The final result of the State Grid's fuse-breaker incident involving Qingdao Topscomm Communication Inc. was announced tonight: a two-year ban, and the company is expected to lose about 3.3 billion yuan in revenue in the future. The severe punishment results indicate that the company's judgment on delaying the disclosure of relevant information because it expected the impact of the State Grid fuse-breaker incident on its performance to be insignificant, was incorrect.
Qingdao Topscomm Communication Inc. (603421.SH) has finally received the result of the State Grid melting incident.
This evening, Qingdao Topscomm Communication Inc. announced that according to the "National Grid Corporation's Notice on the Handling of Supplier's Bad Behavior" issued by the State Grid on June 3, the company has been blacklisted for two years from February 23, 2024 to February 22, 2026, for all categories of the National Grid's system procurement. The punishment by the State Grid is estimated to result in a total decrease in the company's revenue of approximately 3.3 billion yuan in the next 4-5 years, while the company's revenue was 3.633 billion yuan last year.
Specifically, based on the company's estimated winning amount and confirmed income within the National Grid system in the past two years, the punishment of the State Grid is estimated to reduce the company's revenue by approximately 550 million yuan in 2024, 1.42 billion yuan in 2025, and 980 million yuan in 2026.
This result is consistent with the analytical opinion previously reported by Caijing News. "The company's alleged violations are relatively serious, and the industry judges that it will be suspended from bidding for at least 1-2 years," said a related person in the domestic electric meter industry to Caijing News reporter.
The punishment result of the State Grid also confirms this statement. At the same time, this severe punishment result also indicates that the company's judgment on delaying the disclosure of relevant information because of the "expected negligible impact of the State Grid meltdown incident on the company's performance" was completely wrong.
On March 29, Qingdao Topscomm Communication Inc. announced that the State Grid has decided to launch the "melting mechanism" for bidding and procurement for all products and services of the company from February 18 and investigate the company's alleged violations. During the melting period, the company's qualification for bidding for all products and services will be suspended.
Caijing News reporter previously reported that the company's meltdown by the State Grid may be related to the bribery case of former employees. However, Qingdao Topscomm Communication Inc. has repeatedly stated that bribing for winning contracts is the personal behavior of employees. Some industry insiders pointed out that such behavior is similar to a "firewall" set up by companies to avoid legal risks.
Before the announcement of the State Grid's punishment result, on the evening of May 8th, Qingdao Topscomm Communication Inc. announced that it had received a notice titled "Announcement of the State Grid Hubei Provincial Power Co., Ltd. on the Handling of Supplier's Bad Behavior" issued by the State Grid Hubei, and the company was blacklisted for two years. On the same day, the company also disclosed that it had received the "Administrative Punishment Decision" of the China Securities Regulatory Commission due to failure to timely disclose major changes in external conditions of production and operation. The CSRC gave the company a warning and imposed a fine of 700,000 yuan, while the responsible persons of the company were warned and fined a total of 2.05 million yuan.