conducted before engaging these service providers, and the considerations or recommendations involved;
(3) Whether the service fees, contracts, and payment terms are comparable to market prices and conditions for similar services;
(4) Whether the payments made to these service providers are classified as listing expenses or used for IPO fundraising purposes approved by the board, and whether such payments have been considered.

Audit Progress Blocked and Costs Increased, Ying Tong Decides to Change Auditors

PricewaterhouseCoopers was informed that Ying Tong had engaged an independent professional consultant to investigate these matters. PricewaterhouseCoopers notified the Ying Tong board that the investigation results would form the basis for the group’s 2025/2026 annual audit and would significantly impact the nature, timing, and scope of the audit procedures they need to perform. Therefore, PricewaterhouseCoopers required full knowledge of the investigation’s progress.

However, as of March 16, PricewaterhouseCoopers had not received detailed scope of the investigation, nor the explanations, documents, or data they requested. Due to the inability to establish a clear timetable for the additional procedures required and the potential for increased audit costs, Ying Tong decided to replace the auditor and requested PricewaterhouseCoopers to resign.

Ying Tong stated that, to maximize the protection of the company and shareholders’ interests, the board resolved on January 6, 2026, to establish an independent investigation committee composed entirely of independent non-executive directors to conduct the investigation.

The committee appointed Baker McKenzie Law Firm as Legal Advisor
Baker engaged Kaitian Business Consulting as Independent Forensic Accountant to conduct the investigation.

Three Major Actions Previously Taken to Assist the Audit of Ying Tong:

The investigation is still ongoing. Ying Tong stated that it maintains ongoing communication with PricewaterhouseCoopers to assist with the audit, including but not limited to:

(1) Providing PricewaterhouseCoopers with the proposed scope of investigation for review and responding to their comments;
(2) Providing PricewaterhouseCoopers with the engagement letter with Baker for review;
(3) Holding meetings between PricewaterhouseCoopers and Baker regarding the investigation.

Additionally, the company has considered the additional audit fees suggested by PricewaterhouseCoopers for handling these matters.

Ying Tong states that RSM Hong Kong will be responsible for completing the 2025/2026 annual audit. The board emphasizes that the group remains operational and commits to providing RSM Hong Kong with all necessary information to complete the audit.